Published - September 2006
FROM THE ROAD
By Dave Jakielo
HONEY I SHRUNK THE COMPANY!
Risk Management: Market or Perish
This year I have visited or heard from numerous companies who have had the unfortunate experience of receiving the dreaded “cancellation” letter from a long time loyal and very profitable customer.
Cancellation wasn’t because the client was unhappy with the company’s performance, nor was the client leaving to obtain a better price. However, with the state of healthcare today, “stuff happens.” Unless you constantly fill your pipeline with potential new clients, you are putting your company and your team members at great risk.
When I was running a billing company earlier in my career, I remember the hardest cancellation letter to receive was one from a client for whom we knew we were doing an outstanding job. Not that any cancellation is enjoyable, but it’s justifiable if your performance is sub par. But when you’re serving the client well, cancellation is a k.o. punch.
I have been examining and tabulating the reasons why long time loyal customers exit from the firms that have served them so well in the past. Here are the most common reasons:
- A practice merges with a larger practice and the client is forced to use the acquiring practice’s billing firm.
- The hospital where your client practices goes out of business. Think it can’t happen? In Pennsylvania alone, 13 acute care hospitals have closed since 2000.
- Your client decides to “pass the torch.” In other words, the long time president of the group relinquishes the reins. The younger group member is now in charge decides to select his or her own billing company.
None of these reasons involves a lapse on the part of the billing company. But given that these scenarios will continue to happen in the future, all billing companies should take steps to ensure long term viability.
Here are some strategies to ensure that your next career move doesn’t include remembering to ask your customers, “Would you like fries with that order?”
- Broaden your client base so that no one client makes up more than 10 to 15 percent of your company’s total revenue.
- Dedicate a minimum of 20 percent of your time to marketing efforts.
- Get to know every member in the group of your current clients. If meeting every member is impossible, at least develop a relationship with each board member. Someone once asked me if he really needed to get to know all the board members of all his clients? I responded, “No just the ones you want to keep.”
- Identify practices with whom your current clients could potentially merge. Start marketing to them now to possibly recruit them as clients or at least raise their awareness of your company as a player in the billing arena.
- Build a pipeline of potential clients and keep in touch with them at least quarterly.
Another factor that can land a company in crisis is when owners spend too much time working in their respective companies instead of working on them.
As an owner, your value isn’t in how fast you can key charges or how well you can memorize the CPT and ICD-9 books. No, your value lies in your ability to network and grow your company. Networking isn’t something we do when we have the time. It is something we need to make time for and do all of the time.
The best time to find new clients or employees is when you don’t need them. Slow consistent growth is one definition of a healthy and viable company. If you wait until you desperately need a new client or employee, that is when you usually make a hasty or incorrect decision.
In the past you may have coasted along, servicing your current clients from year to year with a sense of security. You may have felt they would never leave because of the excellent service you have always provided. However, the world has changed, and you can see from the examples above that good companies lose good clients for no good reason.
Protect the asset you have painstaking built over the years and continually market and network. Remember losing a client can be a minor inconvenience—or it could be the biggest disaster in your career.
Sign up for my FREE weekly success tips at www.DavidJakielo.com, and if you have any questions or comments about this column you can contact me at Seminars & Consulting, 86 Hall Avenue, Pittsburgh PA 15205 or at 412-921-0976 or via e-mail at Dave@DavidJakielo.com. You can sign up for his FREE weekly Success Tips at www.Davespeaks.com.