Truth in Numbers: What Your Phone Conversion Rate Means to Gross Margin

By Stewart Gandolf
Chief Executive Officer

We’re going to tell this tale mainly by the numbers.

To “numbers people,” figures say it all; an Excel spreadsheet tells a story more excitingly and effusive than any Harry Potter novel. If you are not fascinated by columns, rows and formulas, please stick with us for a minute, then pass this along to your administrator, business manager or CFO.

And if you are a numbers person, look at this and tell me what it says to you:

Provider comparison chart

Here’s the bottom line answer: If the conversion rate on inbound phone calls increases from 20 percent to 30 percent—and everything else is the same—the Gross Margin for “B” is 50 percent greater than “A.” ($525,000)

A British company inspired this example, and you are welcome to plug in your own numbers and talk to your resident numbers person. The only difference between these two providers is having the staff training to convert inbound inquiries to office appointments.

Two out of ten calls for “A,” vs. three out of ten for “B” doesn’t sound like a big difference until you realize that the “little” difference on the phone produces a 50 percent higher gross margin. So it isn’t more inbound calls, higher fees, larger office or better chair-side sales. It’s the telephone conversion rate that makes all the difference.

To be candid, there are far worse scenarios than Provider “A.” In our work with healthcare practices, medical groups and providers throughout the nation, it is common for us to discover that a lot of prospective new business never moves from phone call to appointment. It’s unintentionally killed at the front desk.

More numbers: Nine out of 10 healthcare organizations and practices lose money every time the phone rings. That’s especially true in handling (and not converting) advertising generated inquiries. And with larger case sizes than our conservative illustration, the lost opportunity and unrealized revenue is staggering.

In nearly all of the real-world situations where we’ve been able to help, the problem is in the complete absence of staff training in phone skills, call handling and converting calls to an appointment. We can help you with that. If you’d like to know how serious your problem might be, or if you want to talk about how phone success training can make a big difference to your financial “numbers,” we’ll help you run the numbers.

Stewart Gandolf
Chief Executive Officer at Healthcare Success
Stewart Gandolf, MBA, is Chief Executive Officer of Healthcare Success, one of the nation's leading healthcare and digital marketing agencies. Over the past 20 years, Stewart has marketed and consulted for over 1,000 healthcare clients, ranging from practices and hospitals to multi-billion dollar corporations. A frequent speaker, Stewart has shared his expertise at over 200 venues nationwide. As an author and expert resource, Stewart has also written for many leading industry publications, including the 21,000 subscriber Healthcare Success Insight blog. Stewart also co-authored, "Cash-Pay Healthcare: Start, Grow & Perfect Your Cash-Pay Healthcare Business." Stewart began his career with leading advertising agencies, including J. Walter Thompson, where he marketed Fortune 500 clients such as Wells Fargo and Bally's Total Fitness.



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