In this age of aging, the demand for home care has risen — but in order to maximize profits, agencies in the sector must make a few simple, but key, changes.
While experts have previously noted the importance of getting creative with service offerings and pursuing various payment streams, others say finding success has more to do with attitude, sales and company reputation.
In fact, agencies that focus on these three pillars have significantly higher revenues than those that don’t, according to data in the latest Private Duty Benchmarking Study, conducted by Home Care Pulse.
So here’s what agencies need to know about boosting their bottom line:
1. Change Your Attitude
For agency owners, satisfaction with their current career in home care could mean a difference in several thousands of dollars in profits, the study shows.
Now in its sixth edition, the 2015 study — the focal point of a recent Home Care Pulse webinar — is a survey that gauges the national and regional benchmarks on finance, sales, marketing and operations of hundreds of private duty home care agencies across North America.
This year’s edition included aggregated data of 701 providers representing more than 1,000 locations.
And, according to data, there’s a significant correlation between attitude (or satisfaction) and revenue.
A survey question asked respondents: On a scale of one to 10 — 10 being highly satisfied — how would you rate your overall satisfaction level with your current career in home care?
Those agencies which responded with ratings of nine or 10 had an annual median revenue of more than $1.7 million, while those who answered with ratings between one and eight had a median of $1.4 million in annual revenue.
“My background is in home care and I loved what I did — and that’s what came first,” said Aaron Marcum, founder and CEO of Home Care Pulse, and creator of the Private Duty Benchmarking Study, during the recent webinar. “Happiness with what you’re doing comes first and then the revenue follows.”
2. Hire Sales Representatives
It might be hard to imagine adding staff members when profit margins are so tight, but data shows doing so could make a big difference.
“The median revenue is significantly greater for those who have sales reps,” Marcum said. “I understand hiring sales reps is a challenge … [but] those who have one overall do better than those who don’t.”
In fact, agencies who reported having a sales representative had an annual median revenue of nearly $2 million, compared to the annual revenue of $1.3 million for those who didn’t have this position.
3. Drive Client Referrals
Focusing on client referrals can mean big money for home care agencies.
“Too often we might focus on the professional referral side of things,” Marcum said. “We’re out there visiting discharge planners, home health companies and so forth, but we don’t have a client referral campaign in place — and client referrals are the No. 1 revenue generator.”
When it comes to driving client referrals and boosting home care profits, it’s all about reputation.
Client satisfaction data in the Private Duty Benchmarking Study shows that 27.6% of clients choose an agency based on recommendations by family and friends. Others chose agencies based specifically on their reputation (26.6%), recommendations by a “referral source” (20.8%), consumer marketing of the company (14.6%) and selections by a case manager (10.4%).
“It’s really about the reputation. If you’re relying upon your advertising and consumer marketing then you’re losing a lot of business,” Marcum said. “You’ve got to be driving those client referrals — those referral partners.”
Written by Emily Study