Murphy's Law: Grow 15 Percent Without Adding a Single New Client
Murphy's Law: Grow 15 Percent Without Adding a Single New Client
You can grow 15 percent without taking on any more clients. Sounds crazy doesn’t it? It is actually a very sane and easy strategy to pursue. You simply need three things to predictably accomplish this worthy goal.
- 100 percent retention of your existing business.
- Increase your current clients business.
- Decreasing the number of laboratories your doctors use.
Think about this for a minute. If you did one million in revenue last year and each doctor had an average production with you of $3,000 per month and used the national reported average of 3.5 laboratories. It looks like this.
27.7 active clients doing
X $36,000 annual per doctor
$1,000,000 annual sales
Using ADA statistics of approximately 700,000 production per practice and 8 percent to 9 percent laboratory fees as a percentage of production, we get approximately $56,000-$63,000 in laboratory fees per practice. If we use the low estimate of $56,000 and the above information about number of laboratories used per practice, and we could concentrate their business more with us, there is $20,000 (the result of $56,000-$36,000) per office of additional laboratory revenue available up for grabs.
Let’s also assume that if they grow, we grow with them. If you could help every one of your average $36,000 clients grow 10 percent next year your business would also grow 10 percent.
So let’s recap.
If we helped each of our clients grow 10 percent we would grow the same = net 10 percent
If we concentrated their business with us and eliminated just one other laboratory they used we could acquire half of the $20,000 that is up for grabs ($10,000) = net 27 percent
If we raised our fees 3 percent (inflations adjustment estimate) it would = net 3 percent
That is a total available increase in revenue of 40 percent.
If we were only half as effective as we could be in these efforts it would still allow us to grow 20 percent without getting a single new client. Also, we assumed 100 percent retention of existing accounts. Although that is not likely, it is not impossible. If we strive for this high goal and fall ever so short, our 5 percent buffer from the model above will more than cover the occasional defection.
If you recall from the opening section of this article: It is actually a very sane and easy strategy to pursue. Sane and easy to pursue, but not necessarily accomplish. To achieve these kinds of numbers, you will need strategies and tactics that help you grow your doctor’s practices, increase their customer engagement with you and keep them fiercely loyal. To do this, we need a dramatic shift in the paradigms that have become dogma for us in the laboratory profession. We will need to focus on the customer in a way that risks how we are perceived or how we think we should be perceived.
- Do we sell stuff?
- Do we sell to dental practices that need stuff?
- Do we sell to dental practices at a fee that is competitive to other commoditized products and services?
- Do we do so with courteous and attentive customer service?
Or could we change that model to becoming an unpaid (in traditional methods) member of their team - a resource that helps them grow, prosper and become more fulfilled in their noble profession? Can we help reduce the stress the doctors, assistants, hygienists and administrators feel? Do we help them plan, choose and execute restorative plans that enhance the well being of their patients? Are we a trusted advocate to whom they look for advice, guidance and counsel on a myriad of issues?
If so, it would be plausible to help our clients grow into greatness and retain a larger share of their chair. Same client growth of fifteen percent would seem easy and their referrals would flow like a river.
