Last year with all of the challenges of COVID, it was your best year. It says here, by the end of 2020 you increased your revenue by 75%. What’s up everybody. It’s Steve “The Hurricane.” And for today’s episode of A Drink With The Hurricane, we’re gonna talk about custom pricing for your clients based on their needs. So, raise your glass and let’s toast to your success. Cheers.
So obviously folks, today we’re talking about the financial part of the business. As we’re talking about custom pay rates for caregivers and custom pricing to clients and this is actually one of the primary focuses of My Home Care Evolution Conference. And if you haven’t been to one, I highly recommend you come. All new topics and presentations on growing your home care business. Now, custom pricing. This is something that one of my clients, Valerie, is just an expert at. I’ll never forget. I flew down to her office. I trained her office staff. As you see it in the picture here, we spent the whole day and I went over all things inquiry management and sales and closing with them. And when I was talking to him about doing his custom pricing, at first they were a little bit nervous, but then I had said how much money does a caregiver require for you to guarantee if you need a caregiver that was gonna start tomorrow? And they told me $17 an hour. And I said, okay. So if you know that somebody will take a case for $17 an hour and they will start the case tomorrow. Then that’s what we have to do. We have to charge a custom rate. And so, I literally train them how to do it. And why is this so funny? I’m gonna teach you how to do this in a minute.
But why is this so funny is I’ll never forget. As soon as I finish the training it’s like two o’clock in the afternoon. We’re about to go into a different subject. Somebody calls in needing same day start. They told the person executed flawless, like I couldn’t have planned a better day for me to be there. They executed flawlessly saying exactly what I trained them on how to do, the client agreed to it. The marketing rep got in the car, drove out there and then 90 minutes later, came walking back in the office with the contract signed. The case was staffed before the marketing rep even got back with the contract with somebody taking it at the $17 rate. And so, that’s how I know this works, all right? So what you wanna do, first and foremost is have custom pricing. Whatever your base rate is, that’s your base rate. Then, you wanna charge $2 an hour additionally, for each of these three challenges.
Number one, somebody who’s incontinent. If somebody’s incontinent, that’s a client that you will have a hard time getting a caregiver to take it. So as a result, you’re probably gonna have to pay that caregiver a little bit more money by charging $2 an hour more that will give you a cushion so that you can compensate the caregiver accordingly. The second thing is, if somebody’s bedbound. Think about how difficult it is to transfer a patient. Now, take a patient who’s completely dead weight. You all have an operations lab where you have the mannequin in there and the person is transferring the mannequin that weighs about 150 pounds. Well, that’s all good and dandy when the patient is 150 pounds and they’re a mannequin. But it’s very different when it’s a real person who’s in pain and you’re transferring them and they’re screaming, ow, ow, you’re hurting me. Ah and they’re bedbound. They might have a pressure ulcer or something else. That’s a very difficult situation for a caregiver. As a result, the patient’s needs dictate a more skilled more competent caregiver.
As a result, you charge more money for that situation. The final situation that you charge $2 an hour over your base rate for is a dementia patient. Why? Because we all know dementia patients are very difficult. We all know that there’s certifications and training specifically for dementia that we want our caregivers to take. So, if we have somebody who’s experienced, we have somebody who’s taken all of the certifications in the training and they know how to take care of a dementia patient. Yeah, you have to compensate that person more. Therefore, you should be charging more for it. And I will tell you folks if anybody has any two or all three of these things, it is $2 an hour more per issue. So, if somebody has bedbound and incontinence that’s $4 an hour more. If somebody has dementia and incontinent, that’s $4 an hour more.
If somebody happens to be dementia, bedbound and incontinent, yes, it’s $6 an hour more than your base rate. You have to know how to sell it. You have to know how to handle it from the inquiry on the phone, but you do that, you’ll be able to charge appropriately. And then that will lead you to the second part of this tip where you are now compensating for that. The caregiver that you’re speaking to maybe your base rate of paying a caregiver is $14 an hour. Like maybe that’s your base rate. Well now, they get the incontinent patient. You don’t give them the full $2 because you know you gotta pay taxes and there’s other things that go in there. Plus you may need to have somebody get overtime and whatnot. So, you wanna leave a little bit of an extra cushion.
The $14 base rate for an incontinent patient is now $15.50, a $1.50 an hour more than what they would get paid for a base rate client because it’s a more difficult case. As is goes up, you do a $1.50 for each one. So if your base rate is $14 an hour and you have a patient that has all three of those things which means you’re charging $6 an hour more, at a $1.50 an hour for each of those issues that’s gonna result in $4 an hour, additional compensation to your key caregiver. Which means the $14 an hour caregiver is gonna be paid $18 an hour for this difficult, medically complex client.
And so, again, I’ve said this so many times in all these videos, everything comes back to those N.E.R.D patients. Remember the patient with great need, elderly, who has resources, they are disabled and or has dementia. You have an abundance of N.E.R.Ds calling you. You’re gonna get a lot of people with one, two, or all three of those challenges that I talked about, which means that you’re gonna be able to offer a sliding pay rate for your caregivers when they take these cases. This will make it much easier for you to get people to take difficult cases and more likely to get experienced caregivers who will then cover the shift so that you are managing your business and keeping the business profitable while compensating the caregivers, the way they should be for handling these difficult situations.
Finally, the last thing you do, after about three to six months of doing this for all new clients coming on, you’re going to have to adjust the rates for your existing clients. I know it’s not easy. Every time I’ve ever asked somebody to adjust their rates on their existing clients, they all fight me on it until they actually do it. ‘Cause when you do it, then you can give a little bit of a raise accordingly, as I just described earlier to the caregiver working that case. That keeps the caregiver happy, that keeps them doing what they have to do. And when the caregiver and a client have a really good working relationship, that client doesn’t wanna lose their caregiver, they don’t wanna change an agency. It’s the right thing to do to compensate your caregiver. It’s the right thing to do with your patients.
And yes, I know it’s not easy. It’s not easy getting older. It’s not easy, so people have to prepare for it. This is why I teach you to get those N.E.R.D clients. ‘Cause when you have people who you know can afford the services, you’ll be able to run your operation and do the things that I’m discussing right here, right now, charging the right amount for services. It’s not sticking it to people. It’s not raking people over the calls. What it is is giving a superior service and charging a fair price. At the end of the day, your agency should be profiting 15 to 20% profits after all is said and done. The industry average though is only 7%, 7%, that’s because people are undercharging for services.
At the end of the day, it is what it is. But when you do these three things that I’m teaching you here in this lesson, in this video, it’s gonna help you to get those profits to where they need to be. Now, I talked about inquiry management. I talked about being able to sell because it’s like all easier have said than done Steve. If I’m gonna be charged, how am I gonna charge $6 an hour more? Yeah, that’s why you need to come to the Home Care Evolution Conference. I spend three days teaching you how to adapt all the things I’m talking about in these videos, so that your business will be completely transformed, so that you can thrive going forward. You won’t have caregivers calling out a shift when you’re paying them appropriately. You’re gonna get caregivers with experience wanting to work for you and your company which means you’re gonna be offering a superior product, having better outcomes for your patients who are the very people, compensating you for services. They are worth the price of the admission. Do the right thing, register for the conference right now. And I promise you, I’ll give you everything you need to blow away the competition.