Numbers don’t lie. A fact I am reminded of every time I step on the scale. Those ten little digits twixt naught and nine are our friends. And, like any good friend, we may not always like what they say, but they always tell us the truth.
I haven’t always been friends with data. Both of my parents are math teachers, but I only took one math course in college. I answered one question on the final, wrong by the way, the Professor gave me a “C” as a favor and asked me not to retake the course. He didn’t ever want to see me again. The feeling was mutual.
I didn’t come to love business math until I owned a business. That’s how it goes with learning. It very often comes late and not nearly as swift as would be most helpful. The isolation of the independent meant that industry benchmarks and quantitative comparisons reached me as a trickle. By the time I found a new way to evaluate my performance, the opportunity had been living in my business for too many years.
How do we use data, and numbers, to identify opportunities in the independent before the opportunity becomes a problem? Start by looking at where you are today. We won’t know what data is important to us until we know what data is available to us.
Inventory -- Display Capacity – Understock -- Annual Frame Sales -- Turn Rate -- Per Patient Revenue -- Frame Capture Rate -- AR% -- New Patient Ratio -- Patient-Owned Frame % -- $200+ Frames Sold List % -- Eyewear % of Gross Revenue -- 3rd Party Collections / Exam -- 3rd Party Optical Rev / Exam -- 3rd Party % of New Patient Exams -- Total Revenue by day of the week -- Rev / Exam by day of the week -- Optical Rev / Exam by day of the week --- not to mention the important things like Gross Revenue – COGS – Labor -- Net Revenue – and Net Profit!
Phew. Right?! And that’s just looking at your practice. Then, we have to benchmark ourselves by size, by region, and nationally.
Once you know where you are today, there are two ways, okay three, to go about attacking change in these metrics.
Identify our key performance indicators, those metrics we believe are under-performing, and we believe could lead to an exponentially larger ROI if they were to improve. Have everyone in the practice start working on those metrics at the same time. Growth is, after all, a group effort, and moves most quickly when everyone is swimming in the same direction. When things do improve, celebrate as a team, creating culture as well as profits.
The “every man for himself” policy, but not nearly as harsh as it sounds. With this approach, we allow the team to work on individual metrics independently. Let each person choose what interests them most, and what they believe they can affect. Allow each person to “own” the success or failure of that piece of the business. Time and time again, ownership of the outcome has been a proven driving factor for engagement. Have the team report back the learnings from things they’ve tried to educate the rest of the practice. This is a habit that is foreign to the vast majority of people, but the theory goes, you really know it when you can teach it.
That’s when you just down give a damn anymore. Confronted with the myriad ways we need to improve, it is easy to throw in the towel and not change anything. Conversely, we can also gather a staff meeting, when we probably haven’t had one in years, and shout down from our high horse, things need to improve! The implication being you, as a Manager, are not happy, and everyone is going to lose their jobs. Hardly an atmosphere that breeds success wouldn’t you say?
It doesn’t matter which approach you choose, things will change. You will come to love or loath math and the metrics it represents, or you will ignore it entirely. Things will either improve, or get worse, but over time things will change whether we focus on them or not. By focusing on our 10 little friends, we find that the pace and the trajectory of change is firmly in our control. The difference between the Activist and the Eff-thist will be whether you deserve to be profitable, or your patients are doing you a favor.
If you’ve been in practice for any amount of time, you’ll deserve a “C” in something. So, will you take the class again with a different instructor, or give up entirely? That’s where IDOC and Optical Consulting can help.
I’ve seen the data, so if you need me, I’ll be at the gym, torturing my abs instead of my metaphors.