Category Archives: Management Consulting Treatment Centers

Marketing Psychology 101 – Pain of Discipline or the Pain of Regret?

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This principle could be applied in almost anything in life. The pain of getting an education early in life or the regret later in life of not getting an education, the pain of staying clean and sober or the regret of being addicted or in our case the pain of addiction treatment marketing the regret of having to “double down” on a marketing effort to fill the beds back up.

When you were in high school or college did you ever wait until the last minute to study for the exam? I know I did many times. The pain of discipline of studying a few weeks in advance for the exam was too much to bear, so what did we do? We waited until the night before, talk about the pain of regret! I was the classic student of using this failed strategy year in and year out.

We are now in the 2010 summer and the “party” is on, (addicts are using) meaning treatment center web traffic slows down as it does in December, I know this because I review scores of industry web site analytics every day. While I was at the NAATP annual conference and the West Coast Symposium a couple of months ago business was fairly brisk for many treatment centers even in a very tough economy and this was great to see.

I had several conversations with clients and recommend to them to continue their marketing (pain of discipline) during the flush times to keep the pipeline full. (Better yet create a waiting list). Now, two months later I’m getting stressed clients looking for leads to fill their beds, in some cases it is pure panic. When the beds are empty it becomes even more uncomfortable to spend the money to develop the inquiries that was when thing were flush. This becomes a classic case of pain of regret. Woulda, Coulda, Shoulda.

So instead of waiting until you have beds to fill to do something it is much more effective to put a plan in place and execute on it on a monthly basis. At least 10-20% of your annual revenue MUST go into marketing, online and offline.
For the Pain of Regret Folks – Fastest Immediate Results in Addiction Marketing
Here is the recipe of getting inquiries into beds immediately.

This is might be a little uncomfortable:
Step # 1 Crack open the wallet
Step # 2 Prepare your admissions staff for “incoming”
Step # 3 Set up Google PPC and run ads on Google Adwords (You want traffic, Google has it but it ain’t cheap and it requires professional skills to get it right, while you can get the traffic immediately sometimes it takes months to fine tune PPC campaigns)
Step # 4 Send out an e-mail to your list (if you don’t have a list talk to Josie Ramirez-Herndon of Recovery View who seems to have the addiction treatment’s largest e-mail list of well over 100,000 names) one of the most important marketing concepts you can do is build a list of prospective clients as well as past alumni and target mailings to each. (More on that in another blog post).
Step #5 Get a featured listing on 11,000 + pages of TreatmentCenters .Net and About Drug Rehab (These are addiction treatment pages that are the most relevant to your business)
Step # 6 Buy banner ads on Sober Recovery (probably the most heavily trafficked site in addiction treatment)
Step # 7 Buy Traffic on Google’s Content Network (You can see an example of this on the Google Ads on Treatment Centers.Net .
Step # 8 Call people in your rolodex
Step # 9 Write for Addiction Treatment Publications like http://www.behavioralhealthcentral.com/ and Recovery View to boost your visibility among professionals for possible referrals

There are several more ways to market immediately however these are the first few that come to mind and you can get some immediate results/inquiries over the next 24-72 hours.

In a perfect world we would like a steady flow of clients coming into the treatment center and better yet a waiting list. The way to do this is to build a strong foundation first. I talk about a lot of these techniques in my blog on click the link below in my bio. If you are still stuck in generating leads give me a call and we can come up with ideas together that might fit for your situation. So, I guess the pain of marketing discipline is what needs to be considered so that we have the steady results. Another way to look at it is the more people we can assist in recovery the more people we are actually helping and making the world a better place as well and helping our businesses grow.

Here is a short video from a regular automobile professional guy, Jim Kristoff talking about the Pain of Discipline and the Pain of Regret. A quote from the infamous Jim Rohn, “We must all suffer from one of two pains: the pain of discipline or the pain of regret. The difference is discipline weighs ounces while regret weighs tons.”

My Bad Experience in Marketing – Hire Professionals

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In addiction treatment marketing it is all about testing. Do what works and do more of it, and do it better than you have before. If it does not work, do less of it or cut it all together, or make some major changes so you can test and track it. The name of the marketing game is testing and tracking. If you aren’t able to measure what you are doing, get help fast, really fast.

Over the years we all have probably had a few bad experiences in marketing. I’ve got a story that is about 20 years old so I feel OK about publishing it now. When I was a print broker (I bought and sold large printing contracts in my own company, Peake Graphics, Inc.) I had several large clients one of which was a large pharmaceutical client, household name. They gave me an order of 72 Million coupons to print for them, or 36 million each of 2 versions.

The client and I flew out to the Midwest printing plant and did the press check which was standard operating procedure. I “managed the client” and the printer “managed the press run.” Needless to say this was a lot of paper, more than you can fit into a single 18 wheeler tractor trailer. The client was focused on “print quality” things like color and registration. I was focused on things like getting the client signature and flying back home to New York.

The printer furnished us the “blue line” which is a technical term for “this is what you are going to get before we print it do you want it?” (Once a client sign’s off on this, they own it). Sure thing, the client signed off on it and I was half to way planning my next flight home. The client was so focused on the color (which really didn’t matter because this was nothing but junk mail and not an annual report) he forgot to take a look at the “whole coupon” and actually cut it out of the sheet (and so did I) and was not focused on the “other side of the sheet or the coupon” that he approved the blue line. Long story short, the one version of the 36 Million coupons did not back up correctly the artwork was flopped, hence we created another 36 Million $0.35 coupons unbeknownst to us. But we got the color approved and flew home, meanwhile the presses were running at 1,800 feet per minute. So we had 108 Million coupons being run instead of 72 Million.

For me as the print broker I had only run about 100 jobs before this so I was not the most experienced, but I had all the right intentions, get the client to sign and I was going to see a pay day.

Back in New York, I got the call the next day. “Jim, are the presses still running!?” Yes they were, 24/7 these big web presses never stop unless there is a web break, many of the plants I ran in were 365 day per year shops, forget about seeing your family on Christmas Day. He shouted to me “stop the presses!” (He never used foul language, I definitely would have). I called the plant and told them the problem. But it was too late. 85% of the job was run and in the bindery being cut and ready for shipping to the fulfillment house. Meaning, what the client signed off on was now owned by him. We now have a huge headache on our hands managing the coupon clearing houses in El Paso, Texas some coupons with barcodes and others without and politics of the client and not to mention the $100’s of thousands in dollars lost. (BTW, I still kept the client after this project).

I bet many of us can relate to a similar SNAFU probably just not to the same magnitude, please share some of your own stories in the comments below. In 2006 as I was building my own internet publishing business called My Success Gateway I made many similar mistakes but this time as the client. I wanted PPC for my web products; I wanted SEO traffic for my web site, etc. I hired 3 firms and each time it was a total disaster, I mean financial disaster. I’ve made all of the mistakes that I still see clients making every day, I’ve been there and done that and watched Google vacuum out as much as $4,000 in one day on a single PPC campaign which netted me nothing but a goose egg. The numbers actually get worse but I really don’t feel like going there, I think I’ve made the point.

The Secret of Letting Go

I had to let go of the past. Do you see any parallels here to drug addiction treatment? (Guy Finley, my mentor wrote a book called “The Secret of Letting Go” a fantastic read). I finally figured out that if I was going to hire someone I was going to have to know what the heck I was doing and know what were the right questions to ask. I had to learn this business for survival, because I was not about to enter the oil business, as I had an opportunity to do so and live the rest of my adult life on the road. One of the things I realized was, many of the vendors I found didn’t know what they were doing, however they believed that they did now what they were doing. So they weren’t really trying to dupe me, they were just as clueless as I was which was a really bad combination.

I’m an experiential learner so sitting in a classroom was not going to do it for me. I had to learn from people who actually knew how to do SEO. I stopped doing PPC because it was just too tedious and I had a couple of friends who were masters at it and I’d just use them because for their monthly fee to manage the campaigns it was much safer and cheaper. My point here is I took the time to learn SEO and to be totally honest it is not that difficult. I can teach someone the full basics of SEO in an afternoon.

So in my Internet Journey I’ve had to really learn how to master Internet Marketing, I have spent a lot of time and worked with the very best to master my craft. As a client, I had to learn it or else I was screwed. I realized this as a consultant. My clients must be coachable and trainable and learn how to do this as well, if they are going to get the optimal results. My whole premise is that I must be able to “teach” my clients to fish for themselves. If I do my job right they will become better at this than I and hopefully refer a few new clients along the way.

Do Your Homework and Hire Professionals

On the flip side there are just some either lazy or unscrupulous folks out there who are looking to make a fast buck. I found a company the other day that was marketing themselves as a “Google Certified Company.” I asked my friends at Google, “is there such a thing?” Answer, NOPE.

They can rest assured they might contacted by Google about this “certified company” practice because there is no such certification, usually it is a death sentence in Internet Speak. I can also tell you that every day I am still learning, no one knows it all. What I can tell you is that if I don’t have an answer for it I probably know where to go get the answer, we all have that ability.

So where do we go from here? We chalk up all of our bad experiences to our “informal education.” Probably more expensive than a Harvard Education, but hey, at least we now know what NOT to do. Here is a good question to ask your internet marketing vendors if you are seeking to grow your business. “How many leads in the drug addiction treatment space did you generate last month?” Ask to see some of them. If you like their answers hire them, if not keep searching for the right folks otherwise you will be paying for their education and yours. If they change the subject or go off on another tangent bring them back to this question if you are looking for results, do not let them off the hook.

Finally, I’ll leave you with one of my favorite quotes. “If you think it is expensive to hire a professional, wait until you hire an amateur.” Red Adair

Adwords Blame Game

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After coming back from the West Coast Symposium and NAATP one of the things that came to light was the blame game. Treatment Centers blaming other treatment centers for their internet practices like buying keywords on their branded names, which is legal according to Google. I can buy a Google Adwords keyphrase that has the name of another treatment center. What I can’t do is use their NAME in my Google Adwords Ad. (In most cases)

So let’s set the record straight. Stop blaming and start learning. I picked two keywords “beachside” and “mountainside” since they are both descriptive and could both appeal to a treatment center customer. When I punch them into Google you will notice Promises.com comes up first on the example below.

Why? Because they bought the keyphrase Treatment Center. They did not buy the name Beachside Treatment Center. Notice how Google highlights the two words Treatment Center. If you don’t like this practice call Google and complain to them and stop blaming and accusing. They set the rules, Promises or any other paid Google Adwords treatment center does not.
Now if you really want to have some fun type into Google Jo Blow Treatment Center, or better yet Cancer Treatment Center. What do you get? Do you get SOMEONE trying to rippoff their names? Hell no!

The same thing happened to Apple.  They bought the keyphrase Games and Apps and their PPC ad showed up for Sex Game Apps!

Want to Sell Your Drug Addiction Treatment Center? What Are Investors Looking For?

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Here are some of the things to think about when preparing your business for sale, and some of the questions you might want to think about and be prepared to answer.

Why are you selling? Make sure you have a clear, consistent and coherent answer. Are you just looking to unload and make a fast buck or is this something that is well thought out, perhaps part of your original exit plan? I can’t tell you what every investor is looking for, but in my experience, being authentic and telling them the real reason you want to sell should serve you best. Maybe you just need some additional funding to acquire the next location or add several employees. Investors look to make deals and might be interested in partnering with you to help make this happen.

What are you selling? Many treatment centers also have real estate assets, which can be a positive or a negative. Don’t rule out the possibility of selling the business but keeping the real estate and leasing it back to the new owners. In the long run, you may be better off holding the asset, seeing a guaranteed income stream, and selling the real estate down the road, in a stronger market. Furthermore, investors may be willing to pay more for your business, if that’s what they are really interested in, then if they have to put their capital into real estate that they prefer not to own. Negotiations tend to go best when you can create a win, win scenario.

Are your financials in order? The better you are managing your cash flow the faster the process will go and there will be fewer surprises in the final negotiations. In the addiction treatment center business it is difficult to manage incoming and outgoing cash especially when dealing with Insurance companies and clients who are scrambling for cash from multiple different sources at the last minute. Run a tight ship and you will be rewarded.

What is your adjusted EBITDA? EBITDA = Earnings Before Interest Taxes Depreciation and Amortization, an indicator of a company’s profitability that is used by investors to determine what your business is worth. Do you run your car or other personal expenses through the business? Do not fret. These actually qualify as “add backs” when calculating an “adjusted” EBITDA number. The new owner will not have these expenses so they can add them back to stated profits to determine the value of your business. The same applies to any owner compensation in excess of market rate for work performed, which automatically qualifies as an add-back. Careful: if an owner is not compensated on the books for work performed, this needs to be considered as well (in this case, a subtraction). In general, be prepared to make the case that your adjusted EBITDA, the amount of EBITDA a new owner would actually see, is higher then your actual EBITDA.

Do you know what your business is worth? Be realistic about its value. The days of getting 8X EBITDA are few and far between. In the current market, 5X is more likely, unless there is a compelling growth story. And we all know what has happened to the real estate market. As with any business, investors are looking for a return on their investment. The days of loose credit are over, so investors, who are putting up a higher percentage of equity, can’t afford to overpay and still see a return on their investment.

How is your clientele “trending?” Are average rates trending upwards or are you having to discount your services in order to get the clients to close? What is the average stay in your treatment center? Is it increasing or decreasing? Are you typically a 30-day program but people want to stay the extra month? Be prepared to highlight positive trends, and explain any changes that have occurred that might be of concern. Buyers are wary of centers with decreasing occupancies, reduced stay periods, or other signs of softness. Particularly when owner motivations are not clear, deteriorating business trends create the impression that the owner is looking to get out because his business is going downhill. If trends are poor, consider waiting to sell until you have some positive trends to point to.

How will the business be managed on a day-to-day basis under new ownership? Having a behavioral health or drug treatment center run itself without the owner is definitely attractive. So if you aren’t used to delegating, it might be time to start thinking about it. Acquisition deals come in many different formats and it is not uncommon for the owner(s) to stick around after the sale for a few months or even a couple of years. Depending upon your objectives, this could be a positive (extra income) or a negative (if you’re ready to move on). Willingness to help out with a transition is always viewed as a positive by buyers, but so is having a business that doesn’t depend 100% on you personally.

Should you work with a business broker or investment banker? If you are in a hurry to get a deal done, this could make sense, but it pays to use your network, ask around, and talk to buyers who may approach you directly before listing your business “for sale”. You may be able to negotiate a finder’s fee rather then an outright commission, which could be significant savings, or avoid a fee altogether if you are approached by a buyer directly. Furthermore, a discreet sale may be preferable to a public process, which can be disruptive and concerning to employees and patients. Another disadvantage of formally listing your business for sale is that if it doesn’t sell quickly, at some point the listing becomes stale and buyers tend to assume there must be something wrong with the business.

What are buyers looking for right now? Criteria may include location, size, profitability, and type of program offered. I know a significant buyer with a strong interest in outpatient treatment, methadone clinics for example. In the residential area, larger facilities open up a different class of professional buyer/investor compared to smaller ones, which are more likely to be purchased by an individual or small group of investors.

Last but not least, before you sink a lot of time into this process, make sure you qualify any prospective buyer who approaches you. Evaluating a fit is a two-way street. Make sure the buyer is qualified financially to make the purchase. I have seen deals fall apart when the pursuing party does not actually have the funding in place, and needs to raise capital or find investors in order to complete the purchase. Are you looking for cash or willing to take a note? Don’t rule out a seller note, if you can afford to take it. In some cases it could be beneficial to all parties.

In summary, there are quite a few things to think about when selling your treatment center. Fortunately, if you are dealing with a qualified buyer, a sincere attempt to work through these questions will be met with patience and appreciation. Call me if you would like to have a confidential conversation.

Jim Peake is a management and internet marketing consultant with special focus on the behavioral health and the addiction treatment industry. He helps treatment centers improve their web presence and in lead generation online as well as offline. He uses advanced SEO and PPC direct response advertising for addiction treatment search engine marketing. He also helps sellers meet buyers of treatment centers.