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How to Start a Patient Referral Program

In the social media age, health care providers have taken heavily to Facebook, Twitter, and other platforms in order to reach potential new patients. Others, including dentists, might opt for the old-school method of investing in local television or billboard advertising, spending thousands in the hope that blanketing a community with stock photos of pearly-white smiles will reach that small percentage in the market for a new caregiver.

Does any of it work? To varying degrees, it does. But in the realm of non-primary health care, there is nothing that provides as much benefit in relation to its comparatively small cost as a patient referral program. An active marketing strategy that relies on word of mouth, patient referral programs use a provider’s existing clientele to entice newcomers. Unlike mass advertising, there is virtually no waste on disinterested parties. And unlike social media, patient referral programs are essentially a series of one-on-one sales calls—a current patient tells a prospective patient about the benefits of visiting their provider.

“Over 50 percent of new patients should be coming from referrals,” says Xana Winans, the CEO of Golden Proportions Marketing, a marketing firm that’s worked with over 1,500 dental practices on increasing their patient pool. “If not, then you’re losing them to other practices.”

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The challenge, according to Winans, is that patient referral programs are not passive engagements like a Facebook video or TV spot. “It’s not waiting for the phone to ring. It’s not processing leads. It’s asking for them.”

If soliciting current patients for a referral sounds a little scary, it’s not—but it does take a little planning, structure, and a thorough understanding of exactly how patient referral programs work. In this four-part series, we’ll be walking you through the steps you’ll need to take in order to maximize the substantial benefits of this marketing approach, as well as how to avoid the pitfalls of a poorly-executed program.

Done right, a patient referral program can add years of income to your practice—all for the cost of printing business cards and a little office diligence. In the first installment, we’ll examine the proper definition of a patient referral program and the beginning steps to making it part of your daily office routine.

What Exactly is a Patient Referral Program?

A patient referral program is a marketing system designed for health care providers who recognize that new patients are key to growing their practice. How these programs look and operate can vary widely depending on state laws that govern incentive-based marketing—which we’ll address shortly—but in most cases, a provider will communicate to an existing patient that their office welcomes new opportunities to provide care and ask they recommend their offices to family and friends. To help motivate patients to reach out, providers will often provide gratuities in the form of sweepstakes, gift cards, discounts off future service, or other tangible “thank you” responses when that referral is converted into a new-patient appointment.

As an example of how a patient referral program might work, Winans often recommends a “two-card system” strategy at the front desk. “When the patient is checking out, the provider hands them two business cards,” she says. “One has the doctor’s personal cell phone with an invitation to call with any concerns. The second card is a regular business card. The doctor might say, ‘If you think today’s visit exceeded expectations, we’d love for you to tell your friends and family.’”

This invokes the law of reciprocity, Winans says. “You’re putting yourself out there, and human nature will have them feel like they want to reciprocate.” The ideal outcome: the patient goes home and hands off your card to someone in need of care. Dentists, physical therapists, optometrists, and other providers who have impressed a patient are virtually guaranteed to see new patients come in a result of this practice.

Before we go further, it’s important to note that many guiding or supervisory boards, like the American Dental Association (ADA), have strict regulations regarding how your referring patients are thanked. When a third party benefits financially from a provider being matched with a new patient, it’s called fee-splitting, and it could be problematic for providers who don’t take care with their patient referral program protocol. Writing a thank-you note to a patient who’s introduced someone new to your practice and enclosing a gift card is a perfectly ethical gesture of gratitude. Depending on your state, however, having a giant sign in the lobby promising money for referrals might be frowned upon.

We’ll cover this in detail in a later installment of this guide, but for now, don’t be too concerned: Many patients will want to assist matching a friend or relative with someone they believe provides excellent care with or without a gratuity. Despite this innate urge to “help” someone by referring them to a good health provider, some doctors don’t utilize patient referral programs because it feels like a sales job.

“It’s not natural to ask someone to send a new patient to you,” Winans says. “It takes practice. Some want to farm it out. That’s why it’s important to have a system in place and for employees to have a script to follow.”

A Step-by-Step Guide to Starting a Patient Referral Program

Financially, implementing a patient referral program in your practice is extremely affordable. Aside from the price of printing some literature, cards, or signage, your investment is minimal, and any thank-you gifts are only applicable once you’ve enrolled a new patient to the practice. That low risk, however, means that some practices take a more lackadaisical attitude toward their programs, making only a halfhearted attempt to realize their potential. To get started on the right track, take a look at these easy first steps:

Step 1

Treat the patient referral program like the crucial and valuable tool it is by making it a priority in the eyes of both your patients and your office staff. “You need to make patients aware you’re looking for referrals,” Winans says. “Getting signage up is important. Don’t let people assume you’re a practice closed to new patients.”

Step 2

Identify any applicable state laws or provider ethics that dictate whether you can offer gift cards or other incentives to referring patients, or if you’ll be better off sticking with discounts for the referred patient. (Generally, there are no laws or industry prohibitions on discounting services for new customers.) If you have the all-clear, consider what you’d like to offer. Some practices hand out discounts on services for both parties—a dollar amount or percentage off a cleaning or whitening, for example—while others enter names into drawings for prizes like tech devices.

Remember that if you’re prohibited from rewarding referring patients, it doesn’t mean you can’t still incentivize them into referring you. “If you give a patient a coupon for $100 off a service, they’re not likely to throw away something worth that $100,” Winans says. “They’re going to want to pass it on so someone can benefit.”

Step 3

Assign some accountability to staff. Instead of suggesting everyone try to mention the program to patients, personalize it by asking a specific team member to ask a specific patient about a referral that day. “That way, it’s not just on any one person’s shoulders,” Winans says. At the end of the week, you can examine how many referrals you’ve requested and begin to keep track of how many wind up reaching out for appointments.

Step 4

Take action. How will your office be requesting referrals? Will your reception desk handle the request, or will your providers petition patients directly? Will you hand out cards, brochures, or both? Will you send a follow-up email to your patient to remind them, or make it the first approach?

A lot of these decisions will depend on the personality of your practice, how you and your staff like to engage patients, and how aggressive you want to be in recruiting new business. We’ll be covering strategies—including best practices and pitfalls—in future installments, as well as how primary care physicians and other specialists can utilize their own referral programs. For now, keep in mind that the best first step is deciding to take one at all.

“A lot of doctors are uncomfortable putting themselves out there like this,” Winans says. “But the only real mistake is not doing it.”

Next: In part two of our four-part series, we detail some specific strategies to make sure your patient referral program is living up to its full potential.  

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