The Masters of Marketing Administration is an educational advancement for training of business owners and their administrative and support staff on the Viva System—a system that puts in place the
ideal residual business model for consumer
acquisition, loyalty and retention.
Copyright © 2016 by Gregory Hughes, Viva Concepts, LLC. All rights reserved. This book or any portion thereof may not be reproduced or used in any manner whatsoever without the express written permission of the publisher except for the use of brief quotations in a book review. Printed in the United States of America. First Printing, 2016
Overview of the Viva System
Every Viva course begins with an overview of the Viva System and its four business laws. The fundamental growth of any business is dependent upon application and use of the four business laws illustrated below.
1) 2) 3)
Consumer Acquisition: Every business will always have to acquire new consumers to continue to expand. Why? Because existing consumers are lost every month from the company’s database.
Consumer Sales: Once a business acquires a consumer the business has to sell its service(s) or product(s).
Consumer Retention: Once the consumer has purchased something then that same consumer is entered into the company’s database for future purchases. This law is at the core of every businesses growth potential.
Consumer Experience: A positive experience with the service or product generates reviews and referrals. This is far more powerful than it appears as referrals are the lower cost of consumer acquisition.
Consumer Acquisition Consumer Retention
Consumer Sales Consumer Reviews
The “Secret” to Increasing Case Acceptance Growing the Active Patient Database
The most important aspect to improve case acceptance in any practice is through an understanding of the four business laws and how they interrelate. Speci cally, when a patient enters a practice and receives his or her diagnosis, much of the diagnosed work is done at a future date due to patient limitation of nance, ceilings on their insurance, fear of doing the procedure and so on.
To fully grasp how the four business laws are interrelated let us cover some basic metrics (measurements) about the dental industry. The rst metric, or measurement published by Dental IQ, the American Dental Association and Dental Economics, reveals the incomplete treatment in dental offices (sitting in the patient les) across the country averages 60-65%.
All of a sudden the importance of Consumer Retention becomes extremely important. There are several reasons for this:
1) Retention becomes a critical factor in raising case acceptance as the work is done in subsequent visits.
CONSUMER RETENTION always increases CASE ACCEPTANCE.
2) The patients, who are in a hygiene retention program where they visit twice a year for their cleaning and exams, have a higher case completion due to the education and dialogue from the dental hygienist and staff.
3) The practice has already paid for the acquisition of the patient and the existing patient is always more likely to accept treatment due to improved trust with the doctor and staff.
4) Returning patients improve Consumer Acquisition as they begin referring family and friends causing higher word of mouth new patient referrals.
CONSUMER RETENTION ALWAYS INCREASES CASE ACCEPTANCE
Growing the Active Patient Count
The diagram below illustrates what the four business laws accomplish. As seen by the arrows of each business law, each law supports the increase in size of the active database. The active database controls the growth of any business and its long term increase in both the size of the business and the volume of its revenue.
Consumer Sales (Case Acceptance)
Consumer Reviews (Positive Experience)
EACH OF THE FOUR BUSINESS LAWS INCREASE THE SIZE OF THE ACTIVE DATABASE
Acquiring New Consumers:
The only 2 Workable Methods for Acquiring New Patients
1. Internal Referrals
The only 2 workable methods for acquiring new patients are 1) Internal referrals and 2) Direct Neighborhood Mailers. Let's rst take up internal referrals, which are also called "word of mouth" marketing. This marketing is the most important and lowest cost of acquisition in existence. As word of mouth simply transfers from a satis ed customer to friends and family.
Dental Office Patient
Recent ndings from Nielsen1 support the remarkable potential of referral marketing, observing that people are four times more likely to buy when referred by a friend. Strategic use of referral marketing allows professionals to tap into the power of consumer recommendations to achieve exceptional results.
• Customers are 4 times more likely to buy with referrals from friends
• Referral programs are among the least expensive marketing strategies
• Referred customers spend an average of 13.2% more than regular customers
1 Neilsen Research is a market analyst company with multiple systems of surveys to determine consumer habits, pur- chasing patterns and ratings on most all aspects of consumers.
The Only Method to Lower All Marketing Costs
The national average cost of obtaining a new patient is $250. As this is an average, your cost may be higher or lower. However, it’s a FACT that your cost will of acquiring a patient is reduced by 1/2 by obtaining a referral. IF a 2nd generation referral is obtained then the cost of acquiring a patient drops to 1/3rd.
1st Generation 2nd Generation Referral Referral
Leveraging Word of Mouth: On Steroids
The Viva Referral Gift Pak, called a Vivapak, was developed to leverage word of mouth referrals to bring down the cost of all marketing. The vivapak, due to its uniqueness, remains in the home with a shelf-life month after month which creates the highest response to word of mouth referral.
$250 per Patient
$125 per Patient
$83 per Patient
The Viva Referral Gift Pak
2. External Marketing
The diagram below illustrates the concept of neighborhood ownership. The most vital action for any business upon opening is to establish a Geo fence that surrounds the business.
This geofence is where 90-95% of your consumers (or patients) are located.
In the dental industry this geo-fence1 is an average of a 1 to 2 miles radius from the address of the office. The largest situation that every business encounters when they open for business is that the local neighborhood people do not know who you are or what you do.
They have no idea who the owner is and mostly no idea of where you are located. Yet the business, or dental practice, is located right in the neighborhood where these people would travel for services.
There is only one form of external marketing to become known in your neighborhoods... and this is direct mail.
1 A geo-fence is a virtual perimeter for a real-world geographic area. A geo-fence could be dynamically generated—as in a radius around a store or point location, or a geo-fence can be a prede ned set of boundaries, like school attendance zones or neighborhood boundaries. Source: Wikipedia
The Geo-fence: Average Radius of 1-2 Miles
Conduct your own survey! Over the past 20 years thousands of neighborhood homes directly within blocks of the practice where asked two simple questions:
1) Do you know who Dr. Jones is and
2) where he is located? Each survey was 100 different homes in two separate directions...a total of 200 surveys.
Of the 200 surveys completed around hundreds of dental practices, in over 98% of the surveys, 200 out of 200 surveyed homes said, "no" to both questions above!
Try the survey yourself! It will utterly astound you, no matter how many years you have been there.
Neighborhood Ownership & Tail of the Kite
The only method to rapidly identify your business by people in your local neighborhoods is through neighborhood mailers. Direct mail (neighborhood mailers) surpass every other type of marketing.
But uneducated, direct mail can utterly fail...so one must intelligently follow the rules and laws of direct mail. Foremost is identifying your location in all
mailings...this concept is known as "Tail of the Kite."
Your office must be branded and use an iconic and nationally advertised company, such as Starbucks, Walmart, Home Depot, McDonald's or it can be an iconic or well known landmark located by your practice, such as a famous park, or bridge, etc.
In using the "Tail of the Kite" you are capitalizing on the millions of advertising dollars to "identify" or
"locate" your office in an instant!
Sound Bridge Dental Arts Logo Rides on the "Tail of the Kite"
Direct Mail Marketing Direct Mail
Neighborhood & Community Dominance
Unquestionably the most signi cant method of obtaining neighborhood and community dominance and market share is through repetition of direct mail. Direct mail however can be ineffective without an understanding of 4 KEY factors.
1. The offer
2. A high open rate (must be aesthetic)
3. Repetition of mailings: at least 4 - 8 to the same address 4. Call conversion
How Your Patients Want to be Contacted
Research from dentistbranding.com
1. The Offer
The Offer is the “special price” or “reduced price” to entice a customer, or patient, to try your office. Below are examples of good offers and bad ones. An offer, to work, cannot be higher than other offers in the same area and within the same industry! They should be close to the other offers in the area.
Two Guidelines for Choosing an Offer:
1) An Offer should not be priced above the specials already being offered in the local area.
2) The Offer must address a broad public, not a niche . The services consumers are most aware of in the dental industry are cleanings, braces and teeth whitening. Offers on these services hit a broad and large public, versus an offer on an implant, dentures or root canal. These types of services hit a very small portion of the population causing a lower response rate and far higher marketing costs.
2. The Open Rate
Junk Mail Rarely Opened
Response rate is .002%. This means that for 10,000 pieces of direct mail (such as post cards) the response will be 20 phone calls. Average conversion is 30%, which means 6 new patients will arrive in the dental office.
Aesthetic Mail High Open Rate
Response rate is .005%. This mean for 10,000 pieces of direct mail the response will be 50 phone calls. Average conversion of 30%, which means 15 patients will arrive in the dental office.
3. Repeated Mailings
How Often Do You Mail to the Same List?
For as long as your business is in the community or neighborhood. Mail to it one or two times and you’ve “primed” your potential customers but will lose the majority of your direct mail marketing dollars. Repeatedly mail the same direct mail piece to the same people.
Your public will miss or ignore your marketing message 2 out of every 3 times you communicate it.
ABC Family Dental
4. Call Conversion
The most important aspect of acquiring New Patients from ALL marketing efforts is understanding “The Single Channel.” The below diagram illustrates how all marketing efforts, from all types of marketing and advertising, are channeled through a SINGLE person! The Receptionist. The value of a receptionist and her skill and competence at converting new price shoppers and people who inquire about services of the practice is in fact one of the most vital factors in the expansion and growth of any practice. It cannot be underestimated.
Pay Per Click
Making All Your Marketing Work
The cost of acquiring new patients is CONTROLLED by the ability of the receptionist to CONVERT new callers (enquirers) into scheduled appointments! The ONLY channel to new patient enquirers entering your practice is through a SINGLE CHANNEL. And that channel is the Receptionist!
The Single Channel
Every single call generated from ANY type of marketing comes through a SINGLE CHANNEL. And that channel is the Receptionist.
The Actual Cost of Low Conversion Rates
New Patient Annual Value
The nationwide average value of a dental patient in the rst year is between $900 to $1200.
Dental Clinic & Web Marketing, The Wealthy Dentist, The Dentists Network, Dental IQ, Dental Economics and The Levin Group, Inc. Conducted surveys and research showing that new patients in their rst year, have a national average value over $1,000 per patient.
“The Wealthy Dentist has calculated that the average value of a new patient at a typical dental practice is about $1,400 over the rst nine months.” Jim Du Molin
Cost of Patient Acquisition
The average cost for new patient acquisition nationwide is $200- $350 per patient. However, most practices have never calculated the actual cost. To guess is to think one knows when he doesn’t. Most practitioners don’t have the personnel or the time to obtain the data and metrics. At the end of the day, the cost to obtain a new patient is expensive.
Cost of New Patient Acquisition
Value of New Patient = Within 12 Months
Actual Cost for New Enquirer Not Converted
31 Calls Not Converted Out of Every 40
Note: This example is typical of offices across the country. This office had all calls recorded in November 2016. The receptionist was bright and a 9 year veteran. The conversion rate out of 40 new callers was 9, a conversion percent of 24%. The national average ranges from 23-35%.
$1,250 X 31 = $38,750
Lost calls Monthly Revenue Loss $38,750 X 12 = $465,000
Months/year Annual Revenue Loss
$465,000 x over the last 11 years in practice = Over $5 Million in lost income
Consumer Retention (LOYALTY)
The Future of Dentistry
The industry of dentistry has been focused on building a practice through new patient acquisition. While acquiring new patients is and has always been a part of any business model, it has never been the most important component!
The Most Valuable Component
The most valuable component of any business is its existing clientele (patients). The "business aspect" of this is called RETENTION & LOYALTY. Retention, in the dental industry, is the only component that builds residual income.
The dental industry, consultants, marketing companies, website companies, ma- jor dental suppliers and the like have the Internet inundated with "getting new patients." You will be hard pressed to nd articles about the most valuable asset of your business....your patients.
There is no " nger-pointing" as to who is right or wrong. The only important thing is bringing to light the "hidden information" concerning long term practice growth.
Retention & Constant Contact & the Residual System
The value of an existing patient is rarely understood, yet businesses for a millennium have built empires on utilization of their existing consumers to generate word-of-mouth referrals. This presentation is about you, your efforts and time, or lack of time in proudly building a practice that allows freedom, both time-wise and nancially.
The missing element is residual Income! Viva has uncovered it!
Residual & Linear Income–De nitions Due to Minimal Residual Income
Residual Income: is income that continues to be generated after the initial effort has been expended. Also called “recurring income”... hygiene retention income.
Linear Income: is “one-shot” compensation or payment in the form of a fee, wage, or salary,” ... the majority of practices in the U.S. operate off this type of income.
The cost is FREEDOM & TIME:
Residual Hygiene Revenue Always Outperforms Operative Revenue
With the Correct Retention System & Disciplines Residual Hygiene Revenue Always Grows With Time
Operative Dentistry from Doctor Always has a Revenue Ceiling
the dynamics and growth ne has to understand the
More Free Time
come is income that continues to be generated itial effoErxtphonaesnbtiael eBnene xtps efrnomdeRdes.iduAallsIonccoamleled
The bene ts or rewards from a Residual Income based practice are far greater than imagined. The workload ma-
jorly reduces for the practitioner but as well for the general staff. Retention is what causes residual income and the "by-products" are as follows:
• Higher case acceptance due to patients coming back through hygiene visits
• Higher income security from hygiene revenue
• More free time and longer periods away from the office for family, vacations or hobbies
• Increased loyalty from patients
• Most importantly an increase in word-of-mouth referrals is generated due to the increase in people coming in and out of the office.
The Single Largest Bene t
The single largest bene t of a residual income practice is removing the burden, stress and day to day "grind" of daily practice.
Every owner of a practice that is a primary producer has a pair of "silent handcuffs" attached to his business. It is much like having a rubber band attached to the owner. If he or she leaves the practice for any length of time, such as 5, 7, 14 days or longer, here is what occurs.....the longer he or she is "out of the practice" the tighter the rubber band becomes. Why? The rubber band tightens due to nancial obligations of the business:
Payroll, leases, rent, equipment payments, lights and utilities not to mention his or her personal expenses. When the primary producer (or owner) leaves the office, the production drops to zero:
Residual Income Continues
Dr. Stops Working
Income drops to zero
Residual Income Contains
ONE Major Component
Linear versus Residual Income ear versus Residual Income
Total Residual Income increases exponentially against TIME! sidual income has ONE major component: TIME
Linear Income vs. Residual Income
Linear income is the work-a-day world for 95% of practice general dentists.
otal Residual Income increases exponentially against TIME!
Linear income is itself part of the working model for dentistry... but as you work, and put in the time over the years, build your residual income and invest in your database to raise your hygiene residual income center. The above graph illustrates how linear income goes to zero when you stop working at any time. Residual in- come continues.
Years go by quickly and your most valuable asset in creating residual income it TIME.
The Largest Situation
Long Term Practice Growth
The national average database metrics in the dental industry after 15 years of practice ranges between 800 - 950 active patients.
National Average after 15yrs
650 - 800 800 - 950 700 - 850 650 - 800
450 - 550 200 - 300
0 5 10 15 20 25
Database Peaks Between 12 - 15 Years And Then Declines
ADA Surveys Show a Minimum of 35% - 45% of Your Practice Database is Lost Every Year
60 - 65% of patient les in the dental industry have incomplete treatment
Gross Income Senior Datum
"The size not the quality
of an organization's mailing list and the number of mailings and letters to it determines the gross income of the organization."
Source: L. Ron Hubbard from his book entitled, Organization Executive Course, Volume 2.
The book is available at the Hubbard College of Administration, 320 N. Vermont Ave, Los Angeles, CA 90004.
Revenue growth is always proportionate
As the owner, your most critical statistic to keep, monitor and control is:
The Size of the Active Patient Count1
to the size of the Active Consumer Count
1 Active Patient Count is de ned as the No. of Recall Visits per month, per quarter and per year. The Active Patient Count
does not include new patient hygiene visits (cleanings and RPCs). These hygiene visits only count when they arrive for a recall visit.
The Only Method to Increase The Active Database
One of the primary and most important aspects of any business is controlling the number of people that come into the organization on a daily, weekly and monthly basis. The nancial volume and solvency of any organization depends majorly on the number of people that come into the business. This is called "Bodies in the Shop" and was observed and discovered by L. Ron Hubbard and written and published in the book entitled Management Series 1. The article is dated 27 December 1963, entitled, "The Magic of Good Management." The book is available at the Hubbard College of Administration, 320 N. Vermont Ave, Los Angeles, CA 90004.
If you look at any retail store you have visited the importance of "Bodies in the Shop" immediately becomes apparent. If you were in JC Penney's buying shoes and took note of the number of people, and let us say there were 20 to 25 people visible in your line of sight. Well, three weeks later you enter the same store but the number of people (Bodies in the Shop) is dramatically increased as you can now visible see 75 - 100 people
in your line of sight. "Bodies in the Shop."
There is undoubtedly no question that the nancial volume will be far greater with more
Calculation to Increase Bodies in the Shop
There are 3 ways to increase the Bodies in the Shop for a dental office:
1. New Patients
2. Patients seen by the dentist for operative services 3. Hygiene recall patients
1. The Number of New Patients Per Month
What is the average # of new patients seen by most dental practices per month?
The "bodies in the shop" generated by the dentist hits a ceiling of 200 to 220! While he or she could "raise this statistic" through longer hours, the fact remains he or she cannot dramatically increase or raise the "bodies in the shop," and herein lies the reason why the practice income hits a ceiling after a few years of practice!
The Active Database can Only be Increased by Increasing Hygiene Recall Visits
2. The Number of Operative Patients Treated Per Day by the Doctor?
What is the average # of operative patients seen per day by the doctor?
10 patients/day X 20 days/mo.
Total "Bodies in the Shop" from #1 and #2 = 230/mo.
There is a ceiling of approximately 230 to 250 "Bodies in the Shop" from a combination of new patients and patients seen by the dentist for operative services.
3. The Number of Hygiene Recall Visits per Day & per Month
Hygienist #1 Hygienist #2
Hygienist #3 Hygienist #4
What is the average # of patient recalls seen per day by the hygienists?
8 patients/day X
Hygiene Industry Metrics
In managing the hygiene center of any practice it is important to know the average metrics (or numbers) that the average hygienist across the country produces each day, month and year. With proper production gures one can then set up a hygiene center for both excellent patient care and as a pro table revenue center.
The following charts below show the hygiene industry average days worked, patients seen per day as well as the average daily and annual revenue produced.
U.S. Average Annual Hygiene Metrics
1. Number of days the average hygienist works per week.
2. Number of weeks worked per year.
3. Total working days per year.
4. The average # of patients seen by dental hygienists per day.
5. Number of hygiene visits per year for a single hygienist.
U.S. Average Annual Hygiene Revenue
200 8 1,600
Annual Revenue per Hygienist
Average daily hygiene production per day.
Average Daily Production
Total Working Days/Year
Current Hygiene Revenue
Hygiene Days Per Week
Step 1: Write down number of days of hygiene currently in your practice. Enter this in the box provided.
Total Hygiene Days Per Year
Step 2: Multiply number of days of hygiene, from Step 1 above, by 50 working weeks/year. Enter this in the
Total Hygiene Revenue Per Year
Step 3: Multiply the total yearly hygiene working days, from Step 2 above, by the average daily hygiene production in your office. If you don’t know the daily production amount, just give an estimate of
the average. Enter this in the box provided.
Calculate your current annual hygiene revenue by following the steps below
What the Numbers Should Be
According to the ADA the national average for number of new patients per month is 30.
Size of Database after 1 Year
Size of Database after 10 Years
Years in Practice
Size of Database after 20 Years
Watch The Numbers
According to the American Dental Association the average practice in the dental industry loses approximately 40% of its patient base each year. The average dental practice in the U.S. obtains 30 new patients per month. The below illustration shows the size of the patient base after 1 year, 10 years and 20 years. At 30 patients per month at the end of the rst year the practice will have 360 patient (12 months x 30 patients per month).
The red outlined number represents a 40% loss of patients per year. The purpose of this illustration is to demonstrate the potential size of the database taking into account an average loss of 40%. These numbers are used in the following page to show the potential hygiene revenue if the practice had retained its patients over time.
Years in Practice
40% Loss in Database Each Year
The Future of Dentistry
The illustration below uses an average practice after 10 years of business and was taken from the previous page to simply demonstrate the potential hygiene revenue if the practice had retained 60% of its patient (as 40% of the patient base is lost each year). As seen in the diagram below there are 2160 patients that should still be in the database of the practice. Each of the patients should have an average of 2 hygiene visits per year, giving a total of 4,320 hygiene recall visits. The remaining math is explained and shows how many hygienists the practice should have after 10 years.
10 Yrs DATABASE
4,320 Hygiene Appts
Retention & Loyalty
The Average Hygienist works 200 days/year. Hygienist Treat An Average of 8 Patients/day.
The Annual Patients Seen Per Year = 1600.
The Average Daily Hygiene Production = $1,500
4,320 Recall Patients/Yr 1600 Patients/Yr/hygienist
2.7 full time hygienists
Annual Revenue for Hygiene Center
The average industry hygienist produces $300,000 per year. With 2.7 full time hygienist with each producing an average of $300,000 per year would generate $810,000 in annual hygiene revenue.
The Single Largest Situation
The single largest loss of practitioner’s long term income in the dental industry is database leakage. The dental industry is unaware and uneducated on the subject of consumer retention. As stated earlier in this book, the focus for practice growth is on obtaining new patients.
90% of Every New Patient
Is Lost Out the Back Door
Calculating the Loss
1. How many days a week of hygiene does the practice currently have?
2. Multiply the # of days of hygiene X 8 patients per day. This will give you the average number of hygiene patients per week.
3. Using your calculation from step 2 above, multiply the # of hygiene patients per week X 50 weeks per year. Now divide this number by 2, as the average patient should be seen twice a year by the hygienist.
4. The number calculated in step 3 is very close to your active patient count.
5. How many years has the practice been in existence?
6. What is the average # of new patients per month in the practice?
Note: Use the average # of new patients for all years the practice has been open. Give an estimate to the best of your knowledge.
7. Multiply the # of new patients from step 6 X 12 months per year. This will give the annual number of new patients seen by the practice.
8. Take the number from step 7 and multiply it times the number of years the practice has been in existence.
9. Divide the number in step 4 by the number in step 8. This will give a percent of database patients lost since the practice has opened.
De nition of the word Dynamics
The forces or properties that stimulate growth, development, or change within a system or process.
The most important dynamics of your database is leveraging your patients for word-of-mouth referrals. Through the history of the dental profession, the majority of practices have been built upon referrals.
To date, the full dynamics and system of leveraging patients for referrals, has not been researched or published.
There has been no automated system for database retention and loyalty. Viva researched and developed an automated database retention program, desperately needed for long term practice growth and building of the residual income component of the practice.
Your marketing dollars for external marketing are costly, and while necessary for any practice to grow, the vital element of any marketing is to then capture your acquired patient through a retention program to leverage your marketing dollars to generate referrals.
Database Dynamics (Word-of-Mouth)
The Dynamics of Database Referrals
= A patient in Your Practice
= A potential new patient referral
The average family Home has 3 occupants
Each family member has 2 close friends Each household has 8 potential referrals
The Dynamics of Database Referrals
This illustration depicts a typical neighborhood interaction between friends and family. Remember the diagram on the prior page where each household member has 2 close friends.
This diagram shows a mother in one neighborhood home (who’s husband is a patient in your office).
She goes to coffee with one of her close friends, nds out about another dentist for her child, and ends up in another dental office in the community.
The next page further shows the typical dialogue on how a referral is generated.
ABC FAMILY DENTAL
No Constant Contact = Lost Referrals Home
“I was thinking about getting my son
Prevention of referrals being sent to another practice in the area is through constant contact to your database with a warm message and special offers for use by family members and close friends.
My daughter just started Invisalign at
ABC Family Dental and she just loves it there!
ABC FAMILY DENTAL
Lost Loyalty & Retention
Capturing recall patients through repeated database mailings, offering incentives is the single largest business law for revenue growth.