Dr. Jeremy Sharp (00:00)
Hey folks, welcome back to the podcast. Glad to be here. We’ve got a business episode today. We’re talking about a topic that I discussed actually not too long ago on the podcast, but unfortunately this seems to be a bit of a recurring theme in our world right now. And that is the referral recession. I’ve talked to a lot of practices over the last several months and a topic that keeps coming up is this slowdown in referrals.
So I’m going to be digging into that. If you’ve noticed that your phone’s been a little quieter or you’re getting fewer inquiries, you’re definitely not alone. Like I said, this is coming up in my mastermind groups, the Facebook community, consulting calls, other podcasts. So the intent here, this episode is not about panicking by any means. The hope is that it will provide a little bit of clarity and validation for what you are going through. So we’re going to unpack why the referrals are slowing down.
what not to do right now and then walk through some practical steps as always to get the pipeline moving again, even in what appears to be a relatively tight market. So stick around, let’s dive in.
Dr. Jeremy Sharp (01:11)
Okay, everybody, we are back and yeah, we’re going to talk about this ⁓ referral recession as I’ve started to call it. So this, I feel like this started a couple of years ago. Actually, I started having conversations with folks maybe in early 2024, folks starting to say that they needed to start marketing more or start marketing period when they hadn’t had to do any marketing, but it’s just continued and it seems to have accelerated since
the beginning of 2025. So first of all, I want to normalize this for any of you who might be experiencing it. A lot of practices that I’ve spoken to in the last few months have seen some kind of dip, including ours. We talked about this a few months ago. You know, think I’ve been pretty clear. We track a lot of metrics in our practice and one of those is incoming phone calls or inquiries.
And those have been down over the past couple of weeks and have been on a slow downward trajectory for a few months. So you’re not alone by any means. And in fact, a recent APA practice organization survey from back in 2024 actually found that psychologists were reporting an average 14 % decline in new client inquiries compared to 2022 levels, which makes sense. 2022 was like peak.
⁓ post COVID, you know, I think is the post COVID boom from 2020, 2021, 2022. This is when our practice grew a lot, to be honest. We have since scaled back, of course, but like I said, some info from the APA practice organization has shown that we’re seeing like our first, like real consistent drop since that pandemic surge and digging even more specifically for assessment practices.
In particular, the decrease is closer to 18 to 20%, particularly among child-focused clinicians, which was interesting to me on the surface, but then I realized that kind of matches our demographic and our inquiries as well. We’re getting a lot more calls for or demand for adult evaluations. Google Trends data is telling a similar story. Now I’m not an SEO expert by any means, but just pulling information data from the internet. And so
Searches for terms like ADHD testing near me and psychological evaluation for learning disorders, you know, have flattened or dipped in a lot of U S regions since spring of 2024. So this is just matching and supporting the story. I think that I’m hearing anecdotally from a lot of practices. So if you are seeing fewer calls or emails, it’s not you, you did not likely do anything wrong. It’s just that the tide is shifting a bit.
and I would like to talk about why, of course. for me, I’ve kind of identified like five different things that might be contributing to this slowdown based on just national data, conversations with practices, that kind of thing. The first one is just economic compression, I guess you would say. This seems to be the most low-hanging fruit, I suppose, like the easiest explanation or the one that feels most obvious. So what’s happening here, I think,
We all know even though the economy is growing, theoretically, the stock market just keeps going up and up and up. There is a tightening because things are also getting more expensive. So budgets are being looked at really closely in families, I think. So there’s a 2024 Federal Reserve report that showed that household discretionary spending is down 11 percent year over year.
And I think essentially what that means is that, families who would previously consider paying out of pocket for testing, that feels like a aspirational expense or like a someday expense rather than something that you will just shell out for. And again, especially, you know, private pay is feeling the hit here. We’re also seeing some insurance slowdowns. Again, speaking personally, we have seen increased pre-auth hurdles.
and limited coverage for some testing that was previously covered in full without any pre-auth. And again, I’ve heard this from practices around the country too. we’re kind of, you know, everybody is getting squeezed, you know, and I’ve had some conversations with insurance carrier representatives and they are saying as well that from higher level leadership, they’re really an, you know, entities, you know, they’re being evaluated for
their own budgets and what they’re paying for and what they’re not paying for. So it’s happening all over the place. Now, the second thing that may be going on is a little bit of school system stabilization. So during and after the pandemic, schools were pretty overwhelmed, I think, and referred liberally for assessment. Now with the pandemic relief funds gone, school-based teams are back under pressure to do more in-house.
Now, I am not the expert here. There are folks who may be listening and you’re like, wait a second, I don’t agree with that. That could very well be true. Let me know if you find better data around this. But some data from NASP, the National Association of School Psychologists from 2024 showed a 12 % decrease in external referrals to private psychologists as these districts are reabsorbing their testing responsibilities. Third thing, market saturation might be going on.
So this seems crazy, again, this seems crazy, but digging into the data, it’s funny what emerges. So testing psychologists have grown in number, especially post 2020. right. So some folks are pivoting to assessment for stability. I’m seeing this a lot in my pre-consultant calls. I’m getting a lot more inquiries from folks who want to add testing who previously weren’t doing testing.
So this is a good thing overall. mean, I think access is really tough and there are still very long wait lists out there, but it means more competition in local search results. So in dense Metro areas, for example, the number of private practices advertising testing services has reportedly doubled since 2019, which was kind of wild for me to hear that. What else? Another factor, the fourth factor is referral fatigue and provider turnover. So,
You know, we get referrals from other places, right? Pediatricians and schools and therapists. So these are kind of the bread and butter referral sources. And those folks, I think are pretty burned out at this point. And when people are overwhelmed, they may refer less or just forget and have fewer cognitive resources to dedicate to sending folks our direction. And then the last thing is kind of a shift in search behavior. So this is a little bit of a
sneaky one I think. Families are not always searching the way that they used to. So AI assisted search tools like chat GPT of course and perplexity which is more of a browser based AI are kind of quietly changing the discovery patterns for our services. So if you’re not optimized for those you might be more invisible in newer search environments which is a little bit alarming.
I don’t like that. But teaser, we will talk more about that in an episode. Let’s see, will it be later this month? In a few weeks. We’ll say in a few weeks. I am losing track of my content calendar a little bit. just say in a few weeks, we’ll be talking about how to optimize search for AI. OK, so I talked at the beginning. We’re going to discuss what not to do in this situation.
Now that we know what’s driving the slowdown, we can talk about some common traps that I’ve seen practice owners fall into during referral droughts. The first is panic discounting. What does this mean? Dropping your fees to, quote unquote, stimulate demand rarely works and often backfires. Price signals value. And if you suddenly undercut yourself, referral sources notice. And I don’t think it necessarily brings more volume.
Now the caveat to this and I’m totally stealing this from my friend Julie Harris’s podcast Julie’s CEO of Green Oak accounting has a podcast therapy for your money. And she said that if you were in a true like back against the wall situation where you have to start seeing clients to like make payroll or pay the bills at home then you may consider dropping your fees temporarily. That’s sort of the asterisk with this.
first point in the discussion. The second trap, ⁓ throwing money at ads without strategy. Google ads and Facebook campaigns can help, but not if they are unfocused or poorly conducted. I’ve said this a lot on the podcast that it’s really tempting to jump in and just run some Google ads or run some Facebook ads, but you can easily waste a lot of money. did this 12 or 15 years ago. You you just jump in and like spend
potentially hundreds of dollars a month driving traffic to pages that just don’t convert instead of sending them to actual optimized landing pages. And that’s if you even get the right ads out there and get people clicking on ads. So if you don’t have clear tracking in terms of cost per conversion and call tracking, lead source attribution, it’s basically just gambling. So don’t throw money at bad ads.
The third and last thing I’m going to talk about here in terms of things you should not do is over diversifying too quickly. What does this mean? It might be tempting to try to add services to your practice to diversify and increase your income. So I’m talking about things like tutoring, coaching, therapy services, that kind of thing when testing dips. Sometimes this is smart. Often it can be reactive.
So the question isn’t, can you add services? It’s whether they align with your brand and whether you can sustain that new complexity. Not to mention the startup of any service like that is going to be relatively lengthy. It’s not an overnight thing. I am doing an episode later in the month or in a few weeks.
to address whether to diversify your services or just double down on what you’re doing. So with all that said, let’s pivot to what does actually work because I think we have more control than it feels like we do in these situations. So what are some short-term tactics to kind of bring your referrals back to life? Number one, re-engage your referral network. Okay, this is a tough one. So.
This is almost the first, it’s almost always the first thing I tell people when they say I have not had to do any marketing in a long time. And it’s almost like a resistance to marketing, but this is huge. So you go back to your contacts and find the folks who have been pretty consistent for you over the years. Maybe you’ve lost touch with them. Maybe you have not kept in close contact, but this is a great time to send a quick personal update to
you know, school psychs, pediatricians, other therapists, psychiatrists, tutors. Hey, just checking in. We’ve had a few openings come up for evaluations this month. Let me know if you have any families who might benefit. It could be super simple. It can be an email. It’s not desperate. It’s professional. And it just reminds them that you exist. I want to bookmark this as a potential topic to discuss in more detail in
in another episode, just the idea that we are so overloaded right now with information coming at us from all different places that applies to everyone. OK, so it sort of gets back to the component I talked about in the very beginning of the episode, as far as the cognitive resources that our referral sources have. Like everybody is probably pretty overwhelmed right now, whether it’s with business stuff or just personal and social media and news and all the things that are flying at us every day.
So you just, have to stay top of mind for people and don’t be hurt if they have quote unquote forgotten about you because they have a lot going on in their own lives. Okay. Second option, simplify your intake path. This is a great time to go through and look at how much friction is present in your intake process. So a simple way to do this is just to go and pretend to be a client and check
how many clicks or forms it takes to request an evaluation. If it’s more than one page, you are likely losing people. cognitive resources are in high demand right now and low supply. And people are counting their cognitive calories, I think, pretty closely at this point. So just to back this up, research from HubSpot, which is a really popular CRM, this is back in 2024.
I only imagine it’s gotten worse, shows that conversion rates drop by 28 % for every extra form field beyond six. Okay, so what does that mean? Let’s make that very practical. Name, contact information, reason for seeking a referral, and maybe preferred times for contact. And that’s about it. This is one that really hits home for us because we have a pretty, what would I call it, lengthy screening form.
before anyone can even book an intake phone call and to get scheduled. And this is something I’m definitely going to be looking at for our practice. All right. Number three, optimize your Google business profile. Okay. So just make sure that your services are clearly labeled as psychological assessment or ADHD testing or autism evaluations, whatever it may be. You can treat Google business like a blog almost. So add fresh posts weekly.
consistency is going to help. It’s going to boost your visibility far more than just reviews alone. And this also speaks clearly to those of you who’ve had some negative reviews and want to maybe downplay the effect of those negative reviews.
Okay, the fourth thing, if your referrals are down, especially if you’re a smaller practice or a solo practice, my guess is that you’re going to have more downtime than usual. You can use that downtime for outreach. Okay, use your downtime for outreach. If you have a team with lighter caseloads, you can make this kind of a team project to like write blog posts or record short little videos that you can put on your website or brainstorm ideas for
outreach to the community like a school Q and A or lunch and learn with pediatricians or something like that. If you’re lucky enough to get one of those appointments, like a lunch and learn spot with a pediatric office, that can just, I mean, that can really open the floodgates to referrals. Okay. And those connections will just compound.
All right, what else? Let’s transition into more long-term strategies. OK, we just talked about short-term strategies. Let’s do long-term stuff. so the practices that get through the slow periods best are typically the ones that have built very robust, marketing systems before they needed them. OK, so these are some of the things I might call like pillars of a sustainable referral engine, so to speak.
⁓ number one, I’ve talked about this a million times, relationship marketing instead of transactional marketing. Okay. So referrals come from trust. You can go through, you can identify your top 10 referral partners, doctors, schools, therapists, whatever, and nurture them year round. Okay. So I’ve talked before on the podcast, I try to get together with, ⁓ all of my close referral sources who at this point are now, you know, friends, at least quarterly or.
every other quarter. So you can send little notes, you can get together for coffee or beers or lunch. You can keep them updated on your new services. And even if you want to like invite them to case consults or offer to, you know, deliver your own consultation. So this is shocking to me, you know, but I love data and there was a 2024 survey from
a physician oriented site that said that 81 % of healthcare referrals are still happening through personal relationships and not ads or social media. So those things have their place, but I think relationship marketing goes a long way. All right. The second thing is producing content that educates and positions you as an expert. So what does this mean? Parents and professionals refer to people that they perceive as credible and accessible. So you can do short
educational content, again, blogs, podcasts, videos, all of those things are going to contribute to building credibility. So even if you just post like once a week asking or answering common questions like when do I pursue testing for ADHD or what is ADHD or why does my kid not look like they have ADHD at home, but they do at school. you’re both like training the search algorithms, but
also humans to think of you first, you know, that’s going to pop up in search engines and the word is going to spread. So it doesn’t have to be overly complicated, just produce easy content that people can consume. Number three, list building and nurture marketing. This is a tough one I found for a lot of practices. Like it’s not normal or natural maybe for us to build an email list.
for our practice marketing. email’s great. An email list is really powerful. You can do this with any number of platforms, know, ConvertKit or MailChimp, which is what we use, or Kajabi. You can, I mean, you know, it’s easy to like add a few email addresses every week to your list, send out a monthly practice newsletter. It would include that content that I was just talking about. You’re just sharing insights, your assessment updates, maybe you get a new test.
⁓ anything like that, just keeping, staying top of mind for folks is huge. So don’t discount that. And, ⁓ sometimes people will say, I don’t want to be, pesky or whatever. or, you know, bother people, but if it’s really, if it’s actually good content, mean, don’t pump out trash, you know, but if it’s good content and there are tools out there to kind of figure out what people want to learn about or hear about.
If it’s good content, then it will go a long way. right, number four, long-term strategy. Leverage your existing clients. What does this mean? I think a lot of us probably know that satisfied clients or families are the best marketers. So if you’re not doing some kind of like post-evaluation follow-up with them, you could totally do that. So it could be as easy as like quote unquote, if this evaluation helped your family,
I’d love if you shared our name with your pediatrician or a friend who might benefit. Again, super straightforward, not pushy. I think it’s owning what we need and making it really clear that referrals drive our business. It’s more of an invitation than anything else. And hopefully it comes across that you are grateful. All right, number five, strengthen your search engine optimization foundation. This is a long-term strategy.
So we’ll dive into AI optimization, like I said, in an episode in a few weeks, but classic search engine optimization still absolutely matters. So this was, you know, basic things like make sure you have dedicated service pages for the different types of testing you do, like ADHD or autism or learning disorders or twice exceptional, whatever it may be. Make sure you have location pages for the places that you practice or the place you’re located. And then
you know, using authentic, like plain language descriptions of your process so that it’s easy to read and consume.
All right, so we’re going to start to close here. I want to use this time to maybe reframe the slowdown a little bit and hopefully give you a bit of a mindset shift to take with you. So a slower referral season doesn’t have to mean failure by any means or any kind of negative thing. I know it’s easy to go that way for a lot of different reasons. We have a lot wrapped up in being busy.
ego, certainly financial security. These are just to name a couple of things that go along with getting plenty of referrals, but a slowdown can also mean, buffer time or margin or space. So what do I mean by that? I mean, this could be your time to audit your workflows and your templates and your SOPs. You can invest in continuing education and staff training.
You can build new professional relationships. And then you can also implement, you know, an automation that you’ve been putting off. You can test new software. So, when things pick up again, and they will, you’ll be operating from hopefully a stronger, leaner foundation that is more solid, right? And for me, this is especially important because doing these things gives an element of control. And that’s always the worst part about
slow down so that it can feel totally out of control, right? Like why aren’t people calling? It’s like, you want to go out in the community and, you know, just like stick your phone number to people’s foreheads and that kind of thing. Like call, promise I can be helpful, but doing these things gives you some control and action items that will actually help your practice in the long run.
Something I learned very early on from an older colleague is that referrals are always, always cyclical. demand does tend to dip in late summer and early winter, and then it’ll surge again after the holidays and in the fall. So there are definitely cycles to what we do. And I’m not saying that this is a consequence of a specific cycle necessarily. I think it is part of a bigger pattern. But.
referrals do tend to be cyclical and it’s just part of the game. know, it’s part of being in private practices, uh, weathering these storms a bit. So if you keep showing up consistently, the referral recession, as I’m calling it, will pass. And I think you’ll be positioned to grow faster than those folks who panicked and threw money in the wrong direction and, and, or just sort of hid or went dormant during this time. So
I think that’s the big picture. ⁓ yes, referrals are down in many places, but I don’t know that the fix is complicated. It’s, you know, consistency and connection and clarity, which are things that we’ve talked about on the podcast for a long time. So, happy to have you here as always. ⁓ until next time, just stay focused, stay curious and keep doing great work.
Prefer to listen to the episode? Click here.