April 30, 2019

Determining The ROI Of Your Marketing Efforts - Part I with Steve Stalzer of 8150 Advisors

PTO 48 | Marketing ROI

 

One of the primary concerns of many private practice owners is acquiring new patients. Breaking down all the process and costs that entails, Steve Stalzer, co-founder of 8150 Advisors, is back to help us as he finishes off this two-part interview on growing your own private practice. This time, Steve shares the ROIs of marketing - how to easily break down the monetary efficiency of our marketing efforts and what it actually costs to procure a new patient. This may take a bit of work, but Steve makes it all easy as he guides us with gathering the data and going through the assessments needed for the least amount of cost that can produce more patients. Grow your practice strategically and systematically. Follow Steve while he talks about having a solid foundation of established P&Ps, leadership, and finances of a company.

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Listen to the podcast here:

Determining The ROI Of Your Marketing Efforts - Part I with Steve Stalzer of 8150 Advisors

My guest is Steve Stalzer. I had part two of my interview with Steve that came out and you might be saying, “Where's part one?” This is it. This is part one of my interview with Steve. I had some technical difficulties and so now we're releasing part one after part two. Nonetheless, I'm excited to have Steve on for both episodes and thankful for his willingness to do so. He is the Cofounder of 8150 Advisors, a PT consulting and coaching firm out of Vail, Colorado. He graduated from PT school at the University of South Dakota back in 1997. He eventually joined Proaxis Therapy in Vail in 2001 and eventually grew with the other owners, the four clinics that they had into 35 clinics across four states with a staff of over 200.

They did that through a combination of acquisitions, openings, freestanding clinics and also forming several health system partnerships with hospitals. They actually pioneered one of the earliest and largest sports and orthopedic residency programs in the United States where they hosted ten residents a year between Colorado and South Carolina. He has begun consulting with practice owners shortly after selling Proaxis Therapy in 2015, where they focus on growth, efficiency and succession planning. He also has degrees in organizational psychology, physical therapy and an MBA from the University of Colorado. I'm excited to bring on Steve because I noticed as articles and his presentations through Impact Magazine and PPS Conference. He did one about the ROI’s of marketing. It’s something that I don't think a lot of us as owners really consider is how much it costs for us to acquire new patients per patient. Also, what are we getting back in terms of what we're spending on our marketing budget?

We should nail these things down. It will take a little bit of work, but Steve makes it really easy. If we do that and use those simple formulas, we can then focus our money into those areas which are going to provide us greater patients for the least amount of cost, especially into opportunities that can produce more patients. We cover a few things. The thing I'm excited about as you can use this data then to strategically grow your practice by funneling more of the marketing money to more efficient and more effective marketing programs. Also, to help you grow your practices, either the one that you're in or now you have a pattern for developing a new practice. It’s great stuff. Let's get to the interview with Steve Stalzer.

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This is part one of my discussion with Steve Stalzer of 8150 Advisors out of Vail, Colorado. Thanks again for coming with me, Steve. I apologize again for technical difficulties, but part two happened and now we're back to part one where we started. Thanks for coming.

Thanks for having me on.

I'm excited to bring you on and I don't think I shared this, but I saw a couple of articles that you've done in Impact magazine for PPS. This one in particular that we're going to talk about is in regards to strategic growth and specifically how to determine the ROI of our marketing efforts in order to determine our strategic growth patterns. I was interested in your article, so I reached out to you and you were kind enough to respond and finally were able to schedule this. Before we get into that a little bit, would you share your professional experience and what got you to the point where you are now?

I joined a private practice that I started buying into and was the bulk of my career back in 2001. I had practiced for about four or five years in a few different settings prior to that. I joined a group in Vail, Colorado. At the time we had four clinics and about a dozen therapists. It was three partners and myself. We were very opportunistic about growth. It was a great group. We had a phenomenal staff. We had some good physician relationships. Looking back on that stage, we grew as a result of taking advantage of the opportunities that were presented to us. It was opening new clinics when something arose or someone brought it to us or taking advantage of a marketing initiative because we picked up a flyer or a local agency came and talked to us. At the time, we had the four clinics and they were part of a hospital MSA.

One of the things that we were blessed with was at the time, Sean McEnroe and myself, we were probably about 30 at that time, but our founding partners were in their 60s. We were forced to a pretty early stage to look at succession planning and look at the value of our practice so that as those guys retired and exited, they could have the exit they wanted. We could continue to build the practice that we wanted too. That was critical for us because as we started to look at the value of our practice, it helped us focus on not just growing the revenue or even the profitability, but looking at what contributed to value, things like referral diversity, pair diversity and our position within the market. We eventually grew it to about 35 clinics. We have clinics in Colorado, the Carolinas and Georgia. A combination of some MSAs, a couple of joint ventures and quite a few freestanding clinics. We sold that in 2015 and started consulting shortly after that as an opportunity to share what I learned along the way, both mistakes and things that went well. It’s to help other owners hopefully build value in their practice at a faster rate than maybe what we did in some of our years.

PTO 48 | Marketing ROI
Marketing ROI: There are two things that often limit growth - your ability to recruit great staff and your ability to market and spread the word about what you're doing to generate more new patients.

 

You mentioned the diversity of referrals. In a small town like Vail, you leaned on a few number of referral resources to get those new patients in the door. I know we've talked about it a little bit on the importance of referral diversity. What did you see at that time that allowed you to maybe step back and say, “In order to improve the value of our company, this is what we need to do in terms of referral diversity?”

There are probably two things early on. One was we had a phenomenal relationship with an orthopedic group that did a lot of destination orthopedics. A lot of patients flew in. They would have surgery and stay for a week or two as well as the ski industry. Vail is unique. It's an anomaly in terms of the typical market that you would see in a town that size. In the mid-2000s, 80% of our referrals were coming from one orthopedic group. We were forced to look at that and how we diversify. The other part was we had a service agreement with a hospital in Vail. Most service agreements will have a 90 to 120 day out and therefore that can impact value when you're looking to exit the practice. That demonstrates a lot of transitional risk for a new buyer coming in. Those were two things that we are forced to look at pretty early. They were helpful in helping us understand that as we grew, we needed to address those things. Not just grow those areas but, address referral diversity and address the risk associated with the MSA at the same time.

When you were with the four clinics and then gradually expanding and growing and taking on more clinics, I'm sure you had to feel like you were a little stretched thin in terms of maintaining physician relationships and creating new relationships. You eventually had to turn that over to a marketing person in essence. Tell me a little bit about that.

As most owners at that stage, in particular, the two things that often limit growth are your ability to recruit great staff and your ability to market and spread the word about what you're doing to generate more new patients. Like most owners, we had a hard time giving those up thinking if those are the two most important things that were driving our practice, we needed to focus on those as owners. Two of the early positions that we hired, one was a recruiter. Her background was in HR and she was a solid recruiter. She streamlined that process for us. What we found was she made it much more efficient and we could focus on building the practice, training therapists, working on clinic director development. That was a key position.

We added a director of marketing/practice liaison and charged that team on it. We quickly grew that into a team with not just growing the referrals, but also diversifying referrals for us. We continued to maintain the relationships with the orthopods, but they're building relationships with family practice doctors and internal med. We found something very similar where they were actually more effective than we would have been because it was something we did at the end of the day or the end of the week when we had time versus it’s something that they did Monday to Friday, from sunup to sundown.

Market on the things that are growing and have growth trends. Click To Tweet

Emily Bagby who was one of our practices on for a long time and she does some work with us. It's been fun to help her and share that knowledge with other owners. We did a good job with physician relationships. We had that relationship started with a doctor but in terms of reaching out to new doctors and saying, “Give us a chance. Here's what we're doing now,” but also asking that doctor, “What can we do better to meet your needs?” We found that there were some people that were phenomenal at that and often, they weren't clinicians. That was a big part of building our practice as well.

I don't want to go down that road too far, but you had to have some mistakes along the way in hiring that right person to be your physician liaison. What advice can you give us?

At some point, we should definitely get Emily or Madison on to talk about that more. They were part of a talk that I did it at PPS on strategic growth. It was great to see the volume of questions that people had for those guys afterwards. It was the one position that we used a personality profile to hire. We didn't use that on therapists or on clinic directors, but we actually used Asher APQ, and it assesses outside sales aptitude. It's probably one of the larger assessments, especially in the sales industry.

What we found was we needed somebody that had a unique combination of confidence, humility and confidence to go talk to that new doctor person that they hadn't met and built that relationship. It’s a relationship-focused position, but also humility. Doctors don't always want to be told what they should do. They don't always receive it well if you're there to “educate them.” It was a position that we did have some trial and error and finding the right people, but when we did find that right person, it was like, “This is what we were looking for.” It was a matter of replicating that. That assessment definitely helped us find those right people in the future as well.

It's interesting because you shared with me the story that you presented at PPS about strategic growth, but anyone hardly came up to you and your friend other than say, “Thank you.” There was a line of people coming into to talk to Emily and what she presented on in terms of strategic growth.

PTO 48 | Marketing ROI
Marketing ROI: Growing your practice without a solid foundation is no different than trying to build another level on your house when the foundation is falling apart.

 

Kudos to her for touching on a topic and it didn't surprise me. We were talking about things that are very intuitive, but maybe owners haven't thought about them the way we presented them. It was pretty straightforward, whereas Emily was the third in line to talk, so she probably didn't have as much time. It touched on the fact that most owners are not natural born salespeople. It’s not just looking at what should those conversations look like and who should we hire, but how do we give that person the right amount of support and training and help develop their rotation.

What should that rotation look like? It's an area that probably a lot of practices have an opportunity to improve upon. There's a lot of PL’s out there. Emily has stayed very busy helping to coach them with a goal of optimizing that investment and their performance. Those little tricks, whether it's establishing the rotation or establishing the flow of conversations in that relationship building as well as implementing things like CRMs to be a tool to help that person be more successful. It was fun to see the number of questions for those guys.

It's important to stay in touch with your marketing person, whether you have one or not. I was talking to an office manager. She said after they got rid of their marketing person, they decided to stop all marketing all together so they can do what we're talking about here in the next little bit about how to determine the return on investment on some of their marketing efforts. They stopped so they could say, “We're going to start at a baseline and start from ground zero, then start implementing things one at a time and see what the returns are as we do these things little by little.” That might not be a recommended way of doing things. She shared her experience, but talk to us a little bit about determining the ROI on our marketing efforts.

Let's come back to that example and talk about another strategy for assessing that while you're continuing things. One comment before we start on ROI is that marketing is always fun and it's always part of a strategic plan, but it's definitely important to assess your foundation before you jump into growth. You've had some great podcasts on managing metrics and looking at financial performance. We touched on referral diversity. Most owners looking back would realize that if they started to grow their practice without a solid foundation, it's no different than trying to build another level on your house when the foundation is falling apart.

Assuming that you're doing all of those things well. You've got a good handle on your metrics, you're capturing your charges appropriately, you've got a good training program for staff, then the question becomes, “How do I grow what I'm doing and how do I expand on what I'm doing?” Looking at ROI is the first place that I like to start. This is straightforward, but let's say a new patient generates $1,000 in revenue over the course of that plan of care. It might be $100 a visit and they did ten visits or some other version of those numbers. $1,000 is the average ballpark or maybe even a little low. If you look at the average profitability, let’s use 15%. That means each new patient is generating $150 in revenue.

Sometimes the best way to grow your business is to buy another business. Click To Tweet

Most clinics that I've worked with and talked to probably are spending maybe in the neighborhood of $50 per new patient. 5% of their budget is spent on marketing, either directly or when they include their time and energy and the mileage and things like that. You spent $50 in marketing and you generated $150 in revenue. It's a 300% ROI. First of all, we don't often step back to realize that and be aware that that's probably the best investment we can make, investing and growing our own practice. That's looking at the cashflow side, not even looking at how likely is that patient to come back in the future and turn it into multiple visits, as well as what value is that building within the practice.

That part's interesting, but then you're left with the question of, “I've got this great ROI. Do I spend more?” If you go back to the owner that you were talking about, my recommendation would be not to make dramatic changes of shut everything down, but the next step I would recommend is looking at your customer acquisition cost by referral source. I've seen owners either try and look at too many different referral sources or not look at it at all. When I say a referral source, I'm talking about four to six big categories, physicians, past patients, internet search and then maybe look at advertising or outreach depending on where most of your patients are coming from.

You can look at the customer acquisition cost for each of those over the course of a year. This was in the article that you were referencing in Impact. If you look at those four to six buckets, let's say you generate a hundred new patients from physician referral and you spent $4,000 in marketing to physicians, that would be a $40 customer acquisition cost. To me, understanding that is helpful in those couple of areas. It's not that hard to do. It does manually require asking the patient not just what the script was, what physician was on the script, but how did they choose your practice. Why was it that they chose you over another clinic?

Looking at your marketing budget in those same categories. You need to know how many patients came from that category and how much did you spend marketing towards that category. That gives you a baseline to say, “For every hundred dollars I'm spending on pay-per-click, we're getting a new patient. For every $50 we're spending on physician marketing, we're getting a new patient,” and start to look at those against one another and understand. From that, you can do some quick math on what's your ROI for each of those as opposed to looking at what is it overall.

I'm sure it can be dependent upon the clinic, but do you start recommending them that as they figure out what takes the least amount of money to get the most number of patients that they start funding funneling a little bit more money in that direction? What is your recommendation after they figure out these numbers?

PTO 48 | Marketing ROI
Marketing ROI: Anything that's small but has good growth potential are those things that are worth feeding and worth experimenting with.

 

It's not stopping there. That's a good baseline in understanding it. If you understand where each one of those sits. Back to that example of a hundred new patients from physicians, you spent $4,000. It was a $40 customer acquisition cost. Next year I might look at that and say, “What if I invested a little bit more in that, whether that's time or whatever it might be?” Let me up it from $4,000 to $6,000 and then let me look at what the result is of that. If I increased my budget by 50%, did I increase my referrals by that same percentage? It's an ongoing process.

The question that I often get is which of those should I grow? Which of those should I maintain and which ones should I maybe not do at all, back to back to your example. This is some information and there are several references or several versions of it. Back in ‘87, a guy named Gary McCain published an article called Black Holes, Cash Pigs and Other Hospital Portfolio Analysis Problems. It's quite simple. My version of it is to look at the current volume and ask yourself, “Is that big or small?” You can do this if we stick with service lines, “Do physicians make up a big percentage of your volume, yes or no?”

Is the growth potential big or small? Does that tend to grow year after year or if you put more money into it, does it stay flat regardless? The third question is, is the profitability from that big or small, is it average or below average? From that, you put your answers into a quadrant, and you can start to look objectively in the same way we do with talking about evidence-based treatment. You're not looking at your marketing plan, and your marketing results and you're looking at the results of that and taking the subjectivity out of it. A quick example of that is something that has a good ROI, has a large volume and is growing. That would be classified as a shining star, depending on which version of this. Because it's growing, because it's big, that's where you're going to want to invest more of your marketing dollars. Sometimes we lose track of that, and you start to see people investing in programs that are small and don't have substantial growth potential. Maybe a therapist has an interest in a certain service line, but it's not super profitable.

Because it's someone's pet project, it starts to get more resources and more funding than if you looked at which services, which referral sources make sense to fund. It's a pretty simple process, but the concept is market in the things that are growing and have growth trends. The things that are large but aren't necessarily growing, those are still things you want to maintain. Personally, I wouldn't drop my marketing budget from that. I might decrease my marketing by 5% or 10% and see if I maintain the volume, but I wouldn't walk away from my marketing towards that sector just because it may be not growing, but it's still a substantial portion of my referrals.

Applying that formula, the same office manager I was talking to said she was surprised that they got some new patients via radio ads. She'd spend a few hundred dollars a month, maybe $200 to $400 a month to replace radio ads. I'd never done any radio ads, so I was intrigued by the story. She said they get one or two new patients a month simply by the radio ads and if we applied this formula, the size of the referral source in that particular instance is rather small. You get out the ad and there's one referral, maybe two per month. “Is there greater potential? Is that growing?” “Maybe.” “Is the property profitability big or small?” “It's pretty good.” It’s not great, but in a situation like that, according to the formula and what we're talking about here, you're not going to all of a sudden jump from $200 to $2,000 a month because you got that one person per month. Maybe you keep it where it is or maybe the fire bolts instead of cannon balls. Feed another $100 or $200 a month and see what happens. It's an ongoing process. It's a living thing like you're talking about.

While marketing is the fun part of a strategic plan, it's definitely important to assess your foundation before you jump into growth. Click To Tweet

All of those points are right on. Anything that's small but has good growth potential, those are things that are worth feeding, worth experimenting with. As long as you're tracking what you did and what was the result from it, that's the same thing we do with evidence-based treatment. We invest in a radio ad or whatever it might be. Look at the result of it and see how that compares to the $1,000 we could have invested in a different area. You're exactly right. Making small calculated adjustments, things that are low-risk, they're not super time intensive, assess the result of it. If you find that you're getting a phenomenal ROI on it, then next year you might want to say, “Let's double that or triple that.” Start out with small calculated amounts and assess the results of it.

I had a conversation on another episode regarding having the owners align their visions with their physical therapy teams, the PT’s themselves and making sure that both sides are getting met. Sometimes that comes along with physical therapists bringing up programs that they've got ideas about or things that they want to start. The beauty behind calculating the numbers like we're talking about and that you shared is that it brings some objectivity to the relative success of those programs. After instituting a program that the therapist believes in and is engaged in and want to support your therapists and their dreams, you can say, “We'll appoint this much money to the program. Let's follow it, track it, see how it goes and see if it's successful or not.” Even though they might be getting fulfillment out of that program or pet project that they have, if the numbers don't bear fruit, then you can say it's not working. Maybe we can tweak things here or there and see how it goes from there. It keeps some objectivity to it.

I know we talked about an example. I was launching a cash-pay golf program. One of the newer therapists is passionate about golf. When you looked at it, it generated a referral a month. The investment wasn't huge, but when you looked at the amount of time they spent on it, the investment in it, it was what Gary would call a mangy dog, which is low volume, low growth rate and low profitability. When you categorize it that way, it takes them a personal attachment to it. You analyze it and look at it and say, “That probably isn't where we want to spend more time and energy.”

If that therapist has passions in another area, it might be good to point them towards things that are going to be more fruitful. I like to have owners keep the 80/20 rule in mind. Look at what are the 20% of the things you could do that are generating 80% of your referrals. If you can grow those and do those well while maintaining referral diversity and making sure you're building your value at the same time and not generating a risk inadvertently. That can help you focus on the things that are going to be most effective for building that value.

I know you get this question asked a lot, but what are your thoughts on social media? Have you seen any social media campaigns that have turned a good ROI in terms of marketing strategy?

PTO 48 | Marketing ROI
Marketing ROI: We may not be smart enough to predict what's going to work in the market in terms of marketing, but we're all smart enough to track what we're doing and assess the results of it.

 

The key is if the clinic is doing a lot with social media or any area, whether they're spending a lot of time or energy into it, first of all, look at what is their CAC and what is their ROI on that. Every clinic and I know you've had some discussions even with owners themselves about their practice and where they're investing, it varies by market. It varies by clinic. It varies by that person's social media following. The big question with social media is, “Are you doing it to retarget people who have visited your website, which can be very effective?” Someone looked on your site, maybe they called, maybe they didn't, but then you use a retargeting ad to get back in front of that person. That can be an effective strategy.

You also see a lot of people use it as a way to engage past patients. The clients I've worked with, it generally hasn't fallen into their bigger pockets in terms of it’s driving a big percentage of referrals. Often, they like to stay in touch with their past patients and they feel like it's an okay way to do it. It's a low-cost way to do it. Generally, I haven't seen it be one of those that becomes a high-volume, high growth rate, high profitability. In the practices I've worked with, it tends to be lower volume, lower growth rate. Therefore, it’s not a major part of their future marketing strategy.

Social media does well when it comes to patient engagement, especially for those past patients that have been to your clinic. You can keep them abreast of, “This is what's going on. This is a new PT that we have on board. This is what we'd like to do in our spare time. This is our culture,” or however you want to call that. The one social media campaign that I have seen that's been successful in my interviews thus far is with Roy Rivera out of Houston. He simply sits down with every patient at their final visit and says, “How did things go? Did we achieve your goals? Will you do me a favor? Will you leave a good review with us on Google and/or Yelp?” They say yes, and then they leave.

Inevitably two or three days later, he'll send a personal email to them with the links to Google and Yelp. There's a low-cost way of pushing what you could call social media. I don't know where you put Google reviews and Yelp and in terms of social media, but that was one way he leveraged those things in a cost-effective way to become the number one search for physical therapy in the Houston area. That's a huge population. That's the one thing that I've seen with social media. A lot of people use social media more for patient engagement for past patients.

The key is to assess your efforts, what's working and have a system. As you try all those things, which one's most effective, not just in your market, but your strengths are going to play into that. It sounds like he has a great way of doing that. He probably has some very solid strengths in terms of the connection with that patient. He's playing to his strengths. Where I always hesitate to say, “This is what you should do,” because the key is knowing what's working in your market, what's driving your business. As you invest more in certain areas, you’re looking at the result of it. For every example that we say, “This doesn't tend to be successful or this one tends to be successful,” you're going to have people reading this that there are clinics a little different. Their strengths are a little different. Their marketing plan should adjust to it.

90% of the battle is identifying where your greatest opportunity is. Click To Tweet

The key to this whole presentation is to be strategic about what you're doing and not say, “This is working somewhere else. I got a postcard, a flyer and an email and I'm going to invest in that strategy.” If that is how you do your marketing, make sure that you're actually assessing what the result was from it so that as you go by and open your next clinic, you have a great database to say, “We're opening a new clinic.” What have the results been from the direct patient or radio advertising or social media so that when you need to generate an extra 500 referrals to fill that clinic up, you've got a good plan for how should you go about doing that? How much should you budget and where should you put that money?

I love that you put that caveat on there because if someone was going to take Roy's Google/Yelp idea and implement, the recommendation should be to go ahead and try it and see what the results are. Make sure that maybe you calendar it out, do it for a few weeks and see what happens and follow a trend. Like you expounded on it, once you start following these numbers and you see what works and what doesn't work, that's where the power comes in. You can use those things to drive growth for not only your individual practice but for future practices. I love that you put that spin on it because now you have a marketing plan. “When I do this and I put in this much money, I have a pretty good knowledge that it's going to work because it worked over here, but we're going to track it still.” Trust, but verify. I love the fact that you put that. You eventually develop a plan.

I've even worked with some owners where for them it's unrealistic to track where patients come from in all of their clinics all year. They might even do it for three months out of the year to get a sample size of what are they spending over the course of the year, where are the patients coming from? It’s no different than any research that we would do in physical therapy. You're typically working with the sample size and then you're looking at the results from that. The key to me is having a consistent process to assess it and then ideally on an annual basis, going back to those questions of is this strategy, is this referral source? Is it big or small? Is it growing or shrinking? Is it as profitable as other things they could be doing? If you grid that out, then it becomes a very quick part of your marketing plan and assessing what you did last year and have a better plan going into next year. I often tell the owners that I'm not smart enough to predict what's going to work in your market in terms of marketing, but we're all smart enough to track what we're doing and assess the results of it. It just takes a little bit of work to do that.

I don’t know if this is applicable to smaller practices, but those that are growing, at what stage do you see practices bringing on and marketing specialist or a director of marketing per se?

PTO 48 | Marketing ROI I had that discussion with a group. You made a comment on one of your podcasts about bringing on somebody who can take care of the stuff that you least like to do or it's draining to you. Whether that's a marketing director or an HR, it depends on your strengths. In general, I would say when a clinic is in that $2 million to $3 million range, it starts to make sense to have somebody that's dedicated. It depends on your goals for growth, your growth trends and where your referrals are coming from and if you're trying to build your physician referrals versus trying to build your past patient referrals.

There are a lot of variations in that answer. Some of the things like Strive and Keith that have automated some of that past patient engagement. Some of those things have been very effective and a lower cost than hiring a full-time person. We also see a lot of clinics and they might bring a practice liaison on fifteen to twenty hours a week. They often find a past patient that maybe is looking for part-time work and knows a little bit about the practice. It has the right personality and the right skills for that role. It doesn't have to be jumping into a full-time position before you're ready.

Like we were talking about before, it's smart to test things out, prove out that it's going to be effective. Typically, in the $5 million range, that's where you start to see a full-time director of marketing or a PL being more and more common. It depends on the competition in your market. I work with a couple of owners and I personally encourage them to work more on recruitment because recruiting a therapist might be a bigger barrier to their growth in comparison to patient volume. There’s a lot of variability in that.

I feel like we've covered a lot and still, we’re focused on ROI and customer acquisition costs in regards to marketing strategies. Anything else you want to share with us, Steve?

Hopefully, we covered those pretty well. John Dearing I know did a podcast with you already. There's a lot of acquisition activity happening in the industry, and you see a lot of people outside investing in clinics, private equity groups, building organizations. That's an opportunity that is probably out there but maybe less utilized. Owners don't always think about expanding by doing an acquisition. It was either John or one of his partners that once said when we were working with them, “Sometimes the best way to grow your business is to buy another business.”

That can definitely be effective for expanding your market share or if you're looking to enter new markets. It goes back to building your foundation and making sure you've got solid clinic metrics. Probably capitalizing on your marketing efforts, what's working and figuring out your market and then investing in it. Whether that's through some of the strategies that we talked about or potentially considering an acquisition. Those are all things that hopefully will help owners be a little bit more strategic about their growth. Hopefully, it will allow them to feel like they're making smart investments as opposed to spending dollars and not knowing whether they need to make that investment and not knowing what the result from that is.

Once established, Strategic Growth begins with knowing what it costs to acquire a new patient, and the ROI of your marketing efforts. Click To Tweet

I love that you shared that because the real power that comes from what we talked about, you mentioned it, but the importance of developing a firm foundation of your policies, procedures, your financials, your leadership team, the staff in place and whatnot. That puts you in a position now that you have that plus a real marketing strategy that you know works. Taking that to buying a practice and then implementing what you know is successful makes you powerful and make strategic growth, I want to say easy, but you start replicating yourself and seeing growth come from it.

It's about figuring out and understanding your own business, what's driving your own business and what drives results within your market. There is no marketing strategy for all owners. Once you understand that and understand that you can grow your business intentionally by investing in it, then the stage becomes more about investing in those strategies and starting to shift towards developing your leadership team and developing your clinic directors. Often when you get the marketing piece dialed in and you get recruitment dialed in, then your barrier to growth becomes more about developing and finding great clinic directors. As long as you know what stage you're in and what’s going to have the greatest impact on your value, 90% of the battle is identifying where your greatest opportunity is. At the same time, it's solving a barrier that exists for you now.

Thank you so much for sharing everything, Steve. If you have more to say, feel free, but make sure you share your contact information.

My email is Steve@8150Advisors.com. Our website is 8150Advisors.com. They can find more information about myself. Robbie Leonard, who is one of my partners, does a lot of revenue cycle management and training in that area. Emily and Madison are both full-time consultants working with practice liaisons. Nicole Kluckhohn and all five of us were actually part of Proaxis and over time pulled that team back together. The band is back together, so to speak. They're a great group to work with. They helped us build our practice. I enjoy working with owners to help them grow theirs as well.

Are you going to be presenting at the next PPS Conference?

I got the acceptance. I’m doing a presentation on demystifying the valuation and sales process. In working with the owners or the past couple of years, we did several acquisitions ourselves. I went through the sales process yourself and have helped several owners out with both sides of that equation. You still hear a lot of misconceptions about understanding what drives value and some of those little details can be big details. Hopefully, it will help shed a little bit of light in that area.

Thank you for sharing everything and thanks again for joining me.

Thanks for having me on, Nathan.

Take care.

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About Steve Stalzer

PTO 48 | Marketing ROI Steve graduated from PT school at the University of South Dakota with a masters in physical therapy in 1997. After working in several leadership roles, he joined Proaxis Therapy in Vail, CO in 2001 where he was one of four partners in an outpatient practice that focused on sports medicine working closely with world renown surgeons at the Steadman Hawkins Clinic.
Over the next 15 years, they grew the practice from 4 clinics and 12 therapists to 35 clinics across 4 states with a staff of more than 200. Steve and his partners grew the practice through a combination of acquisitions, opening free standing clinics as well as forming several health system partnerships including both joint ventures and management agreements.
They pioneered one of the earliest and largest sports and orthopedic residency programs taking 10 residents each year between their CO and SC operations. They also collaborated with Blue Cross of South Carolina and Greenville Health System on a “Therapy First” initiative for the treatment of low back pain, and placed therapists in several ski town emergency rooms in Vail, Beaver Creek, Breckenridge and Keystone.
Steve attributes their success to having built a great leadership team and investing in that team by working with leading consultants both in and outside the therapy industry. Steve began consulting with practice owners to share his experience and knowledge with others shortly after he and his partners sold Proaxis Therapy in 2015. Steve is the founder of 8150 Advisors, a physical therapy consulting team that helps clinic owners with growth, efficiency, and succession planning.
Steve has degrees in Organizational Psychology and Physical Therapy from the University of South Dakota, and an MBA from the University of Colorado.
In 2018, he was the lead presenter on “Strategic Growth: Big Data, Cash Cows, and Mangy Dogs” at PPS along with John Dearing from Capstone Advisors and Emily Bagby, a Practice Liaison Consultant with 8150 Advisors. Steve has written several articles for Impact Magazine on Strategic Growth, Practice Valuation, and Succession Planning.

 

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