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Boundaries and Targets of Demographics

March 07, 202322 min read

When I first started doing demographic and site analysis reports for doctors nearly 40 years ago, the art and science of this analysis were still pretty primitive. Things have changed in fairly significant ways. This includes the ways that we drew practice boundaries and interpreted the data.  This session talks about one of the BIG changes that have occurred: Zip Code definitions and drive times. Another big change is the inclusion and interpretation of psychographics. 

This is one of the most significant episodes of the process of analysis of Zip Codes we have done in years. You don't want to miss it!

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Read the Transcript Here: 

Hello, this is Scott McDonald of Doctor Demographics, and today we're gonna talk about targets and boundaries. Now I'm, I'm bringing this up because many of you are ordering, uh, reports to do, uh, with a particular site.

I want to explain how this is determined and how to interpret what information you're receiving. Uh, Ultimately you, you probably understand the idea of having a target area that you're going to be covering and uh, that makes perfect sense. However, there are some people who are making some mistakes as to how to interpret what they're getting.

So let me help you.

Now, I don't wanna say I'm the only person who understands practice boundaries and borders, how big they ought to be, and how many people they should [00:02:00] contain in order to make the practice site you're considering viable and desirable. , uh, there are other people who do it. However, the truth is, I think I defined most of the rules people are using on that.

So let me explain how I came up with them and what you want to know about it in order to say, yes, this is as a viable site or it's a good place to go, or not, not so much on that one spec, uh, specific site, but rather, uh, the fundamental principles that you need to follow. now, when I started doing demographic reports for doctors and, and I hate today, this was close to 40 years ago, I was asked if I could break out the data into, well circle radio in miles.

So somebody had said, you need to do one, five and 10 mile radius around a a practice, and you should judge by that. Well, [00:03:00] The, the science of demographics has improved a lot since that time, and vendors are much more realistic about the metrics that they're using to make the case. Is the place viable, desirable or not?

And how should we promote the practices if we go in there? Now, this is not true of just any, uh, healthcare practice, but eh, well, Generally what I've done is I've taken the data that's available and interpreted it based upon the different, um, practice types and their priorities. Now let me back up and say, these radio are usually expressed in concentric circles where the practice site is in the middle of the inner ring.

That at least that's what everybody has always thought. Now that makes sense. I, I think, [00:04:00] but rather than circles, for the purposes of healthcare practices, we need to consider a different way of defining the boundaries. It's done by drive time. After all, you see, patients will only travel just so far to a general practice, and I've calculated just how far that will be in rural, suburban, and urban areas.

In urban areas. For example, people are less willing to drive any kind of a distance or to travel on public transportation as far as they will in a, in a rural area or in a. Now I've calculated just how far that is for rural, suburban, and urban areas, as well as the optimum distance for each type of practice.

And I, I say that, uh, optometrists have a different distance that people are willing to drive. The same [00:05:00] thing is true of dentists. Same thing is true of physicians now for specialty. The distance may be further. In other words, people will travel further to get to, uh, a specialty practice. Now, once again, there are several variables that influence the typical and optimum distances that people will travel.

So if I'm doing a demographic report, I need to, to match the data with the radius around the practice site to make sure it's real. , and that's not an easy thing to do. I just have years of doing it. Now we know that people do not limit themselves to circle areas, so they don't look at a one mile, five mile and 10 mile radius.

They're looking at other factors that regard how to get to a place, and I'll talk about those in just a minute. You see, roads are not set up in circle areas. [00:06:00] We have to. Well, consideration of other factors to look at practice boundaries, uh, and their targets. The density of the population, the amount of growth, the amount of competition in that area all matter.

See, you need to know certain facts that most people will kind of forget, and it will be very helpful to determine the likelihood of success and making a lot of money in the.

Now, I mentioned you need to consider not circles around the, the practice or the office that are concent. Uh, ideally you're looking at a drive time map. Now, I've got on the screen right now an example of what I'm talking about. So a five minute radius is a fairly, uh, small geographic area. and the 10 minute and [00:07:00] 15 minute radi, they're very important to know.

But remember, it's in terms of the time it takes to get to the location you're looking at, ultimately you're, you're going to, well probably notice that this doesn't look like a circle, it looks like an ameba. And that is ultimately the fact you want to, to kind of keep in mind where people come. There are lots of reasons why this looks this way.

The speed limit is one, because if a road is easily traveled at a certain speed, the radius expressed in time is going to be better. By the way, we call those ISOs, time, distance measure. Now we never wanna waste time and money on sending messages when instead of the term message, let's talk about flyers or [00:08:00] advertisements to people who can't or won't use your services.

Uh, . Sometimes potential patients are just too far away and sometimes their demographics are, are making it unlikely that they're going to want and need you. Well take for example, people who are, um, really, really poor or lack education. You see, these are factors that you have to fight against to build a practice up.

As an example, um, some activists and, and I'm, I'm being just a little tongue in cheek here, uh, believe that men can become pregnant and bring a baby to term. Uh, and if you are an ob, B G Y N, uh, there may be people who say, yes, you gotta help me as a man, get pregnant. But we know that there are very few men who get pregnant, if any, [00:09:00] and.

it is likely that there is not a sufficient demand for a male-only ob gyn to make it worth specializing in that field. Now, I suppose there's some places that male, uh, patients who want to become pregnant will demand those services, but I'm not gonna bet on you. See, instead you want to focus on women and childbearing years.

and that makes a lot more sense as a practice focus and as a target for the OB G Y N practice. As you can see on the previous slide, the various DriveTime radio resemble AVAs, and they're not smooth boundaries, and that's because of topography and other factors like speed limits that cause uneven boundaries on the outs.

These factors will be vital in determining the [00:10:00] viability of the practice. Site. Data that is included shows the population in each drive time radius. As I showed you, the A analysts at Dr. Demographics can present these factors and interpret them for you based on your needs, given your type of. If a more convenient location is available, now we can make, um, recommendations on their viability.

But here's something you have to understand. A person will go to an orthodontist. , but generally they don't, they don't want to travel very far because in the course of treatment you are doing several visits to the orthodontist. Now you are not gonna do that, uh, with a general dentist, or especially not with an oral surgeon.

So knowing something about the treatment plan, Will matter as to how far someone, uh, should put their practice [00:11:00] relative to that population center. That's kind of important for you to know in terms of practice site viability. Now there's another kind of map we often use, and that's called an orientation map.

What it shows are the major roads and the minor roads and the population centers and the competi. I can actually tell you where the competition is relative to your practice site. And I believe here I put, uh, uh, a, a flag on where a practice was that we were looking at. Now, it doesn't have a large number of competitors, but it's rather nice to know if they're putting in a new road or they're building a new development, where that's going to be relative to your.

And that is why I ask you what you want to know. But generally we're gonna give you orientation maps that [00:12:00] show competition. Not every competitor is gonna be listed, but the vast majority will. Now, it's also possible for us to create a map that shows landmarks, including competition. You see, after all the site you.

Contemplating does not exist in isolation. You might be near a shopping mall, which makes it a more desirable thing. It may be a, a large, um, place, a factory or a, or a large employer. You see these things matter, and we have to put them on a map to designate how significant they are as a factor toward the site being viable.

Now sometimes the, uh, the practices will have to be regional, sometimes local and the transportation arteries need to reflect that. These maps are [00:13:00] very useful, that for that purpose look, more traffic flowing by a practice site is a good thing. It's not perfect because sometimes the traffic may be so significant that nobody wants to go.

We want to to know how visible the building is at its signage, and that is significant as well. The area's demographics can be subpar, but if many people can easily find it and get to it, it may be a strong mitigating factor in favor of the location, may be in favor of the price that you're. If there's a freeway off ramp, that leads easily to the office parking lot, so much, the veteran.

Now, while it may not be a demographic factor, there are other aspects of the practice site, uh, that could be [00:14:00] making a, a, a practice startup or purchase a good idea. Demographics alone usually isn't sufficient to say, oh yeah, it's a good place to go. We can make the determination not only about how many people there are, but also their lifestyles or propensity to use those kinds of services that you're offering.

Now, what if the purchase price was a deal? I mean, you are. A really wise purchase and the patient base was somehow attached to another office or or facility. That can make a big difference as well all have to be weighed for their relative worth or value. Uh, it's not an easy determination that we have to make, but it is a metric that is based on.

Now this is a zip code map, and you'll notice that the zip codes are [00:15:00] almost all oriented and north-south ax axis. We always show what the major transportation arteries are as well. With this in hand, you can easily say to a lender, Hey, this is gonna be a place that a lot of people are gonna be driving by and desire, and you need to gimme the money.

Now it's possible for us to provide the orientation map that chose landmarks, competition, and zip codes. And again, what you're trying to do is demonstrate to your lender and to other investors that it's a good idea to do this. Keep in mind that zip code boundaries are based on US postal priorities, not on the characteristics of the road.

They start with a small area called a carrier route, which has identified often as, uh, having nine numbers it [00:16:00] can go higher. Uh, when I'm saying that carrier routes are like zip codes, they have an identifying number. Zip codes that most of us use are gonna be five digit. If they have a zip plus four that may go to, um, well, These are joined together, uh, as, um, carrier routes to form a zip code.

Now, keep this in mind. A carrier route literally means that's the area that is compact enough that a single postal worker can walk the route to deliver. Zip codes are almost always too large, but not necessarily because the number of people who live in the zip code is very confusing. Sometimes they have a lot of people in a square mile, sometimes very few.

Now what happens is [00:17:00] the post office will adjust the boundaries to zip codes and carrier us very quickly, especially if the zip code boundaries, uh, are showing more people living in them than before. If the population changes quickly, the post office will adjust the boundaries just as quickly. The reason that this is important for your office is to create a mailing list that makes sense to market your practice.

The contiguous zip codes are, are postal codes are coded so that a three, five, and nine digit code is what is being represented. So if they tell that to you, the zip plus four. Will be obvious, but not always. That's why I'm saying we have the databases at Doctor Demographics to help you figure out exactly who and how many people are going to live in that zip [00:18:00] code.

Um, it can be understood as a, and this is their term rational postal zone, although they're subject to change. Don't forget that because very often an area that's growing quickly will change in a. demographic data is often assigned by assigning demographics to that particular zip code by third party, uh, data vendors.

We subscribe to those. So I can tell you in any given part of the United States, how many people live within those zip codes and what type of people they are, what their demographic characteristics. Now E S R I is a vendor of lifestyle. I mean, they, they go through various facts and they will say within the zip code, and we'll take 94, 103 as an example, [00:19:00] the largest group are called trendsetters.

I will give you a little idea. Every time we do a report, we'll explain. Who the people are who live in that area and what kind of psychic graphics they have. But we'll also look at the competition rate. How many competitors in your field are there within that zip code? Uh, in this one social security set, which are usually people who are, uh, older.

Usually over 75 or 80 years old, and that makes them good for some kinds of practices, but not for others. If you look at laptops and lattes, that 19% figure, uh, that that's a fair number of people, but usually they're very well educated and moderately affluent. So knowing those things about the people who live in each of the zip codes, and we'll provide you that break.

You can make your decisions on what kinds of services [00:20:00] you're likely to offer them. Now remember, with psychographics and demographics, you're looking at age, income, educational attainment. That's what you're wanting to know. Now, I, I use the example of suburban splendor. That's one of the psyche graphic groups that E S R I puts.

and let me just read the, uh, first paragraph, starting with the demographic. The median age in suburban splendor neighborhoods is 40 years old, slightly older than the us median age of 36. I bet you didn't know that. Now, these married couples, Are families that live in single family homes with children.

They have very good credit, and most of them are white, but an above average Asian population also represented. Household growth in this segment is almost two times that of the national average. [00:21:00] I'm living in Utah and broadcasting from Utah and suburban Splendor is a dominant group. Laptops and lattes are also, if you go to Silicon Slopes, a nearby hot tech neighborhood where, um, Texas Instruments is building a new chip manufacturing plant.

If you want those kind of patients, this is a segment you want to go for and not pay so much attention to those who don't have good education or make much. Now, as I mentioned, there's a lot of information I provide on each of these households. Uh, suburban splendor have a hundred and, uh, 11, well, let's just say 111,500 houses in that category.

Now, knowing how many there are and what percentage they are, allows you to [00:22:00] market wisely, and that's why I include this in the marketing. Families in the suburban splendor segment, rank first among the home ownership. Now, I love home ownership. I think it's terrific to target, but it's not always possible in every parts part of the United States.

Uh, I, I mentioned all this because there's well, usually two pages worth of data that I include on each of the lifestyle groups. I'll even go so far as to say, given the uh, kind of practice you have, there may be special implications. So dermatologists, endocrinologists, dentists all have different priorities and this report can tell you what those priorities are.

Um, now as for how you promote the [00:23:00] practice, I can even put some ideas in there as.

Many doctors are interested in where in the geographic region the most affluent or poor, old and young, well educated or poorly educated can be found relative to the office. Now, I bring that up because the way that you promote your practice and sell your service. Matters on the geographic area that it is found in, and you need to know how this seg the, the population is divided now.

For example, I, I recently had a Dodgers said, look, I want people who make $50,000 to $75,000 a year and have a child living in the home who's between 12 and 15 years of. Now that's great For some practices, not good for others. Dental [00:24:00] implants are not really sold well for these populations, given their ages.

There are however, myriad of the services that are perfect for the population without age. Now, here's the thing. Uh, direct mail is one of the more impactful. Media that you can use. A lot of people are saying, oh, no, no. It's, uh, getting a list of, uh, uh, of emails. Well, I'm gonna say they can both do very well if you have the right email addresses and the population to back it up.

But this is in itself a kind of database report. So for $125, I can tell you roughly how many people are in each zip code or in each drive time radius around a site. That does require a lot of workforce. . [00:25:00] But from this, we can then take the data and say, this is who you should send to. It may be a computer file, it may be peel and stick envelopes.

We have several options. But the idea is you want to cost effectively, be able to take the message about your practice to the people who live and work in that area. And that's what this is all. The finished list will come usually on a computer file that you can give to a mailing house or a print in your office on self-adhesive sticker like, like the Avery levels that you, uh, labels that you see at Office Depot.

Now, I don't recommend you use that as your primary means of publicity. Usually it will mean that you have to do a first class mailing. If you use a mail house, people who process mail, they [00:26:00] can print right on the mailer and we can organize that mailer. So it will look good, but the costs are dramatically less, and I'm saying often less than a fifth of the cost of first class mail.

Uh, yes, you can do first class mail. But I don't suggest you do more than 50 of them at a time. Uh, it's a lot of work, and I don't think it's as impactful as a mail house can make it. If you need recommendations on who can process your mailing, Dr. Demographics has a list of people who can help you and we can help generate the mailing list.

Now some people have given on about bulk mail rates, but we have found there's an impact that a physical mailer will have that email, an electric mail, like uh, constant [00:27:00] contact delivers just cannot match. So it's worth your investment.

I have said in another episode, Dr. F Demographics looks at a large number of factors about a practice, site and purchase area to advise our clients whether a site is desirable or viable, as well as what, uh, Inducements you might want to be using. How do you get these people to do things? How do you move the needle as far as your marketing is concerned?

Now, I, I spoke last week about the benefits of using agenda setting and, uh, framing theory that helps make your, your marketing overall more effective. Unfortunately, there are not many people advising doctors [00:28:00] who understand those theories and we can help you. So we're gonna tell you who to mail to, how much it's gonna cost you, who can be the vendors.

We'll also talk about the inducements that you should use, and this will go not only for a mailer, but for your website and other. We do this in what we call a marketing report, and ultimately we are going to pinpoint exactly where you are thinking about going and how desirable it is and how to do it.

The reason we offer a viability study with a lifestyle, and this is the psychographic component, is that we understand that not all people are the same. They're they're favor. They favor some reasons to go and, and see your people in your profession, and sometimes it's cost [00:29:00] and sometimes it's not. There are lots of reasons why this has to happen, but ultimately the idea of using a marketing report is to make all of your marketing more cost.

You're gonna get more bang for the buck in healthcare. One size of it's all is a myth, and it must, well, I wouldn't do it. You've gotta think about what the consumers are thinking about, and this is the only scientific way to go about doing it. The point is that not everybody wants and needs the same thing from healthcare, from the people who are your competi.

Market research will help you understand what they do want and what they perceive they want. The assumption is that knowledge will attract, uh, attract the people to the practice who live in Oregon, your area by offering the right mix of services for them. But this research is [00:30:00] not often done by our, our competitors.

In fact, I had one very large competitor who. Believed that demographics and psychographics were unimportant. He sort of believed, doesn't matter, everybody wants the same thing. They want cheap healthcare. Well, there are lots of ways to interpret cheap, low cost discount, whatever. And typically they would charge a lot and deliver very little.

Now, let me go back to the big questions for demographic. Whom do you want to serve? Who do you want to serve? Who lives in the area? And how do you move the needle on the action o of action quickly? See, it's one thing to put out a message and hope within a year it will deliver for you. That isn't good enough.

You've gotta get people to respond right away, and you need to [00:31:00] ne know the key terms and inducements to make that. Now there are two reports I want to have you considered. The first is called the Quickview Report. It's a localized demographic report that probably is our lowest price report and samples are on our website and dr

But then there is the marketing report, which is much more detailed and content oriented. I strongly recommend it if you'd like to talk to. Give us a call at (800) 849-0499 or go to our Prices are on the dropdown menu. Uh, almost all these reports have samples that you can order, and we want you to be successful.

That's why this little extra effort is worth to us, and thanks so much for watching.[00:32:00]

doctor demographicsScott McDonald practice management practice transitions
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Scott McDonald

Scott McDonald is the founder of Doctor Demographics, LLC, a firm specializing in marketing analysis services and research for professional practices. The company has been serving general and specialty practices for over 30 years and is the largest provider of detailed demographic and marketing analysis to healthcare practices in the United States. Scott also runs Scott McDonald & Associates, Inc. which is the speaking/consulting arm of Doctor Demographics. Programs are offered to study clubs, component and constituent societies of organized medicine and dentistry as well as consulting firms, national vendors, and government organizations. Scott is the former Marketing Manager for the California Dental Association. He helped start organized dentistry’s first efforts in public relations and advertising shortly after the regulations of professional marketing changed in 1977. Since that time he has worked with healthcare practices and associations across the U.S. and Europe. During his career, Scott McDonald has set the standard for market research, demographic and psychographic applications for dentistry. He has written many articles for the professions as well as for national and state dental organizations on the topic. As a lecturer, facilitator and moderator for dental organizations, Scott has helped volunteer leaders in more than 200 societies and associations with strategic planning and organizational communications. In 2015 he was a featured speaker at the American Association of Orthodontics national meeting as well as the American Veterinary Medical Association annual conference. At national and regional meetings he has addressed the topics of site analysis, demographic trends, and referral base promotional activities. Scott received his Master of Arts degree from Brigham Young University in Mass Communications. His thesis was on the theories and best practices of professional practice advertising, public relations, and site analysis. He resides with his family in Lehi, Utah. Scott is the father of 5 children (and grandfather of four). He is the Past-President of the National Speaker’s Association, Sacramento Chapter. Other programs include “Healing the Breach: Broken Referral Systems,” “Gripe! Gripe? Gripe! Getting Along With Difficult People,” and “Professional Practice Persuasion Techniques and Theories.”

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Our Leadership

Scott McDonald

"Demographics is more than just facts and figures. It is the foundational story in which we develop the right strategy and plan to create successful practices over the long-term. Markets change, economies fluctuate, and internal goals differ. Our goal at Doctor Demographics is to provide you with not just the data, but experienced analysis to help you create the practice you've always dreamed of having."

Scott McDonald

Founder - Doctor Demographics

Mike Green

"Coming from a marketing background, demographics and psychographics are the foundation that all successful practice strategies are built. Knowing how to use that data in the implementation process of a practice is the difference between an average (or failing) practice and a successful practice in the same area. We've done thousands of studies over the years and have helped doctors find, establish, and market in nearly every state and situation"

Mike Green

Owner - Doctor Demographics