Problem Solvers

Next-Level Referral Management

Providers need to ditch the old spreadsheet and tap into the tools offered by HME software to manage their referral partnerships.

Marketing to referrals has changed. A simple “build it and they will come” mentality is not a viable approach to recruit and retain referral sources. Referrals are the driving force for an HME business, so providers need an effective management system that tracks their referral sources closely and measures a specific source’s contribution to the business. With this information, providers can make strategic decisions about where to focus their resources and what kind of work needs to be done to court new referral sources, all of which impact the provider’s revenue.

It is difficult, if not impossible, to obtain such detailed and consistent visibility into the business’ referral partnerships through a manual system of paper folders and spreadsheets. Rather, providers can take advantage of HME software solutions to create a centralized, automated referral management system for their business. With a centralized and automated system, providers can track trends in their referral sources, identify competition, improve referral partnership and, ultimately, sustain a profitable business.

Tracking Referral Trends

Customer relationship management (CRM) in HME software is an essential tool for any HME provider. Particularly on the referral end of the things, CRM solutions lend HME providers visibility into the dynamic of their referral relationships and shows how those relationships contribute to the business. Ty Bello, president and founder of Team@Work, says that CRM is “the most important piece for sales efforts into the referral community. It allows us to measure metrics that are paramount and critical to increasing referrals and also to managing our referrals in the community.”

HMEs that manually manage referral relationships are missing these key metrics. “If they do it manually, which many of us have been doing for well over a quarter a century, they don’t have a very good system of reporting what those metrics are,” Bello explains. “Therefore, they can’t identify leading and lagging indicators, which they otherwise with a software system would be able to quickly identify to look at potential gaps, loss of clients, increase of clients. And that would change the dynamic of how we would call on that referral source, based on whether they’re increasing or decreasing.”

Being able to pinpoint individual referral sources and quantify the business received from them is key to effective management of referral relationships — after all, referrals kickstart the sales process. Once a provider drills into their data, they might find that a particular partnership with a referral source is not as strong as they thought it was.

Jason Dillon, sales manager at PlayMaker Health says he often receives feedback from providers who assumed that they were receiving most, if not all, of a referral source’s business. But once they had a look at their data, the reality was very different, sometimes discovering that they were receiving only a quarter of the referral source’s business while the rest went to competitors. For this reason, “It’s really valuable for someone to understand what percentage of the business they are seeing from a provider,” Dillon notes.

As Dillon further explains, “Providers and suppliers often run into a situation where at the surface level it may feel like they have a really good relationship with a particular individual, but when you peel back the first layer, you can quickly understand that business is being sent down the way to other providers and competition.”

That data, Bello says, “shows us a better picture of what referral sources actually do. Instead of wondering about their potential, we will now get a clear indication of their actual, which then changes the way we call on them.”

Bello offers an example of how this information can influence how providers manage their contact with referral sources. “Before the data, I had a gentleman who had the potential of calling on 290 referral sources in his territory. Two-hundred and ninety before the data! Once we got the data and analyzed and scrubbed it, we were able to effectively lower that to 90.” In other words, having hard data lets providers streamline their referral management and make it more efficient, targeted and effectual.

More than telling a provider how much of a referral source’s business they are getting, the data can also tell them where referrals are being sent, if not to them. This knowledge, in combination with the percentage of the business a provider receives from a referral source, gives providers the opportunity to act more strategically.

“Now I have the advantage of knowing the competition that’s there,” Bello explains. “And if I’ve done my job, and I know the competitors’ strengths, and I know the competitors’ weaknesses, then I’m going to capitalize on the weakness because those are my opportunities to win that referral from that provider. Those two things go hand in hand for me.”

Providers can also strategically begin to expand their referral source connections by bolstering existing relationships and recruiting new ones. Once providers see the actual percentage of business that they receive from a referral source, Bello explains that they now have the opportunity to earn more of that business. “With the data, we’re able to see again what we’re currently getting to what they’re actually referring out. So there’s a growth opportunity built in right there. Let’s develop a plan of getting more of that business. Some businesses are getting 10 to 25 percent of the business, so that means there’s 75 percent more out there.”

Dillon explains how providers can use software to identify new sources: With market data, they can identify and subsequently focus on high-value physicians and healthcare facilities to ultimately capture more market share. At the provider level, Dillon says “you can drill into this by state, by county, by zip code even to the street level if you wanted to be so granular with this data. It really identifies the low-hanging fruit and can tell you the physicians or providers in your geographic area that are writing for the products and therapies that you support.”

Added Benefits

By utilizing software to manage their referrals, providers can ensure that the information they have is reliable and consistent. Dillon explains, “One of the biggest missteps is the consistency. With managing a book business and their referrals, providers often let things slip between the cracks, especially the accounts they need to focus on… Sometimes it may be maintaining a relationship that’s going really well, other times it may be spending face time or having consistent access to people that you know are higher-volume referral partners but just don’t get enough of your time and attention.”

Electronically tracking referrals partnerships also ensures consistency despite attrition. “In the post-acute space, everyone’s aware that attrition is just a part of the process, and something we hear really often is that when a rep leaves the company, so does their book of business,” Dillon says. Tracking electronically, “makes the process more seamless and allows the manager or the new rep to come in and pick up exactly where things left off with little to no disruption in terms of transitioning that contact.”

In addition to consistency, tracking and storing referral data in an automated system increases efficiency. “The time it takes to document things manually and the errors that happen with human data input — it causes more issues than it solves,” Dillon adds. More than that, it streamlines the reporting process, so that providers can run reports about referral partnerships more quickly and share them with the team on a more frequent and consistent basis.

Overall, providers who utilize a CRM for their referral partnerships will, as Ty Bello says, save “time and talent.” With an automatic system and with focused referral management, providers can reduce layers of inefficiency that cut into revenue all while making the most of their referral partnerships.

This article originally appeared in the May 2019 issue of HME Business.

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