Truth in Numbers: What Your Phone Conversion Rate Means to Gross Margin

We’re going to tell this tale mainly by the numbers.

To “numbers people,” figures say it all; an Excel spreadsheet tells a story more excitingly and effusive than any Harry Potter novel. If you are not fascinated by columns, rows and formulas, please stick with us for a minute, then pass this along to your administrator, business manager or CFO.

And if you are a numbers person, look at this and tell me what it says to you:

Here’s the bottom line answer: If the conversion rate on inbound phone calls increases from 20 percent to 30 percent—and everything else is the same—the Gross Margin for “B” is 50 percent greater than “A.” ($525,000)

A British company inspired this example, and you are welcome to plug in your own numbers and talk to your resident numbers person. The only difference between these two providers is having the staff training to convert inbound inquiries to office appointments.

Two out of ten calls for “A,” vs. three out of ten for “B” doesn’t sound like a big difference until you realize that the “little” difference on the phone produces a 50 percent higher gross margin. So it isn’t more inbound calls, higher fees, larger office or better chair-side sales. It’s the telephone conversion rate that makes all the difference.

To be candid, there are far worse scenarios than Provider “A.” In our work with healthcare practices, medical groups and providers throughout the nation, it is common for us to discover that a lot of prospective new business never moves from phone call to appointment. It’s unintentionally killed at the front desk.

More numbers: Nine out of 10 healthcare organizations and practices lose money every time the phone rings. That’s especially true in handling (and not converting) advertising generated inquiries. And with larger case sizes than our conservative illustration, the lost opportunity and unrealized revenue is staggering.

In nearly all of the real-world situations where we’ve been able to help, the problem is in the complete absence of staff training in phone skills, call handling and converting calls to an appointment. We can help you with that. If you’d like to know how serious your problem might be, or if you want to talk about how phone success training can make a big difference to your financial “numbers,” we’ll help you run the numbers.

Stewart Gandolf
Chief Executive Officer & Creative Director at Healthcare Success
Over the years Stewart has personally marketed and consulted for over 1,457 healthcare clients, ranging from private practices to multi-billion dollar corporations. Additionally, he has marketed a variety of America’s leading companies, including Citicorp, J. Walter Thompson, Grubb & Ellis, Bally Total Fitness, Wells Fargo and Chase Manhattan. Stewart co-founded our company, and today acts as Chief Executive Officer and Creative Director. He is also a frequent author and speaker on the topic of healthcare marketing. His personal accomplishments are supported by a loving wife and two beautiful daughters.

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“Despite practicing in a hyper-competitive market, our new-patient counts are double what they were for the same time period last year. Hiring Healthcare Success was one of the best business decisions I have ever made.”


– Jonathan Calure, MD