You’re special; your problems aren’t

If your immediate response to receiving any feedback about your business, or being asked a clarification question for why you do things the way you do them is…

“but you don’t understand…”

This article is for you. 

Integrative medicine professionals are special. We enter the field because of a deep desire to offer choice to patients. We have made patient centred care the central pillar of what we do. We are often outside the red tape of conventional medical systems allowing us to be creative with our visit timing, cadence, pricing, packaging and messaging. 

We feel special, and we are. 

But the fundamentals of business aren’t special. They are all the same. 

Whether you like stinging nettle tea or not. 

The uniqueness of Naturopathic or Integarive health care businesses is in your particular flavour of health care you provide and in the way you allow your creativity and philosophy of medicine shine through. 

But whether someone sells original artwork or 747 airplanes, the basics of business still apply. And sometimes practitioners feel their business is SO unique and SO one of a kind, that the basics of business need not apply. 

And to be honest, it gets us into trouble. 

Your business isn’t special. You are. 

When I start working with a health care buisness owner, we dig into the boring metrics that every business owner needs to understand. In the rest of this article, I’m going to share why your unique health care business snowflake still needs these principles, and where to find the numbers if you’ve never looked at them before. 

Number of New Leads Per Month

This is the very top of the funnel that brings people into your ecosystem and business. If you know you need 20 new patients in a month, but only invited 4, the math would be really clear that you needed to talk to more people. The challenge with the top of funnel lead generation is that most clinicians cant quantify how many people learned about their business in the previous month. They can’t tell me how many people they talked to. They can’t tell me which of their channels yield the greatest number of new leads. 

Most clinicians thow lead-gen spaghetti at the wall and a few new patients or clients come out the others side. 

This number isn’t the number of social media “likes” or the number of people who reply “BLOG” on your Instagram stories. This number represents the number of people who have “opted-in” to learning more from you. They have raised their digital or real hand and asked to hear more from you. 

This number might look like: 

People who attended your webinar + people who inquired about beginning a new patient + people who downloaded your free lead magnet. 

Each of these people, while “unconverted” for the time being, have entered your business ecosystem to learn more about you and your business. 

Most clinicians can’t tell me how many people this is each month. If you need 20 new patients per month and historically 20% of your qualified leads become patients, you need approximately 100 qualified leads entering your ecosystem each month.

The Number of Conversions 

If I ask business owners how many new clients they had last month and the month before, they usually answer with a range. 

They have no idea if it was 8 or 11 so they say “between 8 and 11.” 

The actual number of new clients is incredibly important. It shows you trends (was this month 9 and last month 15?) It teaches you how confident your admin are in talking about pricing or other parts of your offer. If your admin team's conversion rate suddenly drops, I'd record a few calls and listen back. 

The number becomes even more useful when you compare it to your leads. If 100 qualified people enter your ecosystem and 20 become patients, your conversion rate is 20%. If next month 100 people enter and only 10 become patients, you don't necessarily have a marketing problem. You have a conversion problem.

If any other business had no idea how many clients they had last month we’d tell them to run not walk to their accounting data. It’s the same for you. 

Cost per Aquisition 

The cost per acquisition (or customer acquisition cost/CAC) in its simplest terms, is the total marketing spend of the month for your business, divided by the number of new clients you landed. If your answer is zero, (because you don’t spend money on marketing) there are a few things to consider beyond the scope of this article. Founders and business owners who don’t pay for marketing typically pay with their time. Business owners who are frustrated with their top line growth but only depend on organic marketing are destined to stay frustrated. If you knew you could reliably spend $50 to make $300, how many times would you make that trade?

That's what understanding acquisition cost begins to tell you.

The big question here is whether or not you know the number at all. Knowing your CAC can help you understand your marketing budget, and what growth would cost if you were to invest in it. 

Lifetime Value

How many clients stay and how long do they stay for? This number is vital to the long term health of any business, when the service provided can be repeated (or should be) over and over. Clients are valuable beyond a single interaction with the business, and the delivery model of your business can greatly influence how long one person stays with you and how often they purchase services or other goods from you. If the lifetime value of a client is $3,000 and it reliably costs $40 to acquire them, suddenly $40 doesn't feel expensive. It becomes a growth lever you'd want to understand very well.

When health business owners don’t know their lifetime value, and we tell them each converted client costs $40, they can’t contextualize marketing spend, and end up in a shortsighted game of trying to grow without support. Lifetime value can also point towards messaging gaps, especially when the care or service should be consumed multiple times in a person’s health and wellness journey.If a clinician offers a service designed to involve ongoing care but lifetime value is unexpectedly low, that's a diagnostic clue. People aren't continuing to purchase as expected, and now we can investigate why. Is it the messaging, care model, pricing, patient experience or are clients lost during follow-up?

Margins and the Cost of Delivery

If only the $3,000 lifetime value of a client went directly into our bank accounts.

The cost of delivering care is another frequently overlooked metric. Practitioner compensation, administration time, supplies and materials, technology, rent and physical space all consume some of the revenue a client generates. A client who generates $3,000 in lifetime revenue but requires $2,800 in resources to deliver that care isn't necessarily a great client or a sustainable business model.

Revenue tells you how much money moved through the business. Margin tells you how much of it the business actually got to keep.

This becomes especially important as healthcare businesses grow. More patients and more revenue don't necessarily create more profit if the cost of delivering each additional unit of care grows alongside them. Understanding your margins helps you determine whether growth is actually making the business healthier or is just making it busier. Getting clear on your margins helps you understand which resources go down in cost with growth, and which grow linearly (or worse, exponentially) as growth continues. 

The foundations don’t change. 

Whether you offer menopause care or pediatrics, provide acupuncture or IVs, the uniqueness with which you practice can’t compensate for the basic metrics that create the practice sustainability and profitability you desire.

Think of these numbers as diagnostics for your business.

Each number can highlight the most important lever to pull next to achieve your goals. If you have an enormous number of leads per month and too few new clients, conversions need to be examined. If you have a lot of new clients per month, but it feels like a revolving door, examining your lifetime value can help you understand why people don’t stick around. Your cost per acquisition can give you marketing-budget peace when combined with a strong lifetime value. 

The numbers don't make decisions for you. They tell you where to look.

Your medicine can be unconventional. Your math can't be.