Improving Efficiency to Increase Profitability
One of the most important lessons that came out of the COVID pandemic, which caused reduced patient capacity and appointment times for most practices, is that aesthetic medicine practices MUST:
- Pay attention to and use their numbers to make informed decisions
- Maximize their revenue potential per room, provider and procedure
- Nurture their existing clients
- Have a trained team, especially the front desk to better qualify and convert patient leads
Believe it or not, less than10% of aesthetic practices actually measure their data. If you can’t measure it, you can’t manage it. Even if you are currently measuring your data, if you don’t know how to translate that raw data into actionable insights, it doesn’t really help you to grow.
Knowledge doesn’t always equate to power. Knowledge means you have the information. Taking action is where the REAL power comes in to take you from where you are now to where you want to be.
Translating EMR/PM Software into Actionable Key Performance Indicators (KPIs)
Your EMR/Practice Management software is capturing tons of raw data. However, if you are like most practices my team has worked with over the years, you are likely unsure what exactly to do with it.
Understanding which metrics to measure and why, as well as knowing which reports to run and what to do with the information once you have it, is the key to exponential practice growth.
The two most critical KPIs that every plastic aesthetics practice needs to be monitoring are:
- Profit Per Treatment (Gross profit = Revenue – Cost of Labor – Cost of Goods). **This number needs to be 50% or higher, what is yours?
- Revenue Per Hour (For the overall practice, individual provider, and by procedure/service category – used to build forecasts, set goals and create a performance-based bonus).
Industry benchmarking data shows a medical spa practice should generate approximately $600 – $1000 per hour and a surgical practice $3000 per hour. If your revenue per hour is not in alignment, it’s likely because your prices are too low, the provider is taking too much time in the room per treatment/surgery, or you are not offering the right mix of the most profitable treatments.
Our new APX by Terri Ross platform includes Profit Per Treatment, Revenue Per Hour and 5 additional financial optimization calculators that really simplify these calculations for you.
Being Busy Vs. Being Profitable
Being busy and being profitable ARE NOT always the same thing. I can’t tell you how many times clients have asked me, “Why am I so busy, but not generating the revenue I’d like to be making?” They tend to think the answer is increasing their profit margin, performing more procedures, adding more treatments/services or increasing their hours. However, that’s not always the case and can often lead to perpetuating operational inefficiencies.
Imagine if you knew your Profit Per Treatment and Revenue Per Hour for every procedure or service and could make a few small adjustments in your offerings based on informed decisions that could yield another million dollars a year WITHOUT working additional hours…WOULD THAT BE WORTH IT TO YOU?
The Value of Long-Term Treatment Plans
Most practices focus their marketing efforts on attracting new clients in the door, but often overlook the value of patient retention strategies that capitalize on and nurture existing clients—the ones who already have the KNOW, LIKE and TRUST factor established with you. Building long-term treatment plans in the initial patient consultation can help maximize the lifetime value and revenue potential for that patient as well as help them achieve the best possible results.
Investing in Proper Training
On a scale of 1-10, how confident are you in your front desk staff being able to ask the right questions to determine if a caller is a “looker” or someone seriously ready to commit to having a procedure done? And if they are your ideal avatar client, how confident are you in your team’s ability to convert the caller into a consultation?
Now more than ever it is critical to properly vet your new client phone and web leads so you can boost your conversion rate and book consultations with those patients who are serious about booking procedures/services and willing to spend the money, so you don’t waste time on those who are not.
Investing in training your team in the areas of sales, customer service and finance is critical to scale your practice. We recently had one client who Implemented just ONE skill taught in our sales training course that resulted in a $32K surgery being booked from just one phone call.
I hope you found this blog valuable and informative. As always, my team and I are here to serve and support you and your growth. If you have any questions for us or would like to schedule a discovery call to learn more about APX by Terri Ross, please visit www.apxplatform.com.