How amazing would it be if you had simple steps to doubling or even tripling your practice revenue this year? What would that do for your business, team members, and family?
As impactful as Facebook and other dental marketing strategies can be to attract new patients or build your dental practice, one of my favorite ways to help dentists is by helping them test, measure, and improve key areas of their practice using simple systems and key performance indicators, or KPIs.
KPIs are just another term for ways to objectively measure performance. You can measure individual performance, such as revenue per hygienist; team performance, such as the overall percentage of patients with future appointments; or even practice performance, such as your rent as a percentage of revenue.
Understanding these and other key statistics has many benefits, such as getting your team working together, holding you and your team accountable, and promoting consistency in performance. Because of these and the many other benefits, revenue and profits grow naturally when practices start testing and measuring key performance indicators. In fact, when I started doing so, my revenues tripled within one year. Many dentists who go through our Delivering WOW Business Acceleration Bootcamps experience incredible growth, too, often achieving more in a matter of months than they do in years before focusing on revenue-boosting KPIs. Here are key steps to get started doing the same with your practice.
1. Speak with your team about the benefits of measuring KPIs and implementing simple systems.
Testing and measuring can feel like a big change for your team if they don’t understand why it is so important and how it’s going to help them and the practice.
Team members might feel threatened or like you don’t think they’re doing a good job if you just spring it on them without having discussed your goals with them. For example, if you’re committed to building a Delivering WOW practice, you know how important it is to train your team members and put systems in place to help them perform tasks consistently. Telling your team these things will help you identify areas you need to better train them and can help relieve some of the concern they may have about having their performance measured. Reassure them by explaining how this is going to help everyone.
2. Identify key statistics to measure
If you’re just getting started, start by measuring performance in a few key areas to identify areas you may need to focus on first. I encourage dentists to focus on no more than twenty KPIs when they’re getting started, choosing the highest-impact KPIs because they will bring eighty percent of the results. Once you have those working for you, you can add others to continue to grow. Here are some of the higher-impact KPIs for a dental practice, along with how frequently I recommend checking each of them:
- Monitor production (revenue) (daily, weekly, and monthly)
- Monitor collections (daily, weekly, and monthly)
- Number of transactions per category (daily, weekly, and monthly)
- Number of new patients who called for an appointment and how many scheduled one (daily and monthly)
- Number of appointments made for family members when a primary appointment is made (daily and monthly)
- Number of patients from each referral source as a percentage of total new patients (daily and monthly)
- Internal referrals (target over 30%) (monthly)
- Broken/ canceled appointments with no future appointment calls (weekly and monthly)
- Continuing care calls (pre-scheduled and unscheduled) (weekly and monthly)
- Unscheduled treatment plan calls (weekly and monthly)
- Unscheduled cement crown calls (weekly and monthly)
- Completed root canals but no crowns (weekly and monthly)
- Completed S and RP but no maintenance appointment (weekly and monthly)
- Average production per hour (monthly)
- Treatment plan acceptance percentage (monthly)
- Hygiene pre-appointment percentage (monthly)
- Patients with future appointment percentage (monthly)
- Hygiene production (target three times their salary) (monthly)
In addition, it’s important to keep an eye on budget items to make sure your costs and revenues are in line. Here are some industry guidelines for budget KPIs:
- Rent, 5%
- Equipment, 5%
- Marketing, 3-10%
- Lab Costs, 6-8%
- Supplies, 5%
- Team (Including Taxes and Benefits), 20%
- Profit, 50-55%
Many dentists don’t know or even have access to many of these key metrics because they don’t get measured. By understanding these numbers, you can identify areas to focus your efforts to get the most out of your practice.
Inside of my practice, as well as all of the practices that we work with, I recommend Dental Intelligence to access these key metrics.
3. Decide how often you will monitor each KPI.
Once you know what to measure, decide how often to measure each of them. You can see how often I recommend you check each of the performance KPIs above. This helps you get a more detailed picture of how your practice is performing on each of them and allows you to start improving your performance right away.
For example, it is unnecessary to monitor completed root canals but no crowns on a daily basis, but important to follow up with patients to schedule crowns. Once a week is sufficient to keep on top of this key number and get patients in to complete their treatment.
4. Assign KPIs to appropriate team members.
Once you decide what to measure and how often to do so, it’s important to let your team know who will be responsible for measuring. This is important to establish clarity and assign each task to the appropriate person.
Let each person know which KPIs they will be responsible to measure so you know who is responsible for getting them done.
5. Create a KPI calendar and post it in key areas.
Once you have your KPIs assigned, ask each team member to make a list of the KPIs assigned to them and what days they will perform each task. Then combine them into a calendar format and post it for every staff member to see in a calendar format. This helps keep each person understand what they need to be doing each day and gives other staff members a list of tasks that need to be performed when another team member is out sick or on vacation.
What KPIs are you measuring in your practice?
Measuring key performance indicators is one of the best ways to unlock revenue and profit growth for your practice.
If you want help doing so, check out the team of expert coaches, training, and resources we offer in our signature Delivering WOW Platinum Mastermind Program.
You can also join my free Dental Marketing and Profits Facebook group, where thousands of dentists and I help each other build better practices.