Do You Know How to Use Your Metrics?

In the article “Why Focus on Marketing Last,” I determined the compounding growth power of improving your efficiencies. I was now on a mission to begin systematically finding ways to improve our metrics in each area of our practice, but I faced one major challenge. We essentially didn’t have any data to analyze. 

In 2012, our practice management software could tell us about our revenue collections, production and number of contracts entered into our system. That was basically it. Some third-party analytics companies were just starting to be created as add-ons to our software. I realized that before I could improve our metrics to increase our efficiency, I first had to design our own data tracking systems to determine what our actual numbers even were. I spent a few months designing an analytics tracking system in spreadsheets to allow our front desk employees to enter in the data from new patient consultations and the formulas would calculate the metrics for us. Once the spreadsheets were completed, I paid my top two front desk employees who had the highest attention to detail $100 extra per month to fill out the spreadsheets each day. It was a big win for all of us. I now had a custom designed system to give me the precise metrics that I valued most and two of our employees each received a $1200 raise. I would much rather have the cost go to our employees instead of a third party company.

During the process of designing our tracking systems, I rented the newly-released movie Moneyball starring Brad Pitt. This movie tells the story of the Oakland A’s baseball general manager Billy Beane who took a very unconventional approach to create a championship-level baseball team while having one of the smallest budgets in baseball. Billy Beane had to find talent that other teams did not recognize only to then have the wealthier teams buy away his best players once they became stars. Beane chose to focus on applying a new perspective on baseball analytics to build a team of undervalued, unconventional players whose metrics actually produced the sum of the parts needed to win enough games to reach the playoffs. A simplified explanation is that while most teams focused on a player's batting average, Beane focused on one's ability to get on base. Beane did not care how you got on base. A walk can be just as effective as a single. Beane determined how many runs he believed that his team needed to score and how many runs his team could afford to give up over the course of a season. He then determined which metrics he believed most effectively generated those results and reverse-engineered a team of players who could collectively average those results. 

I was blown away by this concept and immediately tried to figure out how I could recreate this in my practice. One of my biggest takeaways was noticing that while Billy Beane implemented this new plan, the real success did not occur until every member of the team learned how they can individually improve their metrics in a way that leads to the team goal. For example, the players had to learn how to better earn a walk instead of trying to swing to hit for a single.

Most of the consultants and industry leaders were primarily only focusing on big company metrics at the time. This primarily included areas such as revenue, production and number of new patients.  Practices simply set big picture company goals, such as reaching $100K in new contracts, and passed the same goal to the entire team. My practice was doing something similar when I joined the team. I was never a fan of simply providing only one big company goal to the team. Our staff would continually complain to me about this type of goal because many of them felt like a production goal was not within their control. Our assistants would say that it is out of their control as to whether or not the treatment coordinator closes the sale. I would pointlessly try to explain how each employee has an impact on us reaching this production goal but my response was too big-picture to ever resonate. 

So I decided to take Billy Beane’s approach. I started with our big company-wide goals for production and reversed-engineered the process to determine what metrics truly mattered in helping us reach our goals. Then I assigned a customized metric to each department that helped us reach our big picture but also was completely within the control of that employee. I just had to put in the work to determine the value of improving these less traditional metrics. Using our call center as an example, we had them focus on our phone answer rate and new patient show rate. All of the call center employees knew they could impact the outcome of these results. I just had to figure out the value of a better phone answer rate and improved new patient show rate. For the phone answer rate, I calculated the total number of new patients scheduled during the month and number of total calls answered. This allowed me to determine that 1 out of 10 phone calls was a new patient. If we could answer an additional 100 missed calls during the month, then we would most likely schedule another 10 new patients that would ultimately result in 4-5 additional signed contracts. Now you have a value that for every 100 less missed phone calls you will now earn around $20,000 in extra production that month. And you apply a similar calculation for additional new patients that were derived from improving your confirmation system and getting them to show up for their appointment.

But the true impact of creating unique metrics for each department came when we started teaching our team members how they can each individually improve their metrics. Before, we had one big company goal and basically none of our employees felt that they could make a direct impact on the company reaching the goal. Now we have almost 10 unique metrics that all help us reach our goal. We shared each of these metrics daily with all departments during our morning huddle and they were on display in our break room. As we began to help teach each department ways to improve their metrics, our employees also found additional ways to increase results. While we provided phone reporting analytics to our call center to learn when we were missing calls to help adjust when our team takes their breaks to be able to answer more calls, a call center employee came up with two different ways to handle calls when a patient is asking for directions. The first solution was to provide a detailed map to the office in our new patient packet. This helped prevent phone calls from even occurring. The other solution was to have a prepped email that we could send to patients while on the phone asking for directions. This solution cut down on the length of the phone call which also freed up more time to answer additional phone calls. Now we could all work together on achieving this goal. Another major impact of focusing on the more localized metrics is that if you could just improve each metric just 1-2% then the compounding growth of that small improvement in 10 areas likely adds up to around 10% growth. Teams will almost always outperform an individual. You just need to discover how to build a system that teaches each team member how she specifically can contribute to reach the goal.