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Referral Pipeline Rules Made Simple: Physician Marketing Basics That Keep It Flowing

By Stewart Gandolf, Chief Executive Officer

Metal pipes stacked together against white backgroundEach year, about 22 million patients are referred from one healthcare professional to a professional colleague. And patient referrals account for hundreds of times more than that number.

In physician marketing, direct referrals into the practice often represent a large and significant segment of new business development, which, regrettably, is a neglected part of the doctor marketing plan.

We're talking about the two distinct types of inbound referrals—patient referrals and professional referrals—where business development costs are low and the results are exceptionally fruitful. What's more, referrals into the practice are one aspect of doctor advertising that is relatively low-key, reflect positively on your reputation and build your physician marketing and branding message.

  • Patient referrals —when one individual refers a friend or family member-are prized as new business and as a measure of satisfaction and a job well done. The parallel in the retail world is a customer-to-customer endorsement and recommendation.
  • Professional referrals —most commonly from a healthcare generalist to a medical specialist-are, for some practices, the lifeblood of new business. In the retail world, the comparison is the development of one or more strategic partnerships.

Although this all sounds easy and appealing, a successful referral pipeline requires constant care and feeding. And much of what's required amounts to things you already know, stuff you intend to do and procedures that should be working. The primary enemy of these good intentions is most often unintentional neglect. More accurately, "some things slip through the cracks" in an ultra-busy office environment.

Consider this a refresher course for most readers...and a timely reminder that referrals represent a major revenue stream that takes time to establish and only moments to erase from the bottom line.

4 reasons that referred prospects have greater value.

A prospective patient that has been referred to a doctor's practice inherently has a higher value for several reasons. Depending on the nature of the practice and the referral circumstances, each of the following reasons may carry different weight, but all are likely to apply to some degree.

  • Referred prospects are pre-qualified. Almost by definition a prospective patient in this category will be in need of a service or product. Acting on the recommendation of a source that they trust, the individual has sought your professional services.
  • Referred prospects are pre-disposed. When a prospective patient acts on the referral—by calling or making an appointment—it is a proactive step on their part toward buying. Your credibility is high. If they did not have a need or want your services, they would not be acting on the referral.
  • Referred prospects are not always pre-sold. They are, however, likely to be less price sensitive and more open to accepting a course of treatment. Typically they are inclined to buy if their expectations—based on the referral—are met.
  • Referred prospects are inclined to refer others. Those individuals who have been referred (and find good results) often continue the process by making referrals themselves.

7 guiding principles to keep a referral pipeline flowing.

Consistently deliver a service, product and/or patient experience that inspires referrals. "But of course," you protest, "we're always excellent at what we do and everyone knows it." If that's truly your situation, move on to the next point. Realistically, however, the objective here is to break through to and maintain an exceptional level of patient satisfaction that they want to comment to friends, relatives and other professionals. By the way, chances are that not everyone knows your reputation, but this is one of the ways it grows.

  • A continuing referral stream is the product of a deliberate and unfailing systematic approach. Neither professional referrals nor patient referrals occur consistently by accident. Your practice reputation alone will not carry the day. Reliable results come from a system that always holds a high priority for the provider and for the staff.
  • Identify and cultivate your best sources of frequent referrals. For both professional and patient referrals, know who makes referrals and why—your strengths—they refer to you. Expect to find the 80-20 Rule at work. It will be the "vital few" (20%) who are responsible for the vast majority (80%) of the results.
  • Understand expectations and motivations. Above and beyond the need for clinical services, what does a referred patient expect from you when they have been referred? What does a referring physician expect from your practice in order for them to make, or continue making, referrals? Set a standard that exceeds these expectations.
  • Constantly educate patients and professional referral sources about how you can help them. Neither the patient nor professional colleagues are fully aware of all that you do. Communicate benefits, not features. What are the ways you can make their life easier or better?
  • For professional referral sources, master the feedback and follow-up. Invest time in letting referring physicians know what's going on. Find out what they want to know, in what form and how often, then deliver it consistently.
  • Anticipate change; grow your professional referral network now. Many, if not most, healthcare delivery systems and referral chains are no longer predictable. Don't wait for connections to disappear before developing alternatives.
  • Appreciate and acknowledge referrals. Mindful of the professional guidelines about tangible rewards, both professional colleagues and patients draw personal satisfaction from knowing that referrals are appreciated. A word of thanks, a handshake and a personal note can mean a lot. (See the 80-20 Rule note above.)

The referral pipeline flows when there is a system in place to make it happen. Professional colleagues and patients alike will refer when they can see how your services can be of benefit to others. It's not magic, nor is it automatic. And for more about building a successful referral system (and avoiding mistakes), there's a related newsletter article here.

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