How to get more referrals to your practice (Part 2)
This week on Marketing Monday, Angus Pryor, the founder of Dental Profit System, will continue talking about how to generate more referrals to your dental practice as part of a new series.
Transcript: How to get more referrals to your dental practice
Well hello, entredentists. Angus Pryor here, creator of the Dental Profit System, co-author of the Amazon crushing book, The Better Business Book, bringing you this week’s Marketing Monday, the weekly show designed to boost the marketing at your dental practice.
Now, at the moment we’re in a series on internal marketing. We’re looking at referrals this week. Last week we introduced the concept of referrals and why they’re so valuable. I was looking at some data. One of the things that we do with our clients is we help them capture the referral sources from every time the phone rings.
And this data here is, that’s from over a thousand phone calls. 25% of all calls coming into a dental practice is from referrals, from word of mouth. So this is really valuable in terms of bringing in new clients. It’s a big chunk. Just in case you were wondering. Signage and walk-by was a big chunk, Google ads was a big chunk, and then there’s a sort of an “other,” and then there are a few other bit players. But suffice to say, getting referrals and word of mouth and positive customer experience is invaluable.
Not only is it a big percentage of the new business that comes in, but generally speaking you’ll get more valuable clients from that. I, as a consumer, have literally said to a business once where a friend of mine was using them, and they started going into the sales pitch and I was like “No, no, no, stop, stop, stop! I’m already sold, just tell me what I need to do.” The value of these referrals is really, really valuable.
Now, the first thing I wanted to talk to you about, and just as a reminder, last week I told you about asking for referrals, which is a really simple thing to do. If you missed the show and you wanna know a good way to do it, just type in the word “script” and I’ll send you the actual script that we give to our clients to ask for referrals.
But today, we’re gonna talk about competitions. And yes, you can have referral competitions. There are two aspects to the competitions. You could actually run a competition internally and say “Let’s see if we can work together to get the referrals. And if we hit … I don’t know, let’s just pick a number. Let’s say last month we got ten referrals. If we could achieve 20 referrals this month, then I’ll take the whole team out to lunch or dinner or whatever.”
Now, that’s a really good way of getting everybody working together on getting those referrals happening. To give you an idea of the value of bringing in clients through this way, most dental practices in Australia, the value of a client, the median spend, the middle average spend, is between $500 and $1,000 a year. So if you bring in an extra ten referrals, that could be $5,000 to $10,000 in extra business coming in for you in the next twelve months. So it really is worth it.
That’s one form of competition. The other form of competition, so we’ll call this one the staff one, the team. And then the other one is actually a client one. Now before we get into client competitions, let me talk to you about AHPRA. If you’re in Australia, the Australian Health Practitioners Regulatory Agency, they have some rules around what dentists are and aren’t allowed to say. And in relation to this kind of thing, I’ve had some anecdotal evidence – I’ve not seen anything from AHPRA specifically – suggesting that AHPRA doesn’t necessarily like you running competitions for referrals. But I have two observations to make.
First is this depends a bit on your risk appetite. And I’ll explain a way you can do this without … appetite, I think it’s got two Ps. I’ll explain a way that you can run a competition without coming to the attention of AHPRA, and then you just can decide with your own appetite, whether it’s worth doing. From a marketing point of view, it’s definitely worth doing. AHPRA says, if you’re a healthcare professional, then you cannot be encouraging the inappropriate, indiscriminate use of medical services. If you’re the treasurer of Australia, that makes sense.
Now if you’re watching this in some other country, then you’ll have your own laws there. And that would be true, except for the fact that AHPRA is covering every type of medical professional in Australia: doctors, dentists, and a whole range of them; and it’s totally arguable that in some of those other professions, that saying everyone should come to the physio or whatever, well maybe that is over-servicing; maybe that’s unnecessary. But I would argue philosophically that for dentists, every single Australian needs to go to the dentist. We’ve all got teeth. So that’s why I’m comfortable with this one philosophically, but again it does depend on your risk appetite.
The second thing is if you’re gonna run this competition, my suggestion to you is don’t be sticking it on your website. This is an in-house, internal thing when people come into the office, they hear about your referral competition, and that’s the end of the matter.
So that’s a little bit of a preamble. How do they work? Basically what you do is, you get something like a fish bowl. I like having little referral cards, where it says “Referred by” with a name. And then the new person’s name. You can get those printed up.
And basically, if you go through the script from last week, if you’re like “Hey, cheers, coming up …” “Hey Angus, how was everything today?” “Fine, thanks.” “Well that’s great, ’cause we really love helping the local community. Have you got friends and family that could benefit from the services we’re offering?” “Probably.” “That’s great, because we really love thanking our clients when they refer new clients to us.
We’ve got some little cards made up, and there’s a spot for your name there. If you give these to friends and family, then we wanna be able to thank you when you refer anyone. How does that sound?” “Yeah, no problem.” “And as a bonus, if I might, we’re also running a competition. For every entry that comes in from other people, that goes into the drawer, and we’re giving away a blah blah blah.”
Now, firstly, in terms of giving stuff away, don’t be giving dental things away. I just find it a bit too self-serving. Give away gold-class movie tickets. Give away an iPad or whatever. Remember the value here. An extra ten referrals could be worth $5,000 to your business in the next year. So something for a hundred bucks or a couple hundred, whatever.
A client of mine did this, and they gave away an Apple laptop, which I guess is maybe $1500. And they ran it over three months. And that promotion for that practice generated a hundred new referrals. Now I know for that practice, their average client value was $650. On average, every person who walks in the door is gonna spend $650 within the next twelve months. I don’t know, a hundred times 650, that sounds like $65,000 worth of business. So for me, that was a really great deal.
Basically, in addition to your fishbowl, get some cards printed up. I think I’ve got one of these little Perspex counter card thingies, get a shade of whatever printed up in there. Oops. “Refer and win,” some kind of message like that. And then the other thing that works pretty well, running out of space here, is a whiteboard where you can say our … what are we gonna call it?
I think I’ve got some text for this, but it’s basically, you could just say “Refer and win” there, too. And then the other part that I like doing is on that whiteboard, you can have “Mary referred Jenny,” and “Tom referred Sally,” and so on and so on, because it’s great social proof to say this is a practice that’s worth referring to.
So, that’s a lot, but let’s summarize. It’s definitely worth doing referrals. I think the data’s irrefutable. A thousand plus calls, and referrals were the highest source of new patients. I think everybody gets that. They’re high value. You don’t need too many of them for them to be sticking quite a bit of money through your business. In terms of AHPRA, it depends a little bit on your risk appetite. I’ve heard anecdotally that they don’t particularly like referral competitions, but I think there’s a way you can run it where it doesn’t come to their attention.
And my personal view is that these do not break the spirit of the legislation. In fact, there’s nothing specifically in the policy that says you can’t do these. The policy says you can’t be encouraging undue use of medical services, and as I say, this is a document that covers a whole range of healthcare professionals. Dentists, everyone’s got teeth. If you’re running this thing, come for dentists and get a checkup, my personal view is that’s not in contravention. But be that as it may, don’t stick it on your website.
Get some cards printed up, promote it internally. Ask for the referrals. Stick the entries in a fishbowl. Give away something cool, and maybe every two or three months, draw, and absolutely you wanna sing it from the rooftops. Get a photo, stick it on your whiteboard, you know, someone being handed whatever and there you go. That’s a great system.
Look, I should give a little shout out to Mark Costas in the US, this is in his book. I’ve taken a little bit further, but it’s a concept that he uses. He’s a man with ten practices; draw your own conclusions.
Otherwise, for me, Angus Pryor, signing off. See you next time on Marketing Monday.