Building a Sustainable Private Practice

This course is an edited transcript of an AudiologyOnline webinar - a course handout is available - download the color version here or download the black and white version here.

Learning Outcomes

As a result of this course, participants will be able to:

• Identify key ways of developing organic & renewable sources of new patients.
• Identify some of the important tools in being operationally efficient.
• Consider ways to invoke their own passions within their practice to take their business performance to the next level.

Introduction

Chelsea Treseder:  Welcome to today’s course, Building a Sustainable Private Practice.  

I have spent most of my life in the hearing industry. My parents have run a private practice here in Northern California since before I was born, and I have worked in a number of different capacities within the industry. I was part of the small team that launched Lyric at InSound Medical, and after we were bought by Sonova, I worked in national accounts at Phonak. More recently, I have done work with Caber Hill Advisors to help audiologists and hearing aid dispensers buy and sell practices, as well as have consulted for a number of other companies in the industry. I am also the Vice President of Business Development for Pivot Hearing, a practice development group focused on helping business owners grow their practices sustainably. I have a bachelor’s degree in speech pathology and audiology from California State University Chico and an MBA from Kenan Flagler Business School at the University of North Carolina at Chapel Hill. I’m joined today by Bill Diles, who happens to be my dad. Bill and I work together on the Pivot Hearing business, but he’s spent most of his life running a large private audiology practice.

Bill Diles: Thanks Chelsea, and welcome to everyone attending this course. Yes, we have such a rich family history in this industry. I had to call my mom the other day to get the exact dates - we actually go back 82 years in the hearing aid industry. My grandfather was a hearing aid dispenser starting in 1934 in Billings, Montana. He eventually became Vice President of Sonotone. My father was a hearing aid dispenser with a great practice in Athens, Ohio.

Things almost didn't turn out this way - I remember a story about a time in 1961 when he was discouraged about his business and actually was looking to buy a dumpy motel in Athens. That sure would have changed our family’s direction. Some of the best decisions you ever make are the decisions you never make.

My wife Christine is an audiologist; we met at Ohio University in Athens. All three of our children are involved in the family business, so the legacy lives on. We purchased Kenwood Hearing Centers from a hearing aid dispenser in 1981. We’ve grown to four locations and are about to launch our fifth office. Things are going well.

Kenwood Hearing Centers 

I'm going to share the story of our business, Kenwood Hearing Centers.  I’ve never shared the story before, and I hope it encourages anyone who’s struggling with their practice. The industry has changed so much in the last few years and it seems there are lots of wolves at the door today.

Chelsea: I think the content we have to share is very timely and relevant - in fact, I got an email yesterday about the upcoming 2016 Academy of Doctor's of Audiology (ADA) convention. The whole theme of that conference is "building the audiology practice of the future", which is exactly what we are going to talk about here today.

Bill: The future of private practice is bright, in my opinion. We’ve never had such great hearing aid technology, and we’ve never had so many tools that allow us to run our businesses efficiently so we can focus on the most important thing - patient care.

There’s so much fear going around these days. I talk to so many professionals who are worried about big box stores, Internet sales, manufacturer-owned clinics, third parties and even the Veteran's Administration. And then I talk to other practice owners who say business has never been better. So what’s going on? We’re going to look at 3 case studies in this course to try to understand that very problem.

Chelsea: Bill, as you mentioned, your business is booming now, but things weren’t always so rosy.  I think that’s a great place to start - right at home, by telling your own story.

Our Situation in 2011

Bill:  To start things off, let’s take a look back. Figure 1 shows the sales data of Kenwood Hearing Centers from 1997-2011. 

Figure 1.  Kenwood Hearing Centers, revenue by quarter, 1997 - 2001.

What was driving business at that time? Technology. We experienced steady growth, and it was the introduction of new products that caused the big spikes in 2002, 2004, and 2007, for example. A new product would be introduced, and we could mail our database, run some ads, and that would drive sales.  There was nothing to it.

I figured we could just keep riding the technology wave. In those days, honestly, you didn’t have to be very good business person to survive and even thrive. I’m proof of that, as I was pretty much a business knucklehead.

Around 2009, things started to change, and not for the better. Suddenly, it was becoming more difficult to upgrade our users into better technology, as they were already wearing pretty good hearing aids. The 2007 product release was nothing short of amazing. The next new product, at least in our clinics, was not different enough for our patients to warrant the expense of new hearing aids.

I understand that we can’t count on manufacturers to drive our business. They have their own challenges. When they release a great product, the burden’s on them to step it up another level with another great hearing aid.

As you can see from Figure 1, sales were declining. We have to keep in mind that this was also around the beginning of the housing crisis and many businesses were struggling. The stock market was tumbling, and the economy was in trouble. Regardless, our sales were falling, and all I could do was watch as our overhead kept rolling along at its normal clip. Overhead is kind of like a tsunami; it is relentless.

Do you know the feeling when you’re business isn’t doing well? You don’t know what to do so you kind of go into denial. At least that’s what I did. A couple years of denial and as you can see from the graph, business continued to suffer.

I want to mention that during this 14 year period, we were pretty much focused on using only one manufacturer, and that’s not the best idea. As good as that manufacturer was and still is today, I’ll never put all my eggs in one basket again. One issue for us was the new hearing aids from that manufacturer did not have t-coils.  We had spent the last 15 years installing literally thousands of hearing loops in homes and public venues. We needed t-coils in the hearing aids.

Chelsea: So, working with one hearing aid manufacturer became a problem for you when that manufacturer decided to take the t-coil out of their hearing aids. I wanted to point out that that type of situation is not something unique to the hearing industry.  Relying on just one supplier or partner brings a lot of risk to your business in any industry. What if that company has a recall, or a lawsuit? What if they get bought out? Or if leadership changes? There are so many things that can happen - blatantly negative issues can arise, or subtler issues like the t-coil example. It is just good practice to have secondary suppliers and always be on the lookout for new potential partners to add to your fold.

Bill:  Great point. Not only that, but consumers today, and Baby Boomers specifically, appreciate having options when making major purchases.  Consumers are doing a lot of research online.  We’re happy to be independent and able to fit most any hearing aid on the market.

Chelsea: So relying on one manufacturer was a problem. Was there anything else that you think contributed to the decline in sales?

Bill: Yes. This was about the time that traditional marketing was becoming less effective. Remember the days when business would slow down and all you had to do was run a four page insert and get 30 new patients?  That is not the case today, as we all know. Looking back, I think we were all pretty spoiled for decades.

So by 2011, we knew we had to make some major changes. I have a patient who’s become a good friend. He owns six casinos and has 5300 employees. His advice, "If you run your business today like you did yesterday, you probably won’t be around tomorrow."  We had so many weaknesses (Figure 2).

Figure 2. Areas of weakness.

Chelsea: So you mentioned that relying on a manufacturer for technology updates and that traditional marketing were both problematic, and to further exacerbate that, you were really only working with one manufacturer at the time. What else would you say was broken in the business at that time?

Bill: Our general business practices were hurting.  We had serious operational problems. We were scattered, and running lots of parallel systems. We were actually using two different practice management softwares. How crazy is that? Basically, we weren’t taking advantage of existing technologies designed to help businesses run efficiently.

While patient care was good, and of course that’s the most important thing, our systems were all over the board.

Chelsea: And that itself isn’t good for patient care. What about the financial side?

Bill: Our cost of goods was too high. Nobody was really paying attention to the details on the invoices. Little mistakes add up when you’re not on top of things. Maybe you’re being charged for an accessory that was supposed to be included, or maybe you’re being overcharged on shipping; these little things add up. And in general, we weren’t very good negotiators, so we were paying too much for hearing aids and accessories.

As business owners and clinicians it’s so easy to get caught up with patient care and at the end of the day, you’re tired and ready to go home. I don’t know about you, but patient care can be exhausting for me. But when nobody’s watching the business, key metrics can get out of way out of whack.

Chelsea: Right - and that can happen quickly if you're not on top of things.  Let’s talk about marketing next.

Bill: In terms of marketing, we were all over the map.  We actually had three businesses with three different names.  Have you ever try to build a website with three different names? I don’t recommend it.

What happened was, we bought the original business from a man by the name of Kenwood. The problem was that Kenwood is a well-known nearby town in the Sonoma Valley, the heart of wine country. Too often, people thought we were located in Kenwood, which was actually 10 miles from our office.  When we opened our second office we didn’t want to continue the confusion, so we named it Personal Hearing Solutions. Since we were on a roll with different names, we decided to name our third office California Hearing Solutions.  

So we had Kenwood Hearing Solutions, Personal Hearing Solutions and California Hearing Solutions all in one county. Like I mentioned earlier, I was a business knucklehead.

We picked up a great domain for our website, goodhearing.com, in the late 1990s. It was dumb luck. A friend of mine who owned a baseball card shop told me that he started a side business building websites.  I said, "What’s a website?" He told me it was like an advertisement for your business on the Internet. I said, "What's the Internet?"

So with all that longevity, we naturally had excellent search engine optimization (SEO), but with three different business names, we didn’t really have a brand.

As I mentioned, newspaper ads weren’t producing like they used to, but I’m sure the three names were not helping. If a manufacturer rep came by and offered a co-op, maybe we’d run some ads.  We had no real marketing plan. We were reactionary for sure.

Adding to our foolishness was the fact that we were doing nothing to encourage physician referrals. In 2011, we had only four doctors referring to us with any regularity and two of those were patients.  I incorrectly assumed my competition had the referrals locked up in the area and I had no idea how to make inroads.

Chelsea: I think that’s pretty common - audiologists know it’s important and they should be doing physician outreach, but they don’t know where to start. And finally, tell us about your team and human resource (HR) issues.

Bill: We had some definite HR issues. I think we’ve all been there, when you have to let somebody go. It’s probably the most difficult task of a business owner - at least it was for me. In these small businesses, we develop personal relationships with employees.

It’s really tough when a long time loyal employee becomes a problem and stands in the way of progress. Have you ever experienced the mutiny when the staff is asked to change to a new practice management software? We had a bookkeeper who saw automation as a threat to her job, and she was right. She was a dear, sweet person but this was a problem.

When you’ve got a problem employee, you know you need to let the person go, but month after month goes by and you just can’t make yourself do it. It’s too personal.

I just want to see patients - I don’t want to be firing people. That’s not what I signed up for when I opened up an audiology practice. But actually, it is what I signed up for. My friend with the casinos says, “There’s no comfort zone in business.” He also says, “If owning a business were easy, everybody would have one.”

Chelsea: And this situation was coupled with your inefficiencies, so I would imagine you were spending too much on payroll.

Bill: Absolutely, and this was trouble for sure. We needed more productivity from each employee.

Chelsea:  That too isn’t something that’s easy to identify and change, certainly not quickly.  So it sounds like quite a few things were broken in the business. I can imagine that felt daunting. Let's talk about how you started tackling all these issues.

Path to Sustainability

Bill: First, we expanded our product portfolio and found there were some great features in other hearing aids that we had been missing out on.  It’s so tempting to stay in our comfort zone and keep using the same hearing aids, especially with new patients. We want to feel confident in the moment and not be fumbling with new software. In the back of our minds we may wonder if there’s a better hearing aid for this person, but we stay safe in our little box.

I’m so glad we’re offering more choices to the consumer and we’re better able to answer questions. Like I mentioned, Baby Boomers are researching online.

There was another positive outcome that came from expanding our product offerings.  Our staff seemed to get energized by learning new things and fitting new technology. The patient can feel the excitement. They want to hear about what’s new. They count on us to stay updated on all the latest technology and products on the market.

Our operational turnaround started when our talented son joined the family business in 2011.  Will had been working for Gymboree Corporation, the children’s clothing retailer based in San Francisco. He is an analyst and had become really skilled at looking at data. With 600 stores, Gymboree obviously had a lot of data. Coming from that background, Will had no problem analyzing  data from three hearing aid offices. It was a piece of cake. Early on, he made a statement. He said, "From now on, we’re making data-driven decisions. Everything by the numbers."

We decided to go with Sycle practice management software for all of our locations and that’s when things really started coming together. I remember the date - it was January 17, 2011. We drew a line and said, "Here is where we start." I know there are other web-based practice management solutions available, but Sycle is the biggest and the one we use, so that’s what I’m going to refer to today. With Sycle, we could start capturing more key data. For example, with Sycle, you can’t even enter a new patient without a referral source. This obviously makes tracking easier. And being web based, we now had better visibility over the offices. We started integrating Sycle features such as QuickBooks integration, which eliminated double entry on the bookkeeping side, Edocs which meant no more looking around for patient charts, and insurance billing which made the process more seamless. Finally, with the addition of PC-based audiometers, we became paperless in all locations.

Another key move we made was to hire an accountant who specializes in hearing care practices, Jeremy Kiecker. Jeremy’s located in Minneapolis but because we use cloud-based systems, he’s able to provide oversight. Jeremy knows industry averages and norms, and he’s well acquainted with the technology of audiology practice management systems and how they integrate with QuickBooks. It’s great for a busy practice owner to not have to worry about the books. We get monthly recaps that keep everything in line.  We give clean books to our tax accountant at the end of the year. This makes our tax planning much less expensive. And all the year long, we have a solid handle on the financial picture.

The bottom line here is that we’ve moved every possible process into the cloud, including credit card processing, online bill paying, payroll, accounting oversight, Sycle Noah sync, electronic record keeping and Sycle itself.  Our bookkeeper only works three days a week doing all the work for four offices, soon to be five. 

I love all this technology and the fact that I don’t have to store any data.  I’d rather leave it to the pros.

Chelsea: It is amazing what you can do when you fully embrace Sycle and its integrated products and features. What sort of changes did you make on the marketing side?

Bill: We finally decided to have one business name.  That decision enabled us to start building a brand. With one name we were then able to build a good website, and our print media became much more effective.

We made another key decision to no longer promote products. From that point on, we decided that everything we do would promote us, Kenwood Hearing Centers.  It was so liberating. We had to ask ourselves how to go about promoting us instead of a product -  what made us different?

Over the years, when the patient would ask, “What hearing aid is right for me?” I’d be honest and say, “I don’t really know. I just met you. And actually, nobody can tell you. If we work together for the next 3-to 4 weeks, we’ll find the answer”. This is a major purchase and should not be rushed. We became very accommodating, letting patients wear hearing aids without making a financial commitment. We found that by doing this, we earned their trust. We were showing the patients that we trust them first.  They were so pleasantly surprised, it became our standard method of approaching the new patient. I’m not in a hurry to make a sale, I’m more interested in building a relationship. The hearing aid sale will follow.

Doing same day fitting takes lots of inventory and demo units. This can be an expensive way to operate, but in the long run, you build trust with patients. And patients tell other potential patients.

When Unitron came out with the Flex concept, it fit perfectly into our model. The Flex:trial device can be programmed to any of five technology levels. The patient can take his time trying different devices and we don’t have the pressure of an aging invoice. We have lots of demos from other manufacturers as well.  We’ll work with the patient until we’ve found the best make and model.

So, the question was—how could we promote this unique process that we were already offering on a daily basis? We knew patients loved this concept, but how could we message this to potential users whom we’ve not met? We engaged a creative agency and brainstormed about how to message this concept. We developed five ads and they’ve been very effective. Again, these ads are about a process rather than a product, as you can see in the example in Figure 3. 

Figure 3. Ad that productizes and promotes the process, rather than the product.

We’ve been running these in our newspaper for the past two years. As far as frequency goes, we run ¼ page 12 times a month. Here’s what’s interesting—25% of the calls we get come on days the ad is not running. This tells me people like our message and call when they are ready. With no special dates or prices, they just get the message and make a mental note. This is how we build our brand.

Letting people know they’re in control and can test drive different hearing aids is a much better message than, “It could be earwax", or "We're looking for 30 people to try this $749 hearing aid, four days only.”  The "Test Drive ads" have been great and we have five new ads we will start testing next week. Now we have consistency with our Test Drive brand and we feature it on the homepage of our website. We are the place of choice. It’s not about this or that hearing aid, it’s about the idea—Kenwood Hearing Center is going to find the right hearing aid for you.

We also started a robust physician referral marketing program, which I'll discuss in a bit.  So yes, Chelsea, upgrading our marketing was part of the key to building sustainability (Figure 4).

Figure 4. The path to sustainability for Kenwood Hearing Centers.

In addition, I’ve always felt some of our best work is done outside the walls of our office. We differentiate ourselves in the market by installing loops in our patients’ homes, in their churches, and in local movie theaters.

There’s a nice, locally owned movie theater in town; their target market is age 55+.  They don’t show the Hollywood blockbusters, they feature smaller, independent and foreign films. I knew the owner’s name, and when he came into my office for hearing aids I showed him the loop with the TV, like I do with all our patients. He was amazed. I told him that we could put a loop in his home, and he said, "Can you put one in my movie theater?"

I told him that I would try, but that a multiplex theatre would be challenging because of spillover. Spillover refers to how sound can spill outside of the loop, which would be a problem with another movie playing next door. The next day he showed up with a key for me. We spent the next 3 ½ months crawling around on the movie theater floors, working from 6-9 AM on the loop and then heading off to our jobs.

We figured it out, and to my knowledge Summerfield Cinemas was the first looped multiplex in the US. It has five auditoriums and 700 seats. They show a 30-second promo before each film for Kenwood Hearing Centers.  That's 25 times a day, 365 days a year, and is great public relations for us.

Chelsea: This seems like the best marketing you could ever ask for; you have a commercial playing in front of hundreds of people a day.  They are your perfect target audience, and not only are you putting your logo on the screen and telling them something, but you actually made their entertainment experience better.  It would be hard to put a price on that, and you are not even paying for it.

Bill: Yes, it’s one of my favorite things that we have done.  I like that we have gone in and actually changed the environment rather than just beat our chest and promoted, “Hey, we're the best place in town.”  We send our new patients over to Summerfield Cinema during their trial period and say “Flip it over to program two when you're in there” and wow, they notice a big difference.  They don't have to go get headsets that they don't know how many people have worn, may be dirty, may not be charged, etc.  With a loop, they can just sit there and flip the T-coil and hear better - it is a beautiful thing.  I have always been passionate about looping.

We do other things out in the community, like house calls, and speaking at Rotary meetings. Last month, we sponsored a world class Bluegrass band at a local venue. We had a great turnout.  We also started a Hospice program four years ago that has been very rewarding. If anyone's interested in starting a hospice program in their area, let me know and I’ll help you get started.

And let me reassure you here, big box and other corporate owned stores and not going to do this kind of outreach in the community.  This is our place to shine. I like to say that I found the silver bullet to private practice, and it's called hard work.  And as long as we’re out at five o’clock, it's all good. 

Chelsea: You honed in on your brand, took your digital presence to the top tier, and productized and started promoting a process instead of products.  You also looked outside your walls and developed some really unique and effective community marketing tactics. How did you address the HR problem?

Bill: Well, we did the hard things and let some people go. It was no fun but we did our best with severance packages and in each case, the employee had kind of seen it coming. On the plus side, it was great hiring new employees, now that we had new systems and a better idea of what we were looking for.

Also—we assigned tasks to several team members so they have multiple roles. For example, Adam is a dispenser and he handles all marketing. Will is a dispenser and also serves as the director of operations. By having key people performing in multiple roles, we’re able to save money by not having a “Business manager” per se.  We currently have no staffing issues and everyone seems happy.

Chelsea: I want to comment on the dual role concept.  Not only is the dual role concept good for your business because you reduce nonrevenue producing overhead costs, but it is also good for your employees. Your employees are both active audiologists and dispensers, who diagnose hearing loss and fit hearing aids, and they can also add to their resume that they're an expert in developing a website and running an SEO program, for example.  Those added skills are good for the individual employee and for their career path as well.  

Bill: Last week, your mom said to me, “You don’t have to worry about happy patients - if you have happy employees, you’ll have happy patients.” So true.

Chelsea: I love that saying.  It sounds like you made a lot of changes in a fairly short amount of time. So I guess the real question is – did it work? You mentioned that you believe happy employees mean happy patients, so that should mean more people keep their hearing aids and tell their friends. Let's look at your results, starting with top line revenue.

Results

Chelsea: If you look at top line revenue (Figure 5), the numbers show you’re growing about 15% a year, which is impressive since the market is growing 4% a year.  

Figure 5. Results - revenue.

That means that you’re not simply benefiting from the aging of the baby boomers – you’re actually getting more than your fair share, as a result of all the things you’re doing in your practice. And you’re helping more people. It’s funny – it seems like there isn’t any one thing that caused all this, it’s really the sum of all the little parts.

Most people believe that if you can keep a steady stream of new patients coming through your doors, business success will mostly follow. While there’s more to it than that, I see the number of new patients is way up, and a big part of that is coming from physician referrals. I know you will get into physician marketing shortly, but do you have any comments on intakes?

Bill: Yes, intakes are way up (Figure 6). I want to make a point here. It’s kind of a double edged sword. If you start a successful physician referral program, you’re going to be seeing a lot more patients. And a lot of those patients will not be needing hearing aids. This comes with the territory. I don’t mind because we are expanding our influence in the community.

Figure 6. Results - patient intakes.

But again, this is where efficiencies come into play. When your systems are automated, you can take on a bigger patient load and have a bigger footprint in your market. You just want to be sure nobody’s stuck in the office writing reports until 8:00 pm. I always say, “Let’s see as many patients as we can, as long as we’re all out by 5:00 pm."

Chelsea: So you’re driving way more patients in the door, that’s clear – does that account for all of the increase in revenue?

Bill: This is interesting because not only has our business grown; our average selling price (ASP) has increased as well (Figure 7). This was not a goal, as I’m happy fitting any level of technology, I just want to have a successful fitting.  This is just the way the numbers turned out.

Figure 7. Results - ASP.

I believe the increase in ASP is a result of our process that allows patients to self-select the level of technology. If the patient has the opportunity to listen to higher-end technology, they’ll often make that choice. 

Chelsea: So you have more patients, and you're selling more hearing aids at higher technology levels. That all sounds great. But what matters at the end of the day is the bottom line. As we can see in Figure 8, you’re keeping costs in check, your gross margin is excellent, and things are heading up and to the right - where you want them to be.

Figure 8.  Results - profit.

Bill: When profits are up, a lot of good things happen. Patients never feel pressure, employees are making more money, and you have margin to do charitable work in the community. Maybe more time to install a loop for a church or to start a hospice program?

As you do these things in the community, it feels good and you create even more awareness of your brand. Success breeds success.

Pivot Hearing - Case Studies

Chelsea: What an amazing story, and you certainly have the results to show for it. So really, the Kenwood Hearing Center story is the genesis for our work at Pivot Hearing. After the incredible turnaround at Kenwood, we started wondering  - could we help other practice owners do the same thing? We are all facing an increasingly challenging marketplace, we have tackled these competitive forces head-on, and our business is bigger and more profitable than ever. We find that we always come back to this idea of “sustainability,” which to us means becoming leaner and smarter every day. We are actually in private practice – in the trenches, day in and day out, just like you are. We spend time both in our offices, as well as outside of them, constantly coming up with ways to do things differently and better. We know our tools work because we test them. And so we have gone out and worked with other practice owners to help them overcome their unique challenges, and we want to share a couple of those examples with you as well today.

Case Study - Practice 1

Chelsea: I remember when you met the owner of this practice, Janiece Dickeson, just a little over a year ago now. You were excited and saw a lot of potential there. Can you give us a little background on her business?

Bill: Janiece was introduced to me by a manufacturer sales rep. He saw that she needed help and he’d heard about what we’d done with our practice. We all wondered—maybe we could help her?

Janiece is a hearing instrument specialist who had been in business for five years in Tucson. She loves fitting hearing aids and helping people but was never able to really get her business off the ground.  Once, she tried hiring a business manager from out of our industry. Of course, that didn't work out as we work in such a unique industry. Outsiders really have trouble figuring things out. 

Janiece told me told me she was discouraged and was thinking about just closing her doors. I saw her potential. She’s a great person, her patients love her, and she has a nice location just off a major boulevard. She actually owns her building. It is a cute little adobe house that has been transformed into her hearing aid practice and she has a little bedroom and bath in the back. 

She told me she struggles with “selling hearing aids.” I thought— wow, she’s perfect for the patient-centered process we’ve developed. I told her, Janiece, you don’t have to sell, let the hearing aids sell themselves. She decided to give her business one more shot. There was a ton of work to do but we were both willing to do it.

Chelsea: That shows you how serious things were if she was thinking of shutting the doors. This sounds like the beginning of quite a story. Let’s start with her practice brand - her business was named Hearing Solutions, a name that many of us may have heard before.

Bill: Right.  I thought we should make the business like a boutique - a special place for people to come. I said, "Let’s change the name." Many businesses have generic sort of names, but I envisioned something more unique for her.

I suggested we call it Catalina Hearing Center after the Catalinia Mountains that you could see in the distance from the practice, but we discovered there was already a Catalina ENT. She told me there was another nearby mountain range called Rincon, so after some brainstorming we combined the names and came up with "Rincalina."

Now, we needed a logo. Chelsea, do you want to tell that part of the story?

Chelsea: Sure.  For the new logo, we used 99Designs, a crowdsourcing graphic design site. We worked with Janiece to develop a brief for her new logo, and we posted it to the site; it’s a really fun and exciting process. Within a few hours, you start to get designs from a handful of designers, and within 3-4 days, we had over 100 designs from 70 designers from all over the world. We worked closely with the designers to hone in on the design you see in Figure 9, and we are really happy with it. The whole thing cost $299.  It’s such a huge improvement from the generic logo Janiece had before; this one really showcases her brand personality. Once we had the logo, we were able to move on to the next step, which was building her new website.

Figure 9. Practice re-branding and re-naming included a new logo: original logo ("Hearing Solutions") left; new logo ("Rincalina Hearing Center") right.

Bill: With her new brand, we were able to build her a great website. We modernized it. I think a website is the single most important place to spend your marketing dollars.

She is doing great - 46 of her last 69 patients have come directly from her website. She’s moving up with her search engine optimization (SEO) and is now found on page 1 of the results for the Google search term “hearing aids in Tucson.” Page 1 is where you want to be when people type those keywords.

Chelsea: Those are incredible results, considering that we’ve only been working on her SEO for a few months, and she’s already on page 1 in a pretty competitive hearing aid market. This is a great example of sustainability - her website is going to be a very cost effective way for her to acquire new patients for a long time to come.

Since we’re talking about growing and scaling her business, let’s talk about staffing. Janiece was a sole owner-operator prior to us getting involved. She was actually having calls to the office forwarded to her cell phone, and it would ring while she was in the fitting room with patients. We knew she needed to hire someone. We reached out to the audiology program at University of Arizona, and we posted an ad both in the hallway of the department as well as on their online bulletin board. We had about 10 applicants within a week, we interviewed four of them via Skype, we sent two in to meet Janiece, and she chose Sarah. Sarah has been an amazing addition to the team at Rincalina – she’s graduating this spring and hopes to stay and get her AuD at the university, so she can continue on working with the practice during graduate school. Not only does Sarah answer the phones and greet patients, but she has also been critical in helping with Janiece’s office systems. Bill, do you want to discuss that?

Bill: Janiece had already been using Sycle but only as a scheduler. She was about to find out all the things she could get out of Sycle. We’ve started down the path of integrating Sycle features, such as QuickBooks sync, Noah sync, Edocs, Eclaims, Healthiplan, PayJunction and chart notes. She recently purchased a PC-based audiometer and now, Rincalina Hearing Center is paperless!

We introduced her to Jeremy Kiecker, and her accounting issues are solved. Janiece had always been so stressed out about bookkeeping. She used to drop off a box of receipts for her accountant and wait to see how she was doing. Not knowing what’s going on in your business causes major anxiety. Now she sleeps better knowing Jeremy’s on it.  And with all of her data in the cloud, Janiece no longer worries about computer crashes.

Chelsea: That’s so valuable - I can imagine this allows Janiece to spend time and energy focusing on more important things in the business than data security and business continuity. Tell me about her office space.

Bill: This was really fun. When I met Janiece I joked that her office looked like a bail bondsman's.   I’ve seen too many offices that look like this. If we expect people to spend thousands of dollars on technology, shouldn't the ambiance reflect the quality?

I think every office should have its own vibe. At our office, we’re dog and music lovers, so we had an office dog for years, and we have nice stereo systems in our fitting rooms. Janiece is a gardener, loves plants and has lots of them around. Another audiologist friend of mine does underwater photography. He displays his pictures and videos around the office, and his patients love it.

Lighting, new paint and a little artwork did wonders for her office.  Now the environment reflects the kind of care Janiece provides. With the self-select sales method and her new surroundings, her confidence is much greater. She hears a lot of positive comments from patients.

Chelsea: She was so discouraged that she was going to give up, and now she’s happy, confident, and helping more people than ever.

Now how are you helping Janiece to drive new patients in in what I imagine is a pretty competitive market like Tucson? Is she taking on your test drive process and the marketing that goes along with it?

Bill: We’ve been marketing with the test drive ads as newspaper inserts and tying them into her website. In so many markets, newspaper advertising is prohibitively expensive these days, but you can always get the test drive message across on your website. I received an email from Janiece just this morning that said she’s been getting more and more calls from the inserts.  Right away they paid for themselves, and now the consistency is starting to work. Over the next six months, we should see a steady increase. Again, she’s not advertising a product or manufacturer brand.  She’s building and promoting her brand.

Chelsea: Once again, we have to look at the results. Has all of this made a difference?

Bill: Her revenue is up 180%, when we look at March - October 2015, as compared to the same time period in 2014.  Of course, we started with small numbers. We don’t expect this kind of growth to continue but I’m confident she will see steady growth. She’s so happy - not only are more people coming through her door, but she is more confident with the self-select method and her new professional surroundings. This is a win-win-win.

She’s doing so many of the little things right. She even got her first Yelp review. We believe Yelp is the best review site going. I just checked, we have 28 5-star reviews on Yelp for Kenwood Hearing Centers, and I noticed we had a new patient intake just yesterday from Yelp.

Chelsea: How encouraging – if a business that was on the verge of closing can make this kind of turnaround, it would seem like anyone can.  And it sounds like what you have done with Janiece might transcend a transactional relationship.

Bill: Absolutely.  Janiece and I have become good friends.  We talk sometimes multiple times during the day.  It has been a lot of work to get her business squared away, but you can't help but develop a nice personal relationship.  I was down there a couple of months ago at their beautiful property.  They have 5‑acres just south of Tucson. The relationships with great people like Janiece are really the most fun part of this.

Case Study - Practice 2

Chelsea: Janiece isn’t the only person you’ve worked with to make changes to their practice. Let’s talk now about Nanci Campbell. 

Bill: Nanci Campbell is a good friend of mine. She has a very nice private audiology practice in Carson City, Nevada. Things have been going well for her but she realized she’s missing out on an important source of new patients, which is physician referrals. She asked me what she should do.

Chelsea: So, it sounds like Nanci was in a very different position than Janice – more established and not needing a lot of help, but clearly wanting to find a way to grow sustainably. What did you suggest that she do?

Bill: I recommended that she hire a physician liaison.  We put her in touch with our physician liaison, Kathy. 

Kathy has been calling on physicians in our market for the past four years. She regularly visits about 50 doctors. She’s determined that six weeks is the perfect interval, not coming around too often but often enough to stay top of mind.

She makes an effort to connect with the front office staff and rarely talks with the doctors. She brings a unique small gift, usually something like local honey, almonds or other healthy snacks. She always leaves an article that would be of interest to the doctors.

Occasionally the doctors will ask for a lunch and learn with us and we’re happy to do that, but the premise is to connect with the referral person and staff. Again, persistence and consistency are key.

As an example, Kathy called on one particular office for 18 months with no results. They weren’t even very nice to her but she kept coming by every six weeks. One day, we got a referral! And now they come regularly; her persistence paid off.

To support Kathy’s efforts, my staff is diligent about sending our reports to physicians.  We use CounselEar, which integrates beautifully from our PC-based audiometers into Noah and Sycle. I like it when I have the report written before the patient has left the parking lot.

The results have been phenomenal - Nanci has seen a 43% year over year increase in physician referrals, based upon her intakes.

This is the number one reason we’ve grown so much at Kenwood Hearing Centers over the past four years. It took some time to develop our physician marketing program - we didn’t see much for the first six months, but steadily the referrals have increased year over year. This is a very sustainable source of new patients. What could be better? If you don’t have a solid program for nurturing physician referrals, I’d recommend starting one.

Chelsea: Physician referrals are definitely the new frontier of practice growth. How were you able to take your success at Kenwood and replicate it in Nanci’s practice?

Bill: Nanci asked if Kathy could train a physician liaison for her, and now, Kathy does this for practices around the country.  Nanci hired a physician liaison named Rachael and they got to work.

When Kathy trains physician liaisons, she spends time teaching them how to approach a doctor's office. She provides the liaison with gift ideas for the staff and provides articles for the doctors. She is like a coach, and this gives the new liaison confidence to move forward. With follow up calls and additional training as questions come up, Kathy can help ensure the success of the new program.

Chelsea: The data show it was definitely worthwhile in Nanci's case.

Bill: Yes, the results are good and I know they’ll continue to get better. It’s like a snowball effect; it just grows and grows if you are consistent. Consistency being the key, we don’t recommend the practice owner making the calls. We’re not trained to do this and over time, the consistency drops off. It’s best to have someone else make the calls, who you know can show up every 6 weeks.

Physician referrals are key to building a sustainable private practice. No task is as worthwhile, in my opinion.

Summary

Chelsea: Today we discussed three different stories - three very different businesses in different locations around the country in different situations. All three were able to dramatically turn things around in their businesses in a truly sustainable way.  That's what Pivot Hearing is all about – we run four, soon to be five, clinics here in the Bay Area and have an amazing team of people who continue to grow the business day after day, year after year. In fact, we pulled the numbers just last night and we are already up 41% over last year, which was a record breaking year. We’re good at what we do, and we want to share our ideas with other clinic owners to help them be successful and stay independent.

We do this in a few ways. One key piece is developing a renewable flow of new patients through things like physician referral marketing, community marketing, and even developing marketing messages for the web, newspaper, and other mediums that really work. We also focus on efficient operations design – the top line is important and that’s where a lot of us tend to focus our energy, but the bottom line is equally important. This encompasses things like practice management software implementation and usage, inventory management, and all kinds of things to make a business leaner and smarter. We are a team of eight people and have been in business for over 35 years.  We generate ideas, test them, and bring them to practices proven and ready to go. We hope that these case studies have demonstrated that we know how to plant and grow offices. We would love to have a conversation with hearing care professionals about their businesses and the opportunities in their local markets.  Contact us at www.pivothearing.com

Bill: Good private practices are positioned to thrive even in the face of all the new competition. We’ve just got to be willing to change. There’s a big market out there for high quality hearing care.

Recently, I was at the grocery store and I saw something that drives this point home. Have you heard of Ballast Point Brewing Company? They make high end beer - most notably, a beer called Sculpin. The brewery just sold for one billion dollars.

I noticed a 6-pack of Sculpin on the grocery store shelf, and the price was $15.00. Right next to it was a 12-pack of Rolling Rock for $7.99. What would happen to Ballast Point if Rolling Rock dropped to $3.99 a 12-pack? I think nothing would happen. There is a place for a high end hearing care practice just like there is a place for high end beer.

Don’t worry when you hear about a new Internet retailer - let the cheap hearing aids get even cheaper. Don’t be fearful when you read doomsday message boards.  Chin up, everybody. The future is bright for sustainable private practice. 

Questions and Answers

Can you briefly expand on your hospice program?

Bill: I have to give credit for this idea to my friend Harvey Sparks, who suggested that we get involved with hospice. So, I went to the local hospice office and offered my services, but that didn’t go anywhere.  A few months later, a local physician came in for a hearing test and mentioned that he was the medical director of the local hospice. I showed him our used hearing aids and told him we wanted to put them to use. We started a program whereby we get referrals from the hospice staff or families, and go in and fit the used hearing aids to people who need them.  We make temporary earmolds and get basic audio results to help these people to hear better at a time in their lives where they are not in a place to buy new products.  It’s very rewarding.

Chelsea:  We have a recommendation letter from the director of our local hospice that we can make available to professionals who are looking to do this in their area.

Bill: One thing to do would be to call the local office and tell them you would like to make a donation; tell them you would like to donate your services.  Here in Petaluma, hospice runs a thrift store and there is a sign to donate hearing aids.  They collect them, and every few months I pick up what they have collected.  If you are looking to start a hospice program, please let us know and we would love to help you out.

Did you charge for the theatre loop installation?

Bill: We did not charge the theatre - we donated the loop and the labor in exchange for on-screen advertisements.

What is the composition of your staff in your private practice?

We have 3 audiologists and 4 hearing instrument dispensers, a front office person in each office, and a bookkeeper who works 3 days per week.  We are pretty lean compared to staffing I’ve seen in many practices, and I always make sure we are out the door at 5 o’clock.

99Designs is an awesome way to get a logo!  I also got my practice’s logo from 99 Designs.

Chelsea: Thanks for your comment and we agree!  I have done about ten projects through 99 Designs.  If you have not worked with them, check them out.

Do you worry that people who try hearing aids before they buy, will not come back to pay for the hearing aids?

Bill:  That is a good question that I get asked from time to time.  In our experience, it has not been an issue with the thousands of hearing aids that we have let patients try over the years.  I think maybe one patient may have gotten ill, wound up in the hospital or have had other extenuating circumstances, but people just don’t steal hearing aids. With the Unitron Flex, it will only last for six weeks and then it will die anyway.  You also have loss and damage insurance, or can work with the manufacturer if something out of the ordinary should occur.  I don’t worry about that; I’m much more interested in gaining someone’s trust and gaining a new patient.