Straight talk on effective approaches to increasing revenue
by Mike Sperduti

You want more referrals? Of course you do! Every owner and sales manager is thinking the same thing: “How do I drive more revenue? How do I generate more referrals? How are we going to survive on lower margins? Even if we win competitive bidding, how do we sell enough to make it worthwhile?”

One thing that we learned from Round 1 of competitive bidding is that small companies that won the bid with little or no market share in an MSA got absolutely no increase in referrals or revenue because they didn’t market. They didn’t have a sales strategy. The midsize to larger companies that won the bid kept their market share but didn’t grow, and actually saw margin erosion on their existing business. So they’re making less on the same patients that they’re serving. Again, they won the bid, but they lost money. This mentality of “if you win a contract, the patients will come” is just plain dumb.

Today you must make sales your number-one priority and your sales team’s skills your primary focus. Industry experts predict that 40 percent of you reading this article will not be around in two to three years. For you to make it, you need to be a lot more aggressive. You need to take market share away from your competition, and it all starts with this simple formula: more appointments equals more referrals equals more revenue.

The Future is Calling

“The future is calling” was actually the name of a program I launched years ago at Triad Medical, where I implemented a telephone prospecting program against the wishes of a kicking-and-screaming management team. Triad was pulling in about $5 million a year at that time. Within six years of this new program revenues skyrocketed to about $65 million, and we’d cut sales and marketing overhead by about 11 percent. What advertising alchemy or marketing magic accomplished this magnificent feat? There were no tricks, dear reader. We just took a journey along the original information superhighway.

Behold the Telephone

Many things have changed in the world, particularly in communications and business. However, the fact remains that in 1876 Alexander Graham Bell patented the most influential and powerful sales tool the world has ever known. Yes, computer technology is wonderful, and all the sleek advances make it easier than ever to share ideas, crunch numbers and swap crucial data, but without the telephone your bells and whistles fall silent.

I’m amazed at how smart HME folks don’t understand this. To me it’s like they’re from another planet. Cold calling is the end-all, be-all of successful sales. Always has been and always will be. Your computer can leap onto a conference table, juggle eggs and belt out a spot-on Steven Tyler impression, but if you can’t identify a potential customer, get on the horn and get an appointment, nobody will ever know it. They’ll never know about you and how you can help their patients.

It’s 2013, and the HME industry still has sales representatives driving around unannounced, running up gas bills, paying parking fees, dropping off literature and calling it a sales call. Salespeople, I find this disgraceful! Look at 90 percent of HME salespeople today and you’ll find that they’ve never been trained on cold calling, they don’t like it and they simply don’t do it, just like when I first arrived at Triad. You do no cold calling… zilch!

Oh, I can hear the naysayers now—“Cold-calling doesn’t work!” And they’re absolutely right. Cold calling doesn’t work unless your sales force is trained to make it work. Cold calling is hard, it’s a skill. The reason it’s ineffective is either because the people doing it are ineffective, or they aren’t doing it at all. The simple fact is that if your sales people don’t like cold calling or are not good at it, you’re wasting your money. These people are not salespeople, they are overpaid customer service representatives.

Cold calling is still king. The successful business is going to train its sales staff to rock this critical task, or it’s going to outsource the duty to trained professionals. You are either cold calling and growing, or you’re dying.

Put this in your online registration and smoke it: If you can’t get on the phone, deliver the critical information that positions your company for a referral and get into a room with someone who makes the decisions, you’re not selling anything.

The one-on-one marketing relationship, that’s the promise and the beauty of the telephone. Proactively cold calling and engaging someone in a dialogue, that’s how you survive an economy like this where profit margins are declining and companies are folding left and right, especially small ones. Going out and finding business, that’s the ballgame. That’s how you win.

The Secret to Appointment Setting

Now, for those of you who want to start being real salespeople, here is a proven system that will help get you the appointments that you’re looking for. This system will get you the appointments with referral sources who set aside time to meet you, actually have an interest in seeing you and have a need you can fill.

You start by thinking from the end. What are you trying to do? You want them to refer patients to you, right? So think about this: How do you generate a patient referral?

You have to have a better solution than their current HME provider and it needs to make sense to them. It’s that simple. Selling is about making sense—being at the right place at the right time with the right person and a solution that makes sense. A solution that’s better than their current provider is offering. Before you get on the phone to make your calls, ask yourself the following questions:

  • What are my company’s unique selling points?
  • What makes our company different?
  • What makes us better?
  • Why does sending my company new patients make sense to this referral source?
  • Why is switching business over to us better for the referral source?
  • Can I reference any signature institution, third-party endorsements or testimonials?

The answers to these questions are the genesis to your cold calling guide. The key to getting appointments on the phone is taking that information and making it compelling for the referral source to see you. You have to motivate them to take the appointment. Remember, the first step in the sales process is not to sell them, but to schedule an appointment. Too many people start verbally spewing to the referral source about how great their company is before they actually know if they can help them and their patients. That would be equivalent to a doctor prescribing medication before meeting with the patient. Don’t be a quack, be a professional.

The Great Opener

Here is an example of a great opening that is working well for one of my clients: Hello, this is _______ with ______ HME. We help leading institutions like NYU with their incontinence patients who require supplies at their home. We have been serving the five boroughs for over 20 years, and the reason why patients and providers love working with us is we have a very easy and fast turnaround time for all new patients and get their supplies to the patient’s home in two hours or less. I’d like to stop by your office and introduce myself, get to know you a little better and see if we might be able to help some of your patients in the future. Do you have time on Thursday, or would Friday be better? (Narrow down a good time.)

As you can see from the sample call guide, this meets the criteria for a successful opening to set up an appointment:

  • It’s brief and brilliant. It gets to the point fast, identifies what makes them special (two-hour turnaround) and gets right to the appointment.
  • It builds rapport utilizing common language like “the boroughs” as well as highlighting NYU. The thought process here is “if it’s good enough for NYU, it’s good enough for you.”
  • The major competitive differentiator for this account is that they can get supplies to the patient in two hours or less. In New York, that’s a major competitive differentiator and that’s all we rest on to motivate this potential account to see us.
  • Lastly, we just assume the appointment. We said that we could meet either Thursday or Friday. We gave them two choices. This simple sales technique is known as an “alternate of choice” question. It makes the decision-making process easier on the customer. They just have to pick one and it works incredibly well.

Predict and Repeat Your Revenue

Instead of hoping and wishing we meet our sales plans, we now know we can achieve the objectives with activity-based selling. The way that I’ve built my businesses over the years is by having a predictable and repeatable sales process. Once you master this appointment setting piece of the puzzle, you’ll be able to predict and repeat revenue.

Most sales representatives get caught up in celebrating the sales, but we make it a numbers game. Let’s talk about your expectations. It’s reasonable to think that if you practice with an approach like this you should be getting a 30 percent conversion rate, meaning that if you make 10 calls you should be getting a minimum of three appointments. If you’re not getting at least a 30 percent conversion rate it means you may be doing something wrong, so please reach out to me to make sure that your process is correct. Here is a real example of one of our clients who is recording their activity numbers and how they’re able to predict future results:

This client knows that if they have 100 telephone conversations in a week, on average they will set up 20 qualified appointments. Of those qualified appointments, they will close on four new referrals, which will equal $7,200 in new sales for the week. You’ve got to change your mindset on how you actually make money. It’s not about closing, it’s about activity. In this example:

  • Every dial equals $14.40.
  • Every conversation equals $72.
  • Every appointment equals $360.
  • Every “no” equals $75.

Now all you have to do is figure out how many “no” answers you want to hear every day/week/month. This makes cold calling more fun by celebrating rejection and your path to your sales. Figure out how much more money you want to make, then do the proper activity and make it happen.

Outsourcing to the Experts

To be honest, there are some amazing salespeople who are great face-to-face, but they’re absolutely terrible on the phone. In this situation you may want to consider outsourcing the prospecting/appointment-setting function to professionals who specialize in this art and science. Let them set the appointments for your top performers and allow your team to go in and close the business. The advantage here is that your best people have more appointments and can generate new business quickly.

If you’re thinking about outsourcing, make sure that the company that you hire is familiar with HME, has a proven track record and provides recordings of the actual sales calls. Let your best and brightest salespeople focus on what they’re good at, the face-to-face sales meeting.

Sales Training

I know you’re thinking you can do this yourself, but if you really want to get sales growing fast, get your staff professionally trained. It’s too critical to mess around. We’re talking about the future of your business, and the return on investment will be enormous. Here’s what to look for when evaluating a training program:

  • It builds a culture of excellence, accomplishment and accountability.
  • It establishes high performance standards for the class.
  • It trains best methods at each step of the process.
  • It is extremely intense and interactive.
  • It requires personalization of process.
  • It includes intensive role play.
  • It requires students to go out and use their new skills and report back how they work in the field.
  • Every representative is accountable for their activity and results.

This article features the first step of the seven-step process in generating new patient referrals. In order to close the sale, you’ll also need to master profiling, interview, evaluating, presenting, closing and pinning down your referral sources. Stay tuned for more articles on these steps. In the meantime, write your call guide and get on the phone!

Dials per week 500
Telephone conversations per week 100
Qualified appointments per week 20
New business per week 4
Average monthly revenue $150/patient
New sales dollars per week $7,200