Latest / The Word of Mouth Podcast / The Good Neighbor Method: What Dentists Can Learn | WOM 031
Transcript
- Jeff: Welcome back to the word of mouth podcast, the dental marketing podcast where old school is the new school. I'm your host, Jeff, and I'm joined tonight with my co-host, Troy. Troy: Good to be with you, Jeff. Jeff: Awesome. So tonight we are going to talk about last week we talked about a car salesman, probably the most untrustworthy, maybe most unsavory profession. Today we're going to discuss another very unsavory profession and what dentists can learn from an insurance agent. So talk us through the nineteen twenty two origin of state farm. Troy: Sure, and you know, just so that we don't offend or offend our our car salesman and insurance salesman friends, unsavory doesn't speak to the profession necessarily, but just the perception that many people have regarding their interaction with with those salesmen. so State State Farm back in the twenties, wa was an insurance company and a gentleman he he had been a farmer, he had had some struggles looking for a change in terms of providing for his family and decided to go into selling insurance to to his community. And the the approach he took was a little bit different in that instead of being a salesman first, he was a neighbor first. And really, because he understood the farming community, he understood that you know, the the nature of of what they do and the financial ups and downs that they deal with, he recognized that they were significantly overpaying for the amount of insurance that they were actually being provided. And so he, you know, really worked to create new new offerings, new products that more closely aligned with what he really knew that his neighbors needed. And so, you know, he was in that sense the original good neighbor. And he did so just by providing identifying and providing what it was that that his community, that those people he knew and that he was connected with, what they really needed. Jeff: Yeah. If any of our listeners have heard of the progressive safe driver discount, what George Merkel Merle or Merkel maybe what what he did when he founded State Farm was effectively that. He realized that these farmers weren't driving as at highest speeds or on as busy of roads, and so they didn't need as much insurance. They weren't as high risk as people who were driving their cars faster and in the cities. And so he remade insurance for these these farmers in the communities. And as a result, he was able to build a very successful insurance agency very quickly. By the the mid twenties, it was already growing to be a competitor with some of the the old historical insurance agencies. Troy: Yeah, and and at that point, you know, they kind of got a little bit adrift, you know, as as companies so often do. they they they have some success in the area where they have advantage, where they have differentiation, and then they think that that automatically should transfer to a broader market. And at that time, back in the twenties, you know, there ended up being some significant headwinds that That State Farm as a company bumped into. And so, you know, ultimately their growth trajectory was was you know, really build out a niche, look to try to expand too quickly, retract a little bit back into that niche, and then really get themselves on, you know, obviously what's become a bit of a moonshot in terms of their their growth trajectory to where they're the largest. auto and casualty ensure in the country in you know and in the the entire United States. So obviously a great story that starts with community and really within that phase portion of their growth or that sorry within that growth portion of their of their origin story really retracting back, removing back to to the niche in which they really have advantage and or really had advantage and really had some differentiation. Jeff: Yeah, they they started being successful by being a good neighbor and then in the twenties the mid twenties they started offering their services to kind of anyone and they lost a lot of money, they changed kind of their court offering, so they went back and then in the seventies is when it was Barry Manilo who recorded the original State Farm jingle for five hundred dollars. Like a good neighbor, State Farm is there. And it it's stuck. It's they are an agent first, so they're in your communities. And that's always been since that kind of faux pas in the mid twenties, that's been their MO is being a good neighbor and understanding what the community needs and providing insurance or providing their product according to those needs. Troy: Yeah, no, that's exactly right. And you know, obviously the the lesson the transfer to to dentistry is you know is is pretty obvious that with a community based business model like the private practice dental model is, there the advantage that the dentist has is geographic and its relationships. So they have, you know, the wherever they're located, they have a convenience element and a familiarity element that they can leverage. They also have relationships with both their current patients, family, friends, other connections in in the community, speaking community more broadly than just the geographic consideration. but they have some of those advantages. the question is, are they being leveraged? Is that the focus of kind of the business decisions, or are they making some of the mistakes that to that we see from State Farm back in the, you know, mid to late twenties where there was a they they really were almost jumping past the the neighbors and the community with whom they had advantage, trying to target s you know, strangers or or offer products or services that just weren't aligned with with where they had competitive a advantages and we see that same type of thing happening with a lot of practices. Jeff: Yeah, dentists have seen DSOs come in and be successful at running ads and running new patient specials, all of those things. But the problem is that there is a different l infrastructure that exists for those dentists and the products and services they provide as DSOs that those advantages are really hard to capture as a private practice dentist just because of the nature of the difference in the products and services provided by those those private practice providers. And so it's it's really something it's a great parallel of jumping past where you maybe should because it seems like you kind of see the grasses as greener. And then as you a as we've spoken with a lot of dentists, it's been the reality that Ads have gotten more expensive, insurance has gotten more competitive in terms of the insurance patients and and a reimbursements aren't coming back, people are more price sensitive than ever, and the globalization of the internet and all those things has made it more and more and more competitive to compete in those spaces that are non-relationship driven. But if dentists can get back to, and they're I would say almost wholly unique. in a trust based practice can see sixty, fifty, sixty, seventy percent of their new patients coming from referrals. That's that's unheard of across any other industry we've ever worked with. And so dentists do have a huge advantage as a private practice. They just need to be recognizing that they need to take advantage of that while also leveraging any any of the other things as they continue to grow. Troy: And and Jeff, what would you say are some of the w what's keeping that from happening? You know, you you say it and it sounds so obvious, but you know, what do you see as keeping some of that stuff from happening? Jeff: Yeah, I mean I think that there's some of the kind of easy to do, but easy not to do, or maybe harder to do than other things. And so saying, Hey, I'm just gonna throw money at ads certainly feels easy. whereas sending out personalized outreach to your patients is a little bit more challenging. It takes takes more time and energy. But beyond that, I think that that stems from a different focus of new patients as the key indicator of success for dental practices. And I think that that that is not really new patients is not what drives bottom line revenue and profit. necessarily. It's just the number of patients you're seeing. And so if you can retain patients, that's That's a place where you can get them. If you can get referrals, non nonpaid new patients, that's a place. And if you can increase the value of patients, so providing a better service or or membership plans, any of these things, that also increases those bottom line numbers that are actually more important and and meaningful than just the vanity metric of new patient count. Troy: And do you see though that I mean is the problem sort of a a a marketing industry export to the dental practices, or is it a dental practice export to the marketing agencies with with whom they're working? I mean, I I understand, you know, I see I everyone can see kind of the problem that you're pointing at, which is, you know, paid ads aren't going to produce we can st we can simply say we talk with nobody that's happy with with their with their Google ads or with s SEO, you know, it's patient quality or or consistency, whatever. No one's happy with it and yet it's still what we're hearing everybody talk to. So do you see it kind of flowing from dentist to marketing agencies or marketing agencies to dentists? Jeff: Yeah, I think it probably flows both directions. I think, as agency owners ourselves, we've tried our hands at ads before because it's an easy way to increase the value of your service you're providing. So I think that that is something that marketing agencies have pushed on dentists and now dentists have heard that same messaging from marketing experts over and over and over again. And now when they go to marketing experts, they say, Well, if you don't sound if you're not saying the same thing that I'm hearing from these twenty five other agencies, I like I'm not interested because kind of the vast majority probably rules in terms of what's working. And so it is an interesting dichotomy that it's it stems from the marketing agencies to the dentists and the dentists back to the marketing agencies. Is that kind of how you're seeing things? Troy: Yeah, I I I I I think you're right. you know, and I think some of it just from a practical standpoint is that it it's such an easy thing to measure. You know, I I have empty seats and or I saw you know, attrition from from people coming back. So there's an identifiable gap. And if I get a certain number of new patients in this month, it's From a business perspective, it's probably the easiest thing to measure, which you know, there that that probably contributes to it. I don't know if you you know, if you feel the same way that it's just one of those kind of vanity metrics to some extent that's just so easy, people have a hard time kind of getting past it and talking about anything else that might be more meaningful. Jeff: Well yeah, it's really easy to measure rankings. It's really easy to measure return on ad spend or what any number of those metrics and the dashboards behind these advertising platforms make it even easier. So that's why when I say it's easy to provide that service, that's from a marketing company perspective, it's much easier to sell something where you could say, Look, we can give you these magic numbers and it'll look like everything's great. actually I just heard an ad on the on a podcast the other day for LinkedIn and they were talking about bull spend. About cut the bull spend, the kind of spending money and getting numbers back. Anyways, it's a funny ad, but it's exactly kind of what we're saying, which is cut the bull spend, i just having these vanity metrics, new patient count. If you have seventy new patients come in and sixty five are going out, that's not super sustainable, like eventually that new patient flow through your practice starts to drop to a trickle where if you have 70 new patients and you retain all of them and you're going up 10, 15, 20% patient count year over year, that's how your business grows. And then if you want to drop insurance or there's certain patients who maybe you aren't as excited about seeing, or there's more of certain cases you want to target. You have the flexibility to do that because you've retained the patients and you have the the foundational patient base. It's like State Farm. They they move too fast. They went all in on new clients. But when they relaxed and then just built that slowly over time by providing the same service and then slowly expanding that circle, I mean that's State Farm may look like an overnight success, but if you look at it, they're really a hundred years success, but they're they're the biggest because they did the right thing for a hundred years. Troy: Yeah. No, I think that's right. And I think that one of the challenges is and you kind of highlighted it, but I'd be interested to get your your take on this. You know, statistics are always really interesting or these these KPIs, key performance indica indicators are always interesting. And so the question, you know, and we've talked about the leaky bucket, question isn't how much is coming in the top, it's how much are you holding on to, how much are you retaining. And a lot of there's a lot of different stats that are out there. The one that's probably used the most or that I've seen reference the most is f is just a forty-one percent second appointment rate for new patients. So, I mean, getting back to your point, if you're getting you know, new patients in, but only four out of ten of them is someone that you're ever gonna see again, what does that do to kind of the the longer term outlook for that particular marketing approach. Jeff: Yeah, and I I mean, we'll talk about this a lot more next week, but it's kind of the horsepower question of Langley versus the horsepower question of the Wright brothers. And we'll get into that more. but right now it feels like the idea is if I just put more money in, then eventually that problem will kind of solve itself. But if you're putting more money into something where you're only getting forty percent of those people coming back, well, at some point you are gonna hit that finite amount of people that are willing to come in from ads. Troy: and even if you don't, I mean you could theoretically go to the next city or whatnot. So I don't even know that y that it's a a function of of the market necessarily drying up completely, but it's just Jeff: No, yeah. Troy: you're you're constantly having to keep refilling the bucket. And there's sort of you know, and we'll talk more about it, but there's It's I think what State Farm illustrates is there is a different business. Like every business kind of has two two businesses going on. You know, one that is sort of fill the top of the bucket, one that is is really sort of build it in a way that's sustainable so that it's kind of self perpetuating and even compounding. And and I think that's the challenge that you have with, you know, spending more or even just expecting paid ads to, you know, to be the long term solution is i if you're only retaining 41% in a relationship-based industry, it seems like there's something that's that's that's messed up in you know in in that model, especially if we're seeing higher retention on, you know, on referrals, for instance. So I think that's part of the issue too, is y you're betting on kind of one half of the business and when you bet too hard on that. You know, that normally comes at the expense of of ignoring the other side. So again, not to get too far into those weeds, but but being a good neighbor, obviously there's something to be said for it. Jeff: Yeah. And focusing on what is working. I think that that's dentists for the last two hundred years have grown their business by being a good neighbor. It's only recently that they've been growing by trying to pay people to be their neighbor. and so and I should just clarify, I'm not saying that the the well dries up in terms of there's no more people, but you either have to spend more to out compete for that. Or you have to expand the circle, which means people will be less likely to come, which means you're spending more. And so we ran our own clinics and the answer from our marketing agency was always just spend more, just run more ads, more creative, all those things. And that i it was not sustainable. It we've we learned you grow by being a good neighbor, or or just building those relationships. Troy: And and I will say just the the companion piece to that is saying, you know, we'll we'll take it from a dentist perspective. What are the characteristics of a practice that you really want? You know, what are the characteristics of the practice that a dentist force kind of foresaw owning as they were in in dental school? And you know, normally the characteristics are going to be I get to provide. great dental care to people who just come back year after year. And when I give them a recommendation for some treatment or for some for some service, they accept it. You know, it's really focused on great dental care and relationships. Now all of a sudden they find themselves really scrambling to fill chairs and, you know, really concerned about the bottom line. And so I as we've talked with them, so many find that that's the ideal. That's what they really dream of. That's that's the practice they want. And yet they find themselves just focusing on on peddling their, you know, their dentists. Like they're they're having to go out and and you know beg people to come and let them give them you know, great dental care. And it's just, I think for some dentists, it's just really distasteful. So some of it comes down to just saying, you know, what is the practice that you really want? You know, and if do you want that stability? Do you want that compounding growth? Do you want those ongoing relationships? Do you want those people that accept treatment, that show up for their appointments, that you know, that book every six months and they just keep on coming in? And if that's the practice that you ideally want, you have to look at the half of the practice that produces that and recognize that the other half where you're paying people, there's a place for it. And we're certainly not saying you don't You shouldn't ever do it, but just an acknowledgement that it's not aligned with what most dentists really want out of their practice. They don't want to be salespeople. They don't want to be dealing with, you know, paid ads and marketing and trying to figure out how much more do we have to pay to, you know, get people into fill chairs. We want to have relationships. We want to be providing this great dental care. And that should be enough. Provide a great service, you know, provide expert. dental care, give them a great in clinic experience. That's something that, you know, a dentist can say, I can wrap my brain around. And that feels like that should be enough to get people in. And and it can be, you know, State Farm, getting back to our analogy, it can be, but it has to be there has to be a bit more focus on what do we do to make that happen. Versus just, hey, I'm gonna find a better agency to, you know, use better keywords or spend more or whatever else, recognizing, boy, you know, f six out of ten people that that come in, they they don't want a relationship. They're not looking for a relationship. That that's you know, that's just a that's kind of a a tough bet if what you're really wanting is that other half of the mar the business that's really, you know, has those characteristics that that most ends really want. Jeff: Yeah, absolutely. So next week we are going to talk about how the Wright Brothers took down a giant, someone with ten times more power, ten times more resources, and they did it by focusing on something different. And so we'll talk about that. appreciate you being here. If you'd like to hear kind of what we have to say about where your practice is in terms of building relationships and where they kind of rank on the trust scale. please the the link to book a call is in the description below this video or below this podcast. subscribe for next week's episode and and all future episodes. We love talking with our dentist friends about how to market your practice in a very rapidly changing marketing world. appreciate you being here and look forward to seeing you next week.