Will NDIS turn your organisation upside down? The answer lies in your business model (Part 1)

It has been estimated by some economic commentators that two-thirds of current disability service providers will not exist by 2020 due to market disruption as a result of NDIS. The Federal Government is comfortable with this because it is confident that new providers will emerge and many existing providers will grow to meet the massive surge in demand brought about by the doubling in size of the disability services pie.

Changing the fundamentals

Before you dive into the details of changes to your business processes and systems, it’s worth taking a step back. To mitigate the risks of the NDIS and make the most of the opportunities, you may need to make some fundamental changes to your business model. Changes to your product offering, your target market and your funding sources can all trigger a change in your business model.  In the commercial world, a business model defines how the business makes money. In the NFP sector, your business model defines how you make money, and how you achieve your mission and deliver value to your beneficiaries. Your business model defines key elements such as your target market, product and service offering, key stakeholders, distribution channels, and revenue streams.

There are some great templates and tools out there to map out your business model, including the Business Model Canvas.

What’s critical?

At CBB, when we’re working with NDIS providers, we zero in on those critical domains that are most impacted by NDIS. We start with practical questions to assess how your business will be impacted. First up, we look at your target market, then we take a look at how your service delivery will be impacted. This then feeds into your marketing and sales pipeline, a review of your financials and design of systems and processes to support the business.

In this blog, we’re going to look at your market understanding and service delivery. Next month, we’ll cover marketing and pipeline and your financials.

Understanding your market

There are five steps to understanding your market:

1  Analyse customer demographics

When it comes to analysing customer demographics, the ABS is your friend and has a huge amount of freely available information accessible via its website. You may also find some very useful information in the recently published Second Australian Atlas of Healthcare Variation.

2  Analyse customer needs and wants

One of the most significant changes in business model as a result of NDIS is that your clients become your paying customers – they (or their carers) are making their own purchasing decisions from the budget within their NDIS plan. However one of the most under-estimated tasks when understanding your market is to analyse what customers want, and identify the triggers that lead to a customer’s decision to purchase services from a provider. The easiest way to do this is to put yourself in the shoes of the customer, but avoid relying on assumptions by also directly asking customers what they want (we cover this in more detail in this month’s marketing blog). Putting your customer front and centre is crucial to the sustainability of your business model. Companies such as Blockbuster didn’t fail simply because they didn’t transition to digital quickly enough – they failed because they didn’t deliver what the customers wanted.

What would you say is the most important thing an ‘average’ customer wants from a provider? What does average look like? This would be NDIS funding of $40,000, 80 percent of which relates to one on one support from a support worker. More than likely the average customer is very interested in making sure that the support worker who walks through the door is a good match for their life goals and aspirations. The next most important things are likely to be that the support worker is reliable, friendly, respectful, and consistently delivers a quality service.

Most customers won’t give two hoots who the CEO or Client Services Manager or Quality Manager is. In a ‘customer first’ business model, you need to turn your org chart upside down and consider frontline service delivery staff as your key to success.

Let’s take a look at the spectacular success of HireUp, who’ve gone from zero to 5,000 customers in the last two years. Getting the right fit between the customer and support worker is front and centre in HireUp’s service delivery model. They use a technology platform to facilitate the matching process, but technology is only the enabler, not the end game. If you don’t agree, watch their busker video, and the last thing that Andrew says.

Analysing the overall needs and wants of NDIS participants across Australia is becoming easier as NDIA publishes more information about the consumption of NDIS services. The fourth quarter actuarial report will be published shortly and is a must-read for all NDIS providers.

3  Calculate your total prospective market size

Total prospective market size can be calculated using a combination of population data from ABS and NDIA data. The key is in determining your geographic reach.

4  Map your competitors

Mapping competitors is the easy part. NDIA publish a list of all providers by region and service type, so you can quickly determine who else is playing in your sandpit.

5  Map your services to the NDIS price guide

Mapping your current (and proposed) services to the NDIS price guide is the last and most crucial exercise, in terms of clearly defining your service range and calculating your estimated total NDIS revenue.

Service delivery

There are many different types of NDIS customer and many different ways to design your service delivery to appeal to those customers, but here are ten examples of what we have seen successful NDIS providers do to appeal to customers’ new ‘choice and control’ trigger.

  • Asking a prospective new customer in the very first discussion ‘What characteristics are you looking for in the person that provides support to you?’
  • Being able to show one-pagers (either printed or web-based) for each of your available support workers who meet the customer’s criteria, so that they can actually see who might be playing a huge role in their life if they buy their service from you.
  • Offering the customer the opportunity to meet (perhaps casually over coffee) or interview a couple of support workers that they have expressed an interest in.
  • Offering the customer the opportunity to meet or interview a couple of coordinators that they have expressed an interest in. For customers or families that really want to have a friendly point of escalation, this can be as important as the person who walks in the door.
  • Offering services 24/7, if that’s what the customer wants.
  • If an adult expresses any one of the following life goals, and taking into account dignity of risk considerations, enthusiastically embracing their wishes and supporting them toward the achievement of these goals.
    1. Get a girlfriend/boyfriend
    2. Explore my sexuality
    3. Go dancing at a nightclub
    4. Get drunk
    5. Play drums in a band
    6. Become an actor
    7. Drive a car
    8. Holiday overseas
  • Offering services via telehealth (not everyone can or wants to visit a clinic for therapies)
  • Capturing and tracking customer outcomes in still shots or short videos, rather than long case notes. Paperless is possible!
  • Recruiting more male support workers by dropping the terminology ‘support worker’ and using a different, more innovative recruitment strategy. More than 50% of participants are male but less than 15% of frontline support workers are male. Can you offer optimum matching with this staff profile?
  • Placing a higher priority on prospective new employees’ values than their qualifications or sector experience.

Where to from here?

It’s one thing to understand your market and come up with an appealing service delivery model, but it’s quite another to sell yourself and convert prospects into loyal, paying customers. And harder still to make the financials work.

There are many providers who are worried about whether NDIS will turn their organisation upside down, but by using an evidence-based approach to understanding your market and designing services, you will increase your chances of growing and claiming a piece of the (bigger) NDIS pie.

Next time, we will explore the ‘marketing and sales pipeline’ and ‘financials’ domains.

If the content of this blog has piqued your interest and you think your organisation might benefit from an NDIS health check or some strategic or practical guidance, CBB has a team of specialist NDIS consultants available to support you. For further enquiries, contact: 

Brendon Grail
Email: consulting@cbb.com.au
Phone: 1300 284 364


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