Using information to boost your business (Part 1)
Thinking time in any business is often regarded as a luxury rather than a necessity as more often than not we find ourselves engaged in fire fighting or just doing the day job. The reality is that if we were able to extract ourselves from the coalface from time to time, we might be able to assess our businesses objectively and make tweaks and/or changes as necessary.
The information needed for this assessment is held within; you just have to ask yourself the right questions.
The difficulty in private medical practices is that often the person or people providing services to patients are the same people who need to take time out to review how the business is performing and so in many cases it simply doesn’t happen due to time constraints.
All businesses, whether they have been operating successfully or have just been newly formed, need to have a clear understanding of where they are and where they would like to be.
This strategic review is of course made up of a whole range of measurements such as:
- Turnover
- Costs
- Profits
- Geographical reach
- Numbers and profile of your customers
- Service offerings
- Suppliers and other KPIs (Key Performance Indicators)
If you have set key objectives and targets, then you will be able to tell whether you are doing better or worse than you might have expected against these targets.
There are a number of key areas that one needs to look at. The ease with which you will be able to review these will depend upon the availability of the information in the first place. Your practice management system(s) should be able to output some useful information based on standard reports and the rest you will have in your head.
The following diagram illustrates a process which starts with a business analysis phase gathering key pieces of information to enable a marketing strategy and tactical plan to be developed. The tactical marketing activity has been omitted for now.
The following headings represent the key areas which should be reviewed:
Customer/patient profile
Do you know what the profile of your previous patients looks like?
- What is the male/female split?
- What percentage fits into which age bands?
- Where have they come from (geographical location)?
- What occupation did they have?
- What percentage was self-pay versus PMI (private medical insurance)?
- Which insurance company has supported their claim?
- Do you know anything else about them?
- Are there any obvious trends emerging?
Knowing your previous patients will provide extremely valuable information. This will allow you to target others who might become patients of the future.
This analysis becomes even more valuable if you have a number of different practitioners coming together to form a group as they will all have a different spectrum of patients that have been diagnosed and treated in the past.
Consultations, Procedures and Revenues
- Do you know the split between consultations and procedures in terms of time and associated fee income for both individuals and the group as a whole?
- Do you have a good understanding of the mix of procedures across all members of the group and associated fee income?
- Do you measure the numbers of ancillary services that are generated by the group as a whole?
This type of information is useful not just to see where your revenue is coming from but by associating related costs you can determine the most profitable sources of business which in turn should influence how you target prospective new business in future.
The referrers
An understanding of who has referred business to you in the past and where they are located is very important as it is likely that these referrers will continue to refer patients to you in the future, assuming you have looked after them well and communicated well. Combining the referral bases of a number of consultants provides an opportunity for cross-fertilisation, especially if the group is made up of a number of consultants with different specialisms. Mapping the geographical location of these referrers will show where the gaps in coverage are across a geographical area. Performing a gap analysis to identify those GP practices with which none of the group has had any previous relationship will open up potential new referrer business.
The Market
Understanding the market for your particular product or service offering is critical.
- Do you know the size of the market locally, regionally, nationally and/or internationally?
- What potential reach do you have to address the opportunity?
- Is the market growing or declining?
- Are there trends/experiences elsewhere, for example in the US, which one could apply to the UK market in terms of potential growth trends?
- What are the key factors/dynamics which can influence market conditions and how can one mitigate against them?
Being able to answer all of these questions should provide clarity and enable the group to position itself accordingly in terms of the market share you would like to achieve in the short, medium and longer term.
Competitor analysis
Understanding your competitor’s strengths and weaknesses is just as important as understanding your own. One needs to review existing competitors as well as possible new market entrants. Getting “first to market advantage” is important as everyone else will then need to play catch-up and it is often hard to close the gap especially if the market leader continues to grow and evolve.
SWOT and USPs
Once you have a good understanding of the patients, the consultants, the referrers, the market and your competitors, you can conduct a simple SWOT analysis for the group. This allows you to identify the Strengths, Weaknesses, Opportunities and Threats for the group.
This provides focus and helps with strategic development. It will allow you to identify what it is that makes you unique or better than your competitors. It will allow you to identify your USPs (unique selling points). These should be highlighted in any marketing or promotional material.
Strategic Objectives
It is very important that members of the group agree on key strategic objectives as these will set the direction for the business. These will be high level objectives but will be measureable. The tactical marketing activity which will allow you to realise these objectives over time will be discussed next month.
We are in the midst of an information revolution. Those businesses which utilise technology to manage information and communications will gain competitive advantage over those who continue to operate as they have always done.
The world in changing and it will be those who embrace the changes first who will win.
Posted on Thursday, 16 April 2009 under Medical