Home care revolves around the quality of care given to clients and employees. After surveying hundreds of home care agencies across the nation, the annual Home Care Benchmarking Study has provided many findings throughout the industry. Some of the areas covered in the study include caregiver hiring ratios/turnover rates, profit and loss comparisons, and payer source percentages.
As home care has become increasingly competitive over the last five years, so has marketing a home care agency. If you’re fighting to stay competitive, here are just a few of the important details you’ll find in the Benchmarking Study that will entice you to take a closer look at your numbers.
Takeaway #1: Tracking every inquiry is a simple component to optimizing agency growth.
Success leaves clues. In the 2020 Benchmarking Study, Home Care Pulse measured the revenue for agencies who were tracking every inquiry vs. those who weren’t, all other factors held equal. The gap in revenue is obvious.
In 2019, the median revenue for those who tracked every inquiry was $2,128,000 whereas those who didn’t track every inquiry hovered around $1,658,000. With a difference of about $500,000 it’s quite evident that diligence in inquiry tracking pays off.
While numbers are important, there’s more to it than just tracking data. You need to use and strategize with the findings to achieve real results. Data doesn’t do any good if it is not being looked at and evaluated.
As quoted by W. Edwards Deming, “without the data, you’re just another person with an opinion.”
Takeaway #2: When it comes to referral sources, past and current clients are the heavy hitters.
Home care agencies are relying heavily upon referral sources. While home care agencies utilize a vast number of referral sources, there are a few that come out on top. Client referrals are one of those areas where the return on investment is huge.
Client referrals accounted for nearly 73% of revenue in 2019 for agencies who listed it as one of their two sources of referral marketing. When you get a referral from a current client, they tend to be a better fit client, stay longer, and are less price sensitive.
Clients truly are the key for utilizing referral sources and maximizing profit. These same insights are also transferrable for employees as well.
Takeaway #3: It’s becoming more expensive to acquire a client, but each client is bringing in more revenue.
As the years progress, it’s becoming more expensive to acquire new clients. As of 2019, the average client acquisition cost for an agency was $599.
While the rising cost can seem excessive, it’s important to also factor in how new clients are affecting revenue; Each client is bringing in more money for the agency.
As agencies are continuing to grow, it’s evident that lifetime value plays a big factor in their development. Customer satisfaction also has created an overall increase in lifetime value across the board.
Caregiver training can directly impact customer satisfaction. Make sure you have the proper training in place to meet and exceed standards.
To compare your agency to the industry standings, calculate your average lifetime value using this formula:
(Annual revenue for the 2019 year) / (# of client’s serviced) X (Client average length of service)
Takeaway #4: Agencies are hiring twice as many sales representatives as they used to.
According to the 800+ agencies we surveyed, agencies are hiring twice as many sales representatives as they used to. In the 2018 Benchmarking Study, Home Care Pulse found that the average agency wasn’t bringing in sales representatives until they hit 1.6 million in revenue. Now, the average agency employs two sales reps at that stage of growth.
As you are looking to expand and structure your business down the line, you’ll need to be aware that your competition is hiring more reps and hiring them sooner.
Understanding Where Your Business is At
Every business is unique and there isn’t a one-size-fits-all approach to tackling key issues. With that being said, by focusing on data and using it to improve the fabric and management of your organization, you’ll achieve results that are seemingly up to par with what other agencies across the country are seeing.
Tweaking areas of your business, whether that means tracking inquiries more diligently or encouraging referrals, will drive growth throughout your business model.
This year’s Benchmarking Study highlighted many areas where home care agencies are facing challenges and possible areas where adaptation may be necessary for your business to be sustainable. Agencies who recognize and plan for these changes will prosper.
It goes without being said, but 2020 has been a whirlwind of a year, and with the constantly evolving home care landscape, it is important to stay on top of any trends happening in the industry to improve metrics and create a atmosphere that fosters growth and momentum in your quality of care.
This blog post is related to a Digital Marketing Academy webinar focused on Home Care Sales & Marketing Trends in 2020 and Beyond, with Kire Madsen of Home Care Pulse as the featured presenter.
Available in the webinar archive as:
- Four Home Care Sales & Marketing Trends to Pay Attention to in 2020 - September 11, 2020