No B.S. Guide to Maximum Referrals and Customer Retention. Dan S. Kennedy

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       The 5% Solution

      by Shaun Buck

      This chapter is about how big an impact a small number can have.

      Business owners tend to focus on growth in gross revenue terms. That’s how the pack thinks. For that reason, small numbers don’t interest or motivate them. There’s a lot of passion for THE Big Idea that will produce BIG Growth, preferably overnight. This is the same sort of pack thinking that keeps hordes of overweight people trying one new pill or one new “trick” diet after another after another after another, in place of organizing a sensible eating plan and a basic exercise regimen and sticking to it.

      Of course, there’s nothing wrong with a single, big, epic, magically transformative breakthrough, if you can find or invent one. But most success and wealth in business, especially in established businesses, doesn’t happen that way. Profit growth tends to come from small things combined or multiplied. What McDonalds’ founder Ray Kroc called “grinding it out.”

      Here, I’m going to demonstrate how an apparently small number—5%—can have a big impact.

      My first customer ever at The Newsletter Pro is still with me today. I want to use him as a case study. He is a dentist in a suburb of Boise, Idaho. Don’t allow his profession or location to send you down the path of thinking “my business is different” and this case study doesn’t apply to you. That’s how broke business owners think. Those specifics do not matter. What I want you to focus on are the numbers.

      Dr. Taylor opened his practice two years before he and I met. His practice was located in the southern section of a small but very affluent part of town. Less than a mile away was West Boise, and directly across from his office was the northernmost town of Meridian, Idaho, one of the fastest-growing cities in America. To say his location was prime real estate for the area is a bit of an understatement.

      Dr. Taylor’s office building was massive. It had room for at least a dozen operatories where they could clean patients’ teeth and provide other services. Only six operatories had been equipped at the time; three were ones Dr. Taylor rented to another dentist whose primary location was on the opposite side of the county. In other words, he had enormous unused capacity. Or less optimistically said, he had a vastly overbuilt facility. I’ll credit him with vision and ambition.

      When I met Dr. Taylor, it was obvious he was a highly skilled dentist with a good chairside manner and no ego, which is not always the case when you are dealing with doctors of any kind. His practice was very small personnel-wise. At the time, he was employing one full-time front desk person and one part-time hygienist. He was his own assistant, and when the hygienist was not at the practice, Dr. Taylor did all the hygiene work himself.

      As I previously mentioned, Dr. Taylor had a good location and wanted to grow, so we started working with him and put two campaigns into place simultaneously. The first was a multistep direct-mail campaign designed to get new patients in the front door. The second was a monthly print newsletter meant to decrease the number of patients Dr. Taylor was losing annually as well as to increase referrals. Regarding the first campaign, hey, more new patients were needed and would be exciting. But I knew that there was more opportunity than met the eye from growth by retention and referrals, rather than by costlier and more difficult new patient marketing to strangers. This is the opposite way from the pack. Most people assume they’ll keep customers just by providing good products and services, and get their share of referrals automatically, so they hunt for new customers in the wild.

       RESOURCE

       If you want to check to get examples of the multistep direct-mail campaigns and newsletters used by Dr. Taylor, just head to www.nobsreferralbook.com. This is a free website I have set up to provide you with additional free resources.

      At the time, Dr. Taylor was losing about 17% of his patients per year. That number is very average. Most businesses we work with, prior to starting with us, tend lose between 15% and 33% of their customers annually. For Dr. Taylor, our goal was to simply decrease his 17% loss to 12%. In a professional practice, 12% is about as low as you can get because regardless of how great your service or how strong your relationship with patients, people still move away and still die.

      Considering how small Dr. Taylor’s practice was at first, it may surprise you that he invested any money in patient retention at all. To be honest, many less sophisticated dentists skip patient retention and end up dumping 100% of their marketing money into new patients, but Dr. Taylor knew that his current patients were the ones keeping the lights on and were the ones feeding his kids. They were the lifeblood of his business and were therefore not to be treated as second priority.

      So, we began with the 17% fact—we developed the 5% solution (see Figure СКАЧАТЬ