The Trouble with Tribbles: Start Ups Beware

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Weird title for an article on marketing for start ups, right?  If you were a fan of the original StarTrek series you already know what the trouble might be. What I’m talking about today is the trouble with lead generation companies and salespeople.  At some point over the last couple of years, some very bad folks have moved into what is known as rehab lead gen business.  They saw the money and started flooding the market.  Many saw the opportunities created through parity laws and the Affordable Care Act; these both improved the odds of getting treatment covered by insurance. As lead gen became very profitable, competition increased, and bad behaviors multiplied.  It’s a fight to the bottom to grab an increasingly smaller share of the pie.

Patient brokers, treatment consultants, salespeople: whatever name they use, many of them follow practices that are morally and ethically questionable.  More on that in a minute. First, why are start ups so vulnerable to getting in bed with these types of companies?   Easy to answer: they want their phones ringing immediately and a lot. They want this without having to take the time and make the investment necessary to build a strategically sound direct-to-consumer marketing system.  They get addicted to the calls (most of them are garbage), and because they have most of their marketing dollars caught up in these operations, they don’t have money to invest in real marketing plans.

Impatience and unrealistic expectations lead many rehab companies to look for short-term fixes.  They spend little money or effort on the long-term tactics needed to build solid Internet performance.  Remember: if your lead gen company gets shut down by the Feds (it’s happening), your phone will stop ringing anyway, and you will have nothing to show for it.  If you consistently focus on strategic development to build your Internet presence day after day, you will not be dependent on these characters.  The cost per acquisition may seem high at the beginning, but this comes down as you build authority and reputation, improve factors that impact conversions, and focus on quality over quantity.

Here are 10 reasons you should focus on strategic development vs. lead-gen companies:

1. The results are yours.  You own them.  As your sites do better, you do better.  Your site’s traffic or leads can’t be sold to someone else who bids higher.

2. Many of the practices of lead generators border on patient brokering.  Patient brokering is unethical. Period.

3. Many lead gen companies are doing things that are not legal, such as creating secondary insurance brokerage companies perpetrating fraud  – and they are getting caught.

4. Quality over quantity Most of the calls are garbage.  If you don’t take Medicare or Medicaid, have fun with the 90% of calls that are looking for places that take Medicare or Medicaid. With higher quality calls you can staff your call center with advisors who have advanced closing skills vs. people who just churn and burn. There are so many other ways this saves you money. Your conversion rate of call-to-admit will likely be four or five times better.  Would you rather handle 1000 calls and get 50 admissions or handle 3000 calls and get 50 admissions? It’s not a trick question.

5. While the short-term cost per acquisition (CPA) may be lower than what you would have building an Internet marketing strategy, in the long run your CPA will be better if you build something of quality (plus, see #1)

6. In-house “treatment consultants” who field many of the leads generated get a performance-based bonus usually.  This means you have created an incentive to blow up your milieu.  Actively delusional? Axis II and off their meds?  No problem. Just don’t bother to tell the admissions team, collect your bonus,  and work on the next client without regard for acuity.  You aren’t at the treatment center to see the mess this creates or how it causes three or four other AMAs that week.  Length of stay is an oft-neglected variable when treatment centers are assessing marketing costs.

7. You undermine your call center’s performance.  They develop a churn and burn mentality.  I have listened to thousands of calls and know exactly how damaging this behavior is. You can’t blame the call center. Most of the calls are junk.  Most call centers have set up (counterproductive) individual rather than team bonuses.  You get a call that isn’t a slam dunk, you dump it and hope the next call is better.  You have created an environment where intake advisors are burned out and sick to death of junk calls.  They will throw the baby out with the bath water every time if they think a call will be too hard to convert.

8. Many lead gen companies have zero ethics when it comes to re-selling the same leads to multiple companies.  How about this terrible practice?  They “sell” you leads that go through their phone system. They listen to the calls you handle at the treatment center.   They collect the information on the ones that turn out to be highly qualified (i.e., really good insurance). They then call that client and say this, “I know you have been talking to X Treatment Center, but we really think you should also consider Y, Z, and Q Treatment Centers.”  Why?  Because they can sell that lead AGAIN to someone else at a premium because they now know the caller is insured.  Nice, huh?   And they will sell that lead to two or three rehabs. It infuriates the patient and, frankly, you are being ripped off.

9. They aren’t doing anything to get those leads you couldn’t do yourself with your own team.  And your own team can focus on doing it better.  For PPC (paid search) you can use demographic targeting of zip codes, for example, to lower the number of Medicaid calls if you don’t take Medicaid.  Now you aren’t paying for calls that will never convert  (plus, once again, see #1).

10.  You maintain your integrity, which is critical to building a strong brand.  You are part of the problem if you are engaging in this type of behavior.  How are you any better than these lead generators if you continually pay them big bucks for their leads?