The world has transformed. The rules have changed and are in constant flux. Our cultures psychology has thus destabilized which leads to defensive thinking and bunker mentality. This in some ways profoundly affects our market position and viability. What should we as chiropractors do?
In my 25 years as a chiropractor, business consultant to chiropractors, and former CEO of Chiropractic Leadership Alliance (CLA), I have seen many challenges dealt to the field of chiropractic and have been very accurate in strategic recommendations that have helped DC’s face these challenges and thrive. In order to figure out what to ‘do’, we have to understand what is happening. Let’s talk about the economy…
The headlines sound threatening. Unemployment is rising. There is talk of super-inflation in the near future. The stimulus spending doesn’t seem to be working. The stock market has pulled way back. Real estate values have dropped. Need I go on? Prevailing wisdom says hunker down, tighten your belts, squeeze everything, play defense and hope for the best…ride the storm out – right? Wrong. Dead wrong!
Even with the severity of the current economic downturn, there is still an enormous amount of wealth in the households of this nation and every day some of it will be spent somewhere and a lot of it will be spent on health related services. This year there will be around $3.1 trillion spent in the USA alone for ‘healthcare (most of which is really ‘sick care’). Over $500 billion will be spent on wellness related products and services. There is still a lot of ‘economy’ for what you do. While doing some research relative to what is happening in the world economically, I came across something that should be very interesting to you. You probably have heard of McKinsey – the worlds #1 business consulting firm. McKinsey and Company is a top level consultant to many of the most influential businesses and institutions in the world. They serve more than 70 percent of Fortune Magazine’s most admired list of companies. In essence, when they talk, the major businesses of the world listen. A while back I read a white paper they put out analyzing what happened to varying industries during the last 2 economic downturns. The results were revealing. Overall, consumer spending decreased 10%; which is significant. Categories like ‘transportation’ and ‘food away from home’ saw the most significant decreases in consumer expenditures. However, during these periods of economic downturn, there were 5 sectors that actually saw growth through increased consumer spending. Guess what one of those sectors was? Yup, healthcare. Consumer expenditures in the healthcare sector rose by an average of 29%! I am not surprised by this data and perhaps you aren’t either.
So, what are the choices to the DC in these troubled times? Either retrograde retreat and hold on for dear life – or – get very aggressive and go after profitable growth. I obviously advocate the latter. There is opportunity in all crises. Today is no exception. Shrinking is a bad idea. You can’t score points on defense. Time for a gut check.
In examining the attributes of Circle of Docs members that are thriving right now, I found that they have positioned themselves to attract people to their services because these services speak to and help consumers cope with the stresses they are experiencing. They have made themselves “market-ready” and are going after the market and capturing more of it every day. It is critical that every DC understands what it is to be ‘market-ready’. In tough economic climates, mediocre practices just die. So, what does it mean to be market-ready?
First, it means crystal clarity of the objective. In other words, what is the clear purpose of your practice? What is the clear goal you have for every patient that comes through your door? Where do you want you practice to be in 5 years? Have you set up practice procedures that are consistent with these clear goals and objectives? What do you do day 1 and day 2 with new patients? What is your marketing plan? How do you budget it? How do you measure its results? What are your patient education strategies? How robust are all these systems and considerations? I could go on, but I think you get the idea. Succeeding in chiropractic practice can be very tough. Being in the market place today without being market-ready is close to business suicide.
An objective I have is to see the chiropractic profession grow through what is happening now because in stressful times, the need of chiropractic services to preserve health and well-being escalates. Let me add some critical context here. In times of heavy stress (like we have today), do the people of your community need your services more or less? I find too many DC’s react to the circumstance by worrying about what’s going to happen to them.
[quote_center]Doctor, the purpose of your practice is not about you…it is about the people in your community! [/quote_center]
Your income and success is an effect of that purpose, not a cause. If you reverse cause and effect here, you are in for trouble. With today’s stresses, the people of your community have an increased need for care. People are so stressed by what is happening it makes them sick. For example, many are having trouble sleeping. Their choice is to go into the allopathic system and get a prescription for sleeping medication or to come to you to help dissipate their stress naturally. Taking drugs to sleep! What can be more natural than sleeping??? Taking sleeping medication doesn’t solve the problem; it just replaces it with another problem. I think you get the idea.
But what about the ability for people to pay for chiropractic in this down economy? Let’s discuss that starting with unemployment. In 2007, unemployment tracked around 4.7 percent. As a macroeconomic indicator, whenever it is under 5%, that is a good sign. Now, it is heading toward 9 or 10 percent – and perhaps even more. Macroeconomically, this is really bad. However, what does it mean from your context. Currently, if I were to be generous, chiropractors are seeing about 1 to 1.5 percent of the population on an active basis. I know you hear higher numbers, but just do the math. As you read this, this is the number of people who have an appointment scheduled to visit a chiropractor. Hence, over 98% of the population doesn’t have an appointment to see you right now and yet most are candidates who would benefit from care.
Even if we were to presume that people who were laid off from work aren’t financially viable for care (which is a faulty presumption – many got great severance packages and benefits, etc.) that means that out of the over 98% that were not already booked for an appointment in a DC’s office ‘pre-meltdown’, the audience is now down to 93%. And if you want to take out the folks that were already unemployed before the economic meltdown, you are down to 88%. The vast majority of people in your community who are not receiving care, are employed and will greatly benefit from your services.
Further, think about where the economic meltdown has hit people. The stock market has pulled back significantly. I feel it. I have money in the market. But before the economic downturn, did people come to you and say, “Hey doc, I sold some stock today. Thought I would buy an adjustment.”? Real estate values have fallen quite a bit. I get it. I own personal and investment properties. But again, did folks come to you before this economic mess and say, “Doc, I just sold my home so now I can come get adjusted.”? For the most part, people came to you and paid for services with discretionary income from their paychecks. The vast majority still have those same paychecks. In the context of this economy and your negligible market share, matched to the expanded need for chiropractic services and the fact that healthcare spending goes up during economic downturns, you have huge opportunity!
The one thing that you must overcome however is the mindset of the consumer. They may have the same paycheck and the same cash flow in most cases, but they feel much less wealthy. Your strategy for marketing must emphasize tactics to breakthrough this ‘broke’ mindset and get people to invest in your services. If you do this, you are in for the best years of your career. A big key is instituting some high-impact, low cost marketing strategies. I don’t have enough space here, but perhaps I can expand on these in a future article.
- On a marco level, our economy is in a pretty bad place.
- Historically, healthcare expenditures go up in down economies.
- People have an escalated need for chiropractic care.
- People pay for chiropractic services from cash flow, not balance sheet items like stock or real estate holdings. That cash flow for most is unchanged.
- Now is the time to get aggressive and go out into your community with high impact, low cost marketing.
Recently, I interviewed a Circle of Docs members that is a young DC who opened a new practice 6 months ago in the midst of this bad economy. After 6 months he has a patient volume of 250 visits per week. His practice is 100% cash – meaning he does not accept assignment from 3rd parties as a part of his economic model for the practice. Why would this be his experience when so many other DC’s are struggling so hard? The answer is easy. It is because he fully understands everything I had written above. Many of you reading this are just 2 clicks away from great breakthroughs in your practice. Take a step back. Empty your head of all the negativity it has absorbed these past months. Create a crystal clear vision of helping the people of your community. Don’t be a part of the problem; be the solution. Only dead fish swim with the current. Be bold and swim upstream.
–Dr. Patrick Gentempo