Figures, Figures, Figures, KPIs & How To Use Them In Your Health Practice
Now is the time that you need to take stock of what has happened in your practice in the last year. That means the figures, the figures, the figures. So, what figures are important to review, understand and concentrate on?
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Revenue
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Profit
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Unit Volume
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Average Selling Price
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Conversion Rate
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Return or Cancellation Rate
Profit: After you paid every single bill, how much was left, how does it compare to last year and again the last five years?
Unit Volume: How many hearing instruments have you sold, again the comparison is one and five years.
Average Selling Price: ASP is the average selling price per unit, yep one and five.
Conversion Rate: This is the ratio of sales to initial consultations, you guessed it one and five.
Return or Cancellation Rate: How many people gave the units back as a percentage of how many people bought, don’t need to tell you one and five any more do I?
All of these figures or KPIs will give you a real idea of exactly where you are, how you are doing and also what you may need to look at as you plan for next year. There are also other figures such as Binaural Rate, Return Business Rate, Service Care Fulfilment etc. Generate these figures and then assess yours against industry norms.
These figures have real value for your business, they can tell you where you are, identify any problem areas and give you a head start on planning for business and personal development for next year. This will allow you and your business to grow where you need to and to consolidate where you do not. The reasoning in comparing over a five year period is in order to identify any changing trends over that period.
If trends have changed, ask yourself why? Are you doing something differently, are you doing something now that you did not before? Are you not doing something now, that you did do before? These can be enlightening questions to ask yourself.
Independents in my experience appear to have much better quality leads and therefore convert at a higher rate. Unit Volumes would also be different, even though Nationals have poorer lead quality, their unit volume tends to be slightly higher than Independents. These are just some of the differences across the industry, but no matter which sector you are in I have no doubt you have a good handle on what are accepted norms.
So, why should you generate these figures and then query them? Because you want your business to not only survive but thrive and these figures will assist you in that goal. You can not effectively have the information you need to survive and excel unless you have the data upon which to base important decisions.
You should generate the data and then honestly query those KPIs, identify your weaknesses if any and then plan how you are going to deal with them. This process can be undertaken as part of the wider RATER process that I discussed earlier this year. In this way, your business will have the foundation to not only survive but thrive.
Regards
Geoff
