48: The Role of Data in Building a DSO

Welcome to DSO Secrets. I know what it's like to be an entrepreneur in the dental industry. I've had my ups and downs just like you. There's so much opportunity to be excited about, but so few resources to get answers. From here on DSO Secrets, we get you those answers so you can change the lives you're meant to bless and achieve your personal success.

When I was working as an associate, right at a school, I never imagined I could own these many practices with this amount of support. So thank you.

You have helped build my marketing mind

to a whole new level.

You have this natural talent, this unique ability. Hello everyone and welcome to another episode of DSO Secrets. I am Ken Kaufman, your guest host today, filling in for Emmett Scott. There is a common challenge that we all face in trying to build the dso. And by the way, people in other industries face very similar challenges. You have either already faced this when you've tried to add an associate or add a second or a third location, or if you want to go down that road, you will face this challenge. And let me start by explaining it this way. When you start a dental practice that you own and that you are the, the full time provider in, you know everything that's going on in that business, you know all the employees personally, in fact, you might be related to some of them. You know all of the patients, you might be related to some of them too. You know all of the vendors because they're all showing up excited that there's a new practice and a new dentist that has a vision and wants to, you know, do a great job. And so they're all showing up and wanting to get to know you and sell you product. So you sign all the checks and it's likely your personal credit card that you're putting those business expenses on to earn rewards and cash back. And nothing wrong with all that. This is very normal for a small business. When you start a small business, this is very commonly what happens. So you're in all the details and all the aspects of your dental practice or your business and you're running your day to day operation primarily on what we call qualitative data. So you hear an employee say something, a patient makes a great comment about service, or maybe they are frustrated by something that happened. Vendors start talking to you about things that trends that are happening in the industry and new products and new ways to take on procedures. You are being bombarded with qualitative data. Nothing horrible about this, but there's a lot there to sort through and some of it can cause some Pretty dramatic emotional reactions and some kind of roller coaster emotional up and downs of business ownership. You gather up all this qualitative data through all these interactions throughout the day. And then when you run or look at a report with some quantitative data, you usually can quickly parse your way through and determine what the report's saying, because you know all of the details behind whatever numbers you're looking at or you know whatever summary data that's been put in front of you. And there's nothing wrong with this. Small businesses all around the world operate this way very similar fashion and they can be profitable and successful. If you ever, however, want to add an associate or, or add a second or a third or more locations, or you have this vision of becoming a full fledged DSO at some point in time, it will be very difficult for you to run your business only based on qualitative inputs. You will at some point have to rely more and more on quantitative data and less on qualitative data. Although there's a place for both and we'll talk about that. So let me just give you a couple of examples to help you concretely understand what I'm talking about here. Let's assume that you currently have 10 practices and you are doing the best you can to try to run them. And you've started to hire some support team around you to try to support these practices and make sure that everything's going well. And then one day a patient becomes very angry with their experience in one of your locations and they write a very, very bad Google review. Well, let's be honest, this hurts. It's hard to not take it personally. You're doing everything you can to try to create a great patient experience and up your dso. And this hurts. It's kind of a kick in the teeth or a punch in the gut and it's, there's an emotional reaction to it. This is, I want to be clear, a qualitative input, meaning it is a single opinion of one very loud, disgruntled patient. But it wouldn't be uncommon for us who care about the businesses we're trying to build to lose sleep on this, to stress over it, maybe worry, are all of our patients going to abandon us now? We could make knee jerk reactions like, oh, we better lower our fees so that if patients are thinking about leaving, at least we'll be the cheapest and so we should definitely lower our fees or wow, that staff member that interacted with them, I should really fire them because it's their fault they created this bad experience. If I get rid of that staff member, maybe that'll somehow make me feel better and make sure that this never happens again. Or, I don't know, there could be any number of other knee jerk reactions to this. But I want you to consider within the context of this qualitative data input, this one customer, this one patient who left this review on Google, and I want you to now put it in the context of all 10 locations over the last 12 months. What if I told you this was the only complaint you had? You had four and five stars with every other Google and Facebook review that was submitted. Should maybe help us calm down a little bit, start to feel a little bit better. What if the data, when we pull it, also tells us that this patient is one of the few patients within all of the patients in all 10 locations who is behind on their payment plan? And as we dig into the data, we realize that the reason this patient got upset with the employee is because the employee was asking them to bring the account current. Does this change your perspective? Does this maybe help you think about your business differently and how things are going in your business? Now, I don't want to overemphasize or underemphasize, you know, the importance of taking care of patients and responding and doing all of that correctly. That's not the point of this podcast. The point is quantitative data can help us to put in context all these qualitative inputs we get. And the bigger we get, the more we need to rely on quantitative. Now here's another example. What if you go to visit one of your 10 locations? Kind of a surprise visit. You just want to drop in and see how things are going. You walk in and you find the empty. I'm sorry, you find the lobby empty of patients. You see a few staff members huddled around the front desk having just a casual conversation, not a concern in the world. Certainly not paying attention to running your business the way that you're thinking it should be run. You walk toward the back and you see the doctor on his phone not paying attention to any patients on Facebook, doing whatever it is he or she's doing there. You then walk a little further and just next to one of the operatories, there are several back office assistants gathered together and they're debating about something. I don't know, do people debate if Elvis is still alive? Let's say they're debating that Elvis is still alive. Or insert here any other pop culture thing that people like to debate about or discuss. The point is nobody's doing anything around dentistry. Nobody's doing anything to make this practice or this business run more successfully. They all seem to just be hanging out and having a great time. Well, what's your reaction to this? For some of us, this might make our blood boil a little bit. We think about all the investment made into this practice and to train, hiring and training these employees and hiring this associate dentist and going through this whole process to create a great opportunity for patients to come. And you walk in and not only are there no patients, but the staff doesn't really seem to care about anything. Well, let's take a look at the quantitative data. And I'm just making this up, but what if you look at the quantitative data and this practice so far this month actually has the highest amount of production of all of your 10 locations. And when you look further into the data, you realize that the last couple of years this practice has consistently been one of the most profitable practices and one of the top producing practices. And you also notice that the same employees that were there two years ago are still there. So their turnover is very low, maybe it's even zero percent. It's been the same associate there. And a lot of those faces all look familiar to you. So when you take this quantitative data and start to layer it on, you might start to ask yourself, so what's, how are they so successful? How is all of this working? And as you ask and as you dig in, number one, your blood stops boiling and it starts to come down because you realize, no, something's working here and I need to just understand some of the details around it. You then go and get one more qualitative input from them, which is there's a big event in town and they knew that things would probably be slow for an hour or two in the middle of the day because there's a big distraction with some local fanfare and things that were happening and they were just kind of taking it easy. They stayed, they decided to keep the practice open in case any patients did show up. But they knew there'd be an onslaught of patients as soon as this event was done in town and, and their schedule was full and they were planning to be very, very busy into the early evening to take care of patients and scheduled treatments and recare and everything else. So I realize these are two simple examples and business is much more complex than this and there's more nuance to it. But I wanted to make them simple just for this one reason. Look at what happens to our understanding of our business and to our decision making ability when we have the right quantitative data put in front of us to then process through and put into context all of the qualitative inputs that we get on a day to day basis. The point is, the bigger you get, the less you can rely just on qualitative data. You have to start to quantify what's happening in your practices, what's happening in your overall dso, and continually use that quantitative data to put in context all the qualitative inputs, which you're only getting a very small fraction of. The further you get away from being that single practice owner and operating dentist in that single practice, single doctor practice where you know everything, you have to introduce the quantitative data. And if I was to summarize it, I'd probably say it this way. We all have a lot of decisions to make in running our businesses as we grow. The more dedicated we are to building systems and processes to deliver timely and accurate quantitative data, the more clarity we are going to have. And clarity is like a drug when you have it. It is addictive because it quickly puts all this qualitative noise into context and it empowers us to make the very best decisions possible for our businesses. Now Emmett likes to talk about how the best, highest performing professional athletes reach a stage in their careers where the game just seems to slow down for them. They see everything clearly on their own team and on the opposing team. They see all these things clearly and they execute on their game plan with patience, with precision, without losing their cool, even when everyone else around them is. That is the power of having the right quantitative data. Because these are, in the case of these professional athletes. They're trained, skilled, watched hours and hours of film and they have been through it long enough that the game has slowed down so that they can now make very cool, calm decisions based on everything that's happening in their business. But mostly empowered with this clarity that comes from having quantitative data. It's no different building a dso. The more accurate, relevant and timely our quantitative data is, the more things will proverbially slow down for us and our teams. And the more clearly we're going to be able to build a successful and thriving dso. One well informed decision at a time. Well, there you have it, the ins and outs of the balance between qualitative and quantitative data. As you build your dso, don't forget to join DSO Secrets Facebook group where you can ask questions and you can also answer questions placed there as well. Emmett likes that to be an open forum where we can all share our experiences and try to help each other build and grow from wherever we're at. It's really a no judgment zone as well. Which is. Which is a great, very safe place to be. And as I wrap up this episode, as Emmett always says, until next time, keep smiling.

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