Diversifying Referral Streams

Build a More Valuable Practice by Diversifying Referral Streams

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Diversifying referral streams will strengthen and add resilience to any mental health practice. Furthermore, diversifying referral sources will make the practice more valuable to a potential purchaser. The goal in private practice marketing is to develop a wide range of sources for referrals. But turning that diversity of streams into a river requires a strategy and a consistent, long-term effort. Let’s begin.

A cautionary tale

Early in my career, when I was a solo practitioner, I was doing well. But I became concerned that too many of my referrals were coming from just one source, a megachurch not too far away. Now you might think that is a good thing, and it was. But I also knew that if there was a “falling out” over how I handled one client, the stream of referrals could turn off suddenly. And with the somewhat brittle theology of this church, I was never confident I would stay an “acceptable” therapist. I needed a more diverse referral network.

Not too long after this awareness grew, I moved my practice closer to my home but farther from this megachurch. And as predicted, soon thereafter, the church did change its pattern of referring. They converted to an EAP-type “assess and refer” system and then made a master list of “acceptable” therapists. I believe I would have been on the list, but I had already made my move, so I did not have to take the chance.

1. Study your own referral patterns

To diversify referral streams, one needs to develop a plan. However, we need to study existing patterns of referrals first. And this process itself requires a few steps. 

First, the practice needs to ask every new client who calls a question like, “How did you hear about us?” I recommend you ask this question on the first call and the intake forms and, if needed, in the first session. 

Second, we need to record the information both in the clinical chart and in a spreadsheet or database where one can analyze patterns. Most EMRs have a method for recording who referred. But the system only works if people enter the data. Any system will require maintenance, and that means making it a priority.

Third, someone needs to run reports and look for patterns. This task does not need to be the owner. Typically, one person will run reports, and then the owner will study them every month. 

Eventually, after tweaking the system, one will become an expert on your own referral patterns, knowing who are your core referrers. Certainly, we want to reaffirm those relationships. But we also want to be looking for potential areas of growth, i.e., potential sources of new referrals. 

The goal is to increase the number of referrers and to diversify our referral network. 

2. Develop a plan to fill in gaps in the referral network

With the historical referral information you have collected and analyzed, you are ready to develop a plan. Look for gaps in your networks in the categories outlined below. 

A. Methods that build connections to the PUBLIC

Let’s begin by thinking about the method we might use to connect to the public who might be seeking your services. 

First, consider how approachable your website is. Importantly, build your site with your potential clients in mind. Begin by defining your ideal client and go from there. Any method that lowers barriers for potential clients is helpful. Here are some relatively easy ideas to include on your website:

  • Put your intake forms online
  • Make scheduling and billing easy 
  • Add video if you want to stand apart from the average site
  • Write some blogs on niche areas where your practice is strongest
  • Make your site as attractive as you can afford

Second, when your practice is young, start your private practice marketing by spending considerable time creating the best Psychology Today profile. The payoff is enormous, and the reach of these ads is excellent for small practices. 

Third, write some blogs on topics where you have expertise. Furthermore, work on your SEO for those blogs. Developing a solid SEO strategy is not a small task but give it a try. You may be better at it than you think. 

Fourth, talk with your website designer about Local SEO to be sure you rank high when people search for a local therapist. 

Fifth, some will want to develop a solid social media presence to reach your local community. This approach is incredibly awesome if you like writing. 

Look at your referral streams and then focus on any gaps you find. Ask questions like:

  • Where can my practice get stronger?
  •  How would we implement a plan to work on those goals consistently?

B. Methods that build connections to NEW REFERRERS

Every referral source is new to you when you are just beginning. At that stage, find a toe hold and begin. The most natural place to find new potential referrers for your private practice is through your existing clients. On your intake forms, ask about who referred them and, additionally, about their Primary Care Physician. Look for new names and for opportunities to do appropriate collaboration about your joint work with the client. 

Once you have been in private practice for a while, you will get to know most of the referring people in your community. Identifying and reaching new referral people means knowing your neighborhood. When new pastors, physicians, or school personnel come to town, you want to be ready to greet them. Again, clients are your best source and will give you a heads up.

The main point here is that we always need to be monitoring for new opportunities to connect to referrers. And our clients will give us a window into who is new in the community and therefore unknown to us. Keeping an ear to the ground is one of the easiest ways to diversify referral streams naturally.

C. Methods that warm-up EXISTING REFERRERS

In another post, The five best marketing favorites in psychotherapy practice, I listed some of my favorite ways to strengthen existing referral relationships:

If we do these five, there will be more than enough referrals to support consistent growth in any practice. 

Consistently diversifying referral streams adds value

Much of what I am saying here is not rocket science. Instead, it is all about execution over time. Many small but appropriate interactions will go much farther than the big and splashy. 

Build your plan for diversifying referral streams in your private practice and stick with it. There is no question that a more diversified referral network adds stability and value to the practice. Consequently, over time, these efforts will enable the hiring of more staff who, in turn, will provide more services in your communities and advance your overall mission. Growth and stability indeed follow a diversified referral network.

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