Measuring return on investment marketing
Creating an excellent marketing plan that is well monitored will help you maximise your investment. This is how to make your marketing money really work hard for you.
A few refinements to planning can make your marketing spend actually work very hard for you and give you the returns you are looking for from your various leads.
Definition of a lead is a source of marketing activity e.g., advert on the website or social media is a single lead. A magazine advert would be another lead.
5 Essential Marketing Metrics for a Dental Practice:
1. Monitoring Patients.
There are many facets to Practice monitoring of Patients. It includes some of the following points:
Data collection. The more information you collect regarding your patients the better you will be able to market to them. This is because you will be able to better understand who they are and where they like to be? It will help you to position yourself better for both internal and external marketing strategies. This includes things like:
- social media preference
- social history
- hobbies (so you can market in these places later)
- where patients socialise
- schools their kids go to
- radio stations they listen to
Type of patient. This will help you to understand the type of patients your database is made up of. Do they match your ideal patients? If not, you need to design your marketing plan to acquire the right type of patients so that you can practice the type of dentistry you wish to. Without monitoring the type of patients, you already have, you will not be able to do this.
Multiple stimuli. Another concept to understand is that most people go to a new business after they have heard of you from several different sources and initiators.
It would be ideal to know this information from each patient. Which one of these stimuli was the cause for them to come to our practice? Which one was the initiator? Which marketing activity worked best from the patient’s point of view?
However, this information would be very difficult to obtain.
So what would be great is to know what the top three sources were? For most people, it would be easier to provide this much information if asked.
So in your practice, you can develop a multidirectional approach to finding out this information. For example, you can ask for the referral source at the initial telephone conversation stage, then you can ask for it again on the new patient medical history form, then yet again during casual conversation and establish in our minds a road map of how the patient came to be with you.
2. Average Marketing Cost
This is your total budget spent on marketing in a year, divided by the number of patients generated from the total marketing budget. This sum can also be worked out on a monthly basis for even better control of your vital stats. Total Marketing Spend ÷ Total Patients = Average Marketing Cost
The relevance of the Average Marketing Cost is that it allows you to recover your marketing expenditure and make sure that you are deriving profits from it. So, for example, the fee you charge per person has to be greater than the Average Marketing Cost, especially if you are to make a profit.
For example, if you spent £20,000 on total marketing and this generated 200 new patients than your average cost per patient would be £100. You need to at least earn £100 plus whatever your practice running cost per hour is before you start making any profits.
This kind of calculation will help you to understand how to create profits in your practice. This is one of the reasons why many dentists may be generating an income but not a profit.
Most dentists end up “out of pocket” when marketing because they do not have any strategy in place to recover the expense.
3. Cost per Lead
You can be even more specific and work out your cost per lead. Total Cost of Activity ÷ Number of New Patients Generated = Cost per Lead
It is done in exactly the same way but this time only taking the cost of a particular marketing method into account and the number of patients generated from that source alone.
For example, if the cost of a newspaper advert was £1000 and you monitored this and found out that it generated 12 new patients. Then your cost per lead would be £500
The significance of this would be so that you can compare which leads are working for you and which ones are not, so you don’t waste money in your next marketing campaign on the leads with high cost per lead values. It helps you to distinguish between the different lead generators.
4. Average Generation Cost
This is useful information because it allows you to think in the opposite way to which you have been. It allows you to check that you are on track. Total Income Generated ÷ Number of New Patients Seen = Average Generation Cost
For example, if the total income generated in a month was £35,000 by seeing 50 new patients, then the AGC would be £700.
The way this number becomes useful is to consider the average percentage you are planning to put into marketing.
5. Average Lifetime Value per Patient
This is the total amount that is producible from any patient over their lifetime association with you. It allows you to determine how much you afford on marketing in the long run and if you be able to secure profits?
e.g. if the Initial Value Expenditure is £1000 and the patient comes for 5 years spending £200/yr (= £1000) than the Average Lifetime Value is £2000.
Marketing is a dynamic process. Forever Changing. Depending on Metrics.
DWB helps you with your marketing strategy, your marketing plan and your cost-effective marketing budget for your dental practice.
- DWB provides impartial advice to help you with any dental marketing activity to help you get a high return on your investment.
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- Before you spend your money on a new website, your new marketing campaign or to get advice on getting the right calibre of patients for your practice and increase your profits, call us.
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