Growing a hearing care practice isn’t as direct as simply getting more people through the door.
The keys to growth are different for every practice. In fact, for some practices, driving more prospects through the door might stifle growth.
You might be wondering, then — “How can my practice grow if I don’t know what growth looks like in my situation?”
Introducing KPIs and Benchmarks
Key performance indicator
Key performance indicators (KPIs) are measurements — but not just any measurements. KPIs are metrics that best help you understand the health of your business and how close you are to meeting your goals.
Let’s consider your personal health as an example. When you feel a little icky, you pop a thermometer in your mouth. That’s because you know your body’s temperature is an important measurement in this situation — it’s a KPI.
But measuring KPIs only gets you so far. That’s where benchmarks come in.
Benchmarks are a point of reference or comparison. They can be as complex or simple as you need them to be. Comparing your KPIs to benchmarks tells you where adjustments are needed to stay on track to meet your goals.
Let’s continue the example from above. The standard benchmark when taking your temperature is 98.6 degrees Fahrenheit. You take your temperature, and it’s 99.3 degrees. No wonder you feel yucky — your KPI is high compared to the benchmark.
A simple hearing care example
You’ve decided average selling price (ASP) is a KPI you want to track. The ASP is your gross hearing aid revenue divided by the total units sold.
Now where to go for a benchmark? There are many sources you can seek out for this data — whitepapers, buying groups, OMS vendors, even hearing aid manufacturers. The key is that you choose a benchmark derived from practices similar to yours in size. Let’s suppose you arrive at an ASP benchmark of $2,700–$2,800.
You track your ASP month to month and compare it to the benchmark. For the first three months, you find:
- Month 1 = $2,300
- Month 2 = $2,100
- Month 3 = $2,000
At a glance, you can see your ASP is nowhere near the benchmark and is only getting farther away each month.
Low ASP can drag down revenue — it’s time to look at the different factors that affect your ASP and make changes accordingly, so you can meet your goals without burning out your team.
Get the right data and support you need to focus your efforts and accomplish your practice goals.
KPIs for Hearing Care Practices
Hearing aid units sold
This one is obvious. But you should also track the binaural rate, ASP, and number of returns as well. Dial in further and ensure you have these numbers for the whole practice, each location, and each provider.
Every practice has an ideal mix of private-pay patients and third-party contract patients. Tracking patient mix ensures you maintain that balance — it’s all too easy to get overrun by fitting-fee contract patients. Your patient load climbs as your revenue plunges.
This one is crucial. It’s the percentage of viable opportunities that were converted into sales. The better the conversion percentage, the less imperative it is to keep a steady stream of prospects.
This is closely tied to conversions. It’s a ratio that tells how good each provider, location, or the whole practice is at converting a viable opportunity into a sale.
These KPIs — one for inbound calls, one for outbound calls — indicate how effective each member of your front-office staff is at turning viable prospect calls into scheduled appointments.
This indicates how many units your practice needs to sell to cover your cost of goods sold and operating expenses in order to remain profitable.
Track your net revenue, but also break it down into percentages by cost of goods sold, operating expenses, profit, and owner’s discretionary earnings.
This is a “greatest hits” list of KPIs — your practice might have additional ones that make sense for unique situations. But the ones above make sense whether you’re a private-practice audiologist or a clinic in a multi-specialty practice.
Using Your KPI Data
So, back to that question from the beginning: “How can my practice grow if I don’t know what growth looks like in my situation?” After a few months of tracking your KPIs and comparing to benchmarks, it will become clear which KPIs seem to be related strongly to how your practice is performing.
For example, in the hearing care scenario above, the ASP was veering away from its benchmark. As a result, revenue was probably decreasing as well. In this case, you would consider which factors have changed lately that might affect your ASP.
Suppose you have a new third-party contract — check your patient mix KPI. Does it show you have a lot of third-party patients now? This would have a strong impact on your ASP if you’re used to the revenue that comes from private-pay patients!
From here, it would be a matter of taking steps to ensure you have the right balance of private-pay and third-party opportunities on the schedule.
Ways to Track Your KPIs
You could dust off your trusty pad and pencil and grind these out by hand — which certainly has a certain Dickensian charm — or you could dive deep into your database program of choice and start churning out functions and pivot tables.
But there are now dashboards you can use that organize your data into understandable-at-a-glance dials and charts. Your KPIs are organized in a way that make sense, so you can proactively make decisions based on real-time KPI performance. Compatibility with a given OMS is different from platform to platform, but there is sure to be one out there compatible with yours.