Why Your High Call Volume Is Killing Profitability - Circle Social Inc

Why Your High Call Volume Is Killing Profitability

Seems counter-intuitive, right? Aren’t more calls better? When we talk to most centers about marketing, the number one thing they want is increased call volume. They just want “the phone to ring…more”

But there is a big problem with that. It’s actually really easy to make the phone ring in addiction treatment. So many people have addiction issues, all you have to do is start pushing out ads on almost any medium, and the calls will start coming in. This is how third parties you buy calls from work. They just run massive TV, radio, or online campaigns and divert calls to paying centers.

But, by calls, we basically mean the Medicare/Medicaid calls, because that’s almost all you’re going to get. As we talked about in our article on How to Reduce Medicare/Medicaid Calls, this is the majority of inquiries made to treatment centers.

And this is a really big problem because you’re paying for those calls in multiple ways. First off, you’re paying for the marketing. And if you’re marketing on Adwords or buying calls, that means you pay for every click and every call, regardless of whether or not someone has insurance or can afford your program.

Then you’ve got to pay to staff the call center. If you’re buying calls, 1 in 100 or 1 in 150  is a good number of conversions on average. That means you’re paying for 99-149 calls that have no chance of becoming admits and you’re still paying all the staff to field all those calls.

Plus, there is opportunity cost there. What if, while taking the other 149 calls, you miss the 1 call that was a potential admit? There goes a lot of money because, of course, buying calls or buying clicks on Adwords has no long-tail advantage. You’ve built no brand, no engagement, no audience. You’ve just paid for volume.

Most people don’t realize it, but sites like rehabs.com and addictioncenter.com are owned by treatment centers. They take the best calls for themselves, then they sell off the low quality calls or sell space on their site to other centers. Pretty good deal, huh? These centers are actually able to make a profit on their unusable call volume or traffic.

Lower Volume, Higher Quality

What if you do things differently? What happens if you push out ad campaigns that highlight the need for private pay or private insurance? Calls drop off drastically. Now, instead of 99 calls a day, you’re getting only 3 or 4. That scares a ton of centers, but it means that the calls you do have coming in are of decent quality.

The even scarier thing is that you’re still spending the same amount of money. If it cost you $5,000 in ad spend to get an admit before, it’s still going to cost you $5,000 an admit, but there is going to be a lot more silence on the phone. You can’t know as well if the campaigns are working, if people are responding to them.

But you’re also saving a ton of money operationally. Instead of needing a call center staff of 3 or 4 per shift, you can now have 1 or 2. You just took a 50% cost reduction in overhead.

And the huge advantage here is that call center reps get a lot less stressed. Handling Medicaid calls, with their extensive sob stories or anger that you won’t help them for free, really takes a toll on call reps. They burn out.

But if you focus on running really targeted campaigns that build audience and trust over time, your reps will be dealing mostly with people who can actually afford your program.

Treatment Centers Need to Radically Shift Their Perspective

This is the change that centers need to make. They need to keep spending the same amount of money, but can’t be doing it through call buys and Adwords. They need to be taking that money and pushing into channels that build trust over time – business development, Facebook, community outreach and involvement, and alumni programming to name the big ones.

These strategies are long-term, they’re sustainable, they don’t burn people out, AND they tend to become lower cost over time. When you focus and build audiences through long-term, strategic marketing campaigns, you build bigger and bigger audiences for lower and lower costs.

The reality is that this is how almost every other industry in the world works. Addiction treatment was able to get away with a different model because the industry was so immature. But, like any other industry that starts to mature, competition becomes fierce and profit margins become smaller.

$400 per admit? Sure, If You Take the Time to Do It Right.

To really understand how real businesses do marketing, here’s a quote from a woman who has been following one of our client’s Facebook campaigns since January:

Potential Client Comment January

So not only is this client getting calls from this month, they’re also getting calls from people that started following, but weren’t ready to make a decision from January. And we can assume also from February, March, April, and every other month. We actually had our best week ever last week with 7 admits, all from Facebook and all cash pay, and we only spent $2,800 in ad spend. Suffice it to say, it was a very profitable week for their program.

Now, the reality is here that we didn’t actually bring in the 7 admits at a cost of $400. This is a big mistake a lot of centers make. They try to track results in a one-to-one manner within the same week or month. Good marketing doesn’t work like that, because real businesses and real trust take time to build.

Just like the woman from January, we know that many of these people had been following our campaigns for weeks or months, they all just happened to come to a decision to get help around the same time. That’s the power of long-term, strategic marketing.

In January, we were paying $6,000-$7,000 an admit as campaigns were brand new. The audiences didn’t even know who our client was, much less trust them enough to pay cash and enter the program.

However, over time, this cost has continued to come down and down as more people are in the pipeline for longer and longer periods of time. We not only get admits who are ready to make a decision now, but we end up admitting many people who were much further back in the decision-making process. That’s how you bring down monthly cost per admit from $7,000 to $400 – time and trust. It took 8 months, but it worked.

Remember, only 10% of people across almost any industry, are ready to buy at any given time. That means that a full 90% of your potential patients who need help, are not ready to make a decision at the moment. But that 10% is all most addiction treatment centers ever market to. They completely ignore the 90% of other potential patients.

Make the Shift Now or Prepare to Shut Your Doors as You Burn Through Cash

That’s why we here at Circle Social have been preaching the long-game, largely to deaf ears, for a long time. But now people are starting to listen. With centers closing left and right, many owners and directors are starting to realize that you can’t rely on short-term thinking anymore. It’s just too expensive and there are too many centers now competing for that small 10%.

Just like Rome, you can’t build trust in a day, and there is a ton of distrust out there around addiction treatment right now. It’s still super easy to get the phone ringing in 1-3 days, full of Medicare/Medicaid calls because they don’t need to trust you. They’re not paying anything anyway. Remember, there is always a direct correlation between the amount of trust a business needs to build and the price of their product/service.

But Medicare/Medicaid calls don’t pay the bills, unless you’re in New Mexico or somewhere else where reimbursement is actually reasonable. So what’s the smarter business play? Paying for a ton of calls and the staff to take them for very little return, or paying to build trust with real people that have the means to afford your program?

It’s going to take longer and the phones are going to be much quieter. The average time it takes to build out and execute on a real marketing strategy that drives these kinds of long-term results is 3-6 months depending on what you’ve previously established.  But, when the phone does start to ring, it’ll be with qualified people. And, as campaigns build upon themselves, you get a snowball effect where more and more qualified people are calling, even while your marketing costs remain fixed.

So many centers don’t want to wait 3-6 months. They want admits now, which isn’t going to happen. So the real alternative is, do you want to build out a long-term plan that drives success or do you want to throw a bunch of money into different things every month until you run out of cash and have to close? Seems like an obvious choice, but so many centers have chosen the latter, which is why they’re not here anymore.

Going the former route means you need to find the right partners. You can’t just test out a new marketing director or an agency for a month and pray magic happens. You have to find someone who knows how to deliver, someone who you can be confident will get results after you’ve invested so much time and money. Because you certainly can’t afford to put 3-6 months of time and money into something that ultimately doesn’t work.

And that’s where Circle Social stands out. We don’t act like vendors. We don’t just do boilerplate SEO or marketing campaigns like so many agencies (those don’t work anyway. Every center needs a unique and tailored strategy for it to work). We deeply understand the operations and business side of addiction treatment. It’s why we do as much operational consulting for our clients as we do actual marketing. Often times, we’re not just consulting on strategy, we lead it.

We understand the whole picture and we operate as business partners. Our agreements are very simple. We will help your center grow and you will help us grow our agency. It’s a partnership and a win-win.

We’re committed to helping people get into recovery. We know that a center with a good program needs to reach as many people as possible. By helping them save costs and reach more people, we enable our clients to help that many more patients, and that’s the real goal.

If you’re ready to work with a team who will become your partner in helping others and in growing your center, then reach out below.

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About the Author

Nick Jaworski is the CEO of Circle Social Inc. Seeing a real need for innovative, ethical recovery center marketing and growth, he launched Circle Social to help the best addiction treatment centers connect with people who needed their help the most. He is also the proud father of the most beautiful girl in the world. You can most often find him sharing thoughts on business strategy, addiction, and behavioral health online.