Make your services more desirable to the more desirable.
Using the X-RAY profitability calculations we discussed in the last issue, providers can identify payers and products that generate strong collection rates and gross margins; let's classify these combinations as "gold". Other combinations that are less valuable than our "gold" combinations, but still contribute adequately to our profit mix, can be our "silver" combinations. Maybe we have a third tier we classify as "bronze". The remaining combinations that are unlikely to contribute sufficiently to the company's profits based on the provider's current experience rating are classified as "wood". Once identified, everyone in the organization should be trained on these tiers.
At initial contact, customer service representatives should offer priority to gold referrals. Perhaps gold referrals are eligible for same day delivery. Whereas silver referrals would be eligible for delivery within one business day, and bronze deliveries occur within two business days.
Wood and other referrals, which are often accepted for reasons other than a profit-motive (e.g. favors, charity), should be delivered based a predetermined zone schedule. For example:
"We have verified your eligibility, and we will have a truck in your area next week," says the friendly CSR.
"I can't wait until next," the customer replies. "I want it now or I am going to take my business somewhere else."
"I am sorry to hear that, but I do understand. Perhaps Competitor Home Medical can accommodate your schedule. I have their telephone number right here. Do you have a pen?"
See what I did there?
By consolidating deliveries for products with lower contribution margins, you make fewer trips, save fuel, and reduce operating costs. You can offer your services to a wide range of customers at reasonable margins. Making these decisions now will ensure you thrive and enable you to service patients in need for many years to come.
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