The COVID-19 crisis has been a tough time for many industries, including home care. Here’s a look at the three pillars of business growth, and how each of them fits into a revenue strategy during COVID-19.
The COVID-19 crisis has been a tough time for many industries, and home care is no exception. Agencies across the country have reported losing revenue due to clients pausing or canceling services during the crisis.
As agencies search for ways to keep their revenue up, we’ve seen some truly innovative steps, like providing staffing for temperature checks at the entrances to airports and other essential public places.
However, absent from many of conversations about maintaining revenue is a fundamental idea necessary to establishing a well-rounded revenue strategy. It’s a basic idea—but easy to overlook.
The 3 Revenue Levers
In any business, there are basically three levers you can pull to earn more revenue:
- Acquiring new customers
- Increasing per-customer revenue
- Retaining existing customers longer
Of the three, by far the most-talked about is also typically the hardest and least cost-effective—new client acquisition.
We’ll still talk about new client acquisition—in fact, we’ll open with it. But make sure that in any discussion of revenue or growth strategy, it’s discussed as one of three pillars to business growth.
Lever 1: Acquiring New Customers
Since it’s already top-of-mind for many agencies, we’ll hit on it first.
At this point, most agencies have taken some steps to adapt to the reality of marketers being locked out of facilities and other institutions that traditionally have been steady sources of referrals.
And unfortunately, this situation is unlikely to change anytime soon.
As our team has analyzed the situation, what we’ve found is that the tactics that successful home care marketers are shifting to are many of the same ones that business-to-business software sales teams, including our own team, have been using for a long time.
Our sales team has always been remote, in the sense that we’re unlikely ever to make in-person sales calls when our sales team is located in Idaho and North Carolina and our customers are scattered across North America.
There’s an established way of doing remote business-to-business sales that’s been refined by software companies and similar vendors for decades. While not every aspect of these companies’ playbooks are transferrable to a home care referral-marketing setting, many are.
Here are some of the things we’ve learned that might be relevant for home care agencies right now:
1. You need a system for organizing touchpoints, progress, and next steps.
Chances are, your marketers are able to get (or at least attempt) many more touchpoints in a day than they used to, since they’re reliant on calls and emails instead of driving around to meet in-person.
The more touchpoints, the more potential there is to over-communicate or let important messages slip through the cracks.
At the very least, you should have a detailed spreadsheet tracking every target account and every touchpoint with them. However, this can get cumbersome and time-consuming. We strongly recommend you start using a CRM system if you haven’t already; our team uses HubSpot and it’s not an exaggeration to say that we’re exponentially more effective than we’d be without it.
It also goes without saying that metrics, goals, and quotas become more important than ever in remote setting as a way of ensuring accountability and tracking the success of new methods.
2. You can optimize your process much more quickly as a remote salesperson—take advantage of this.
The process of analyzing what works best and doubling down on it is an instinctive process for most marketers; however, remote selling is even more conducive to quickly iterating and optimizing your approach because you’re able to complete more actions and track them more closely. Make the most of this.
If you’re attempting first-time (or at least early-stage) outreach with a number of new accounts, you can analyze the open rates and response rates for your different emails and begin to optimize for the approaches that work best.
3. Keep in mind the balance between personalization and scalability.
This tip mainly concerns emails. Emails are always more effective when they’re personalized to the receiver; no one likes getting an email that feels like it was written by a robot.
At the same time, you’ll be able to be much more effective if you’re not creating every new email completely from scratch—a level of scalability and duplication speeds up your process significantly.
My advice? Work on creating templates for each stage of outreach that can be used with any account, but always take a moment to put yourself in the shoes of the recipient before you send an email and ask whether there’s anything that would come across as robotic or irrelevant. Then customize accordingly.
Lever 2: Increasing Per-Client Revenue
A quick basic reminder: In a home care setting, increasing per-client revenue typically comes down to a couple options: adding hours or increasing rates. Both of these make the most sense if the client is looking to add additional types of service to the care plan.
Admittedly, this lever might be the most difficult during COVID-19 setting. From what many home care agencies are reporting, the factors that are reducing agency revenue are most-directly tied to per-client hours (clients reducing or pausing services).
One way of addressing this problem is a route that many agencies are already taking: offering flexible formats for visits and expanding your services to include offerings relevant during COVID-19.
We’re keeping a running list of ways in which we’ve seen home care agencies innovate with their visits (and use of staffing), which includes:
These are unlikely to replace all lost revenue, but can serve as a financial Band-Aid to help your agency weather the storm until things return to some sense of normalcy.
Lever 3: Retain existing clients longer.
We addressed this several weeks ago in our guide to client and caregiver retention, but it’s worth looking at again.
While it’s important to adopt a strategy that employs all three levers, a retention-focused revenue strategy is especially important in instances where cashflow is a major concern.
Client retention is high-impact and largely within your control.
Frederick Reichheld, a business strategist at Bain & Company known for inventing the Net Promoter Score, has estimated that increasing customer retention by 5% increases net profits by anywhere between 25% and 95% depending on the business model.
Increasing client retention is as much about mindset as it is strategy. It means putting client needs under a microscope and seeking to understand every aspect of the experience you’re providing to your clients, even when it results in some painful self-examination on your part.
While it might sound crazy to suggest that client turnover can be significantly reduced by things like making slightly more frequent check-in calls and incrementally improving filled-shift rates, we’ve got over a decade of experience collecting feedback and tracking turnover for 4,000+ home care agencies that says it’s not.
Retention and turnover are often about the details. Here’s where you can start:
If it seems a little excessive on your end, it’s probably about right. This is also critically important with paused clients. Staying top of mind with them will help ensure that it’s you, not a competitor, that they go to when they decide to start home care services again.
2. Establish multiple processes to learn if there’s a problem that needs your attention.
A three-pronged approach of frequent check-in calls, consistent quality assurance surveys, and online review monitoring helps to give you a clear view of what’s going on.
3. Commit to closing the loop rapidly on any negative feedback.
Listening is the first step, but it’s relatively useless unless you commit to acting on the feedback you receive, and quickly. With cashflow a high concern, now is not the time to let any aspect of client experience slip through the cracks.
The consensus in the industry is that there’s likely to be a surge of demand for home care when COVID-19 dies down.
Nursing homes and other facilities have taken a major hit during this crisis as the facility model’s flaws regarding the transmission of disease have become clearer.
Ultimately, your next task is to look ahead to how you can prepare for a potential surge in demand whenever the COVID crisis begins to wind down.
We’ll be addressing this topic in future blogs—stay tuned.