Streamlining Healthcare: AdvancedMD CEO Eric Morgan (Part 3)

SM: How do you market to your customers? How do you get them to come to your website to sign up the first time?

EM: We have a multi-pronged and sophisticated approach. We get all of our business through a combination of web and referrals. It is split 50/50 between natural search and pay-per-click programs. I have a search engine optimization expert on my team who is continuously optimizing our website and landing pages for natural search.

We buy clicks on all the major search engines, and we use about 10,000 different key words. We also participate in a lot of online buyers guides like TheBuyersZone.com. We have a lead qualification group that takes a certain percentage of those inbound leads and contacts them within 15 minutes to qualify them. Another percentage, based on the lead, goes straight into an inside sales group where the sales rep talks with the person right away.

I would say that 80-90% of our deals are closed over the phone without meeting face to face. The exception to that is a group that sells our service to billing companies who use it as their billing and collection engine. Those deals tend to be 5-10% bigger and often involve a site visit.

SM: Most of your physician office customers are closed over the phone?

EM: They are finding us through keyword searches or pay-per-click searches.

SM: I just typed in ‘physicians office software’ and you are number two in the organic search engine result. That is pretty good SEO.

EM: There are some big key words like ‘medical billing software’ which if you search for on Google you will see us on the first page in one of the top three positions.

SM: If I have a medical office starting out, am looking for billing software, and choose AdvancedMD, what is my starting price point?

EM: There is a setup fee in the $2,000-4,000 range, which covers all the EDI work we do with the clearing houses to get physicians setup with the payers as well as the training. There is also a monthly fee, which ranges from $135 a month for a subscription up to about $400. There are also ancillary services which deal with reporting and document processing which may have some variable charges associated. The net pricing model is a monthly subscription. Currently there are no long-term contracts. People can cancel at any time. The upgrades are continuous and included in the price.

SM: What are the return rates you experience?

EM: Right now we talk about 98% retention. We have different customer segments. Due to the flexibility of our software a particular practice could add and subtract providers from it. There are different measures for churn, but in terms of pure clients we have a 98% retention rate.

SM: When I search ‘medical billing software’ on Google you are the second result in PPC; number one is Kareo, and number three is Athena Health. Help me understand how you differentiate between those two?

EM: A big part of how we set ourselves apart from Kareo is the amount of time we have been developing this software. It is very complicated software that involves continuous change of codes by insurance companies. We feel like we have a more robust platform due to our longevity. The most important differentiator with Kareo is that they have 10 people in their whole company. This SaaS business is truly a blend of people, process and technology. They might have some fairly decent technology but they don’t have people to speak of, and there is a very important service model in this business.

This segment is part 3 in the series : Streamlining Healthcare: AdvancedMD CEO Eric Morgan
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