When it comes to dental marketing, the key to success is to get more and better patients—not just more patients.
If you’re working with a dental marketing firm, your return on investment should be easy to calculate. You give the firm a certain amount of money every month and count up the number of new patients you get. Divide the money you spent by the number of new patients, and there’s your cost per new patient. Divide your monthly investment by your cost per patient, and you have your ROI.
That’s a reassuringly simple way to approach finding your ROI, and it’s dead wrong.
It’s wrong for a number of reasons. First, unless you’re using phone tracking, you’re looking at your total dollar outlay rather than how many new patients your spending in each marketing channel generated. All you know that is that some part, or parts, of your marketing are working. You have no idea how much of your marketing investment is underperforming or even bringing in zero patients.
Second, not all new patients are created equal. If your marketing is bringing in primarily new cleanings/exams, simple restorations, and other one-offs, that’s very different than attracting patients who need bridges, crowns, orthodontia, or even implants. Even one of those larger cases will give you an artificially high case average.
Third, working with most dental marketing firms means time out of your day. That may be a monthly call or consultation, or you might be on the phone to them several times a month. When you’re with your marketing firm, you’re not seeing patients, and that’s money out of your pocket. If you’re holding those calls or consultations after hours, that’s time away from your family, friends, and the nondental activities you like to do.
Let’s Think About This Differently
Your true dental marketing ROI is a complex function between your total marketing outlay, the number of new patients you realize, the average case value of those patients, and revenue you’re not getting while dealing with your marketing firm.
In order to accurately evaluate your ROI, you need to do two things in addition to those listed earlier: average your expenditure and your revenue over a period of at least 6 months (one year is better), and determine which of your marketing channels are working best.
Let’s say that you spend $3,000 a month on marketing in four channels and average 12 new patients a month. Two of those channels, costing you a total of $1,200 monthly, bring in one new patient apiece per month. Your total cost per patient in those channels is $600. If those new patients are one cleaning/exam and one restoration with an average case value of $350, you have a negative ROI in those channels. You’re losing money. You should stop spending on those channels and reallocate the $1,200 into the channels that are bringing you many more patients.
Let’s take your other two channels. Between them, you’re getting 10 new patients for a total cost of $1,800. That’s $180 per new patient, which is decent. Again, though, what mix of patients are you getting? Even with an average case value of $1,000 (assuming some larger cases), your ROI in those channels is 5.55:1 ($10,000 / $1,800).
When you add in the other two low-value channels, your total ROI drops to 3.56 ($10,700 / $3,000). Add in the lost revenue due to consulting with your marketing firm and your ROI drops even more. If you’re meeting with the firm after hours, you should assign a dollar value to your time after hours and adjust your ROI accordingly.
What Your ROI Should Be
Realistically, to grow your practice and increase your revenue, your marketing ROI should be in the neighborhood of 8:1 or even 10:1. You won’t achieve that goal with marketing channels that aren’t working. And you won’t know which ones aren’t working unless you accurately track how your new patients are finding you. Patients are unreliable when it comes to remembering the specific ad that led them to your practice or even where they saw it. To learn how you can accurately track your marketing, visit smartboxwebmarketing.com/zetetics.
So, here are some questions to ask about your dental marketing:
1. Does your dental marketing firm provide you with the means to accurately track how each marketing channel is producing?
2. How many hours a month do you devote to your marketing, either during business hours or afterwards?
3. What’s the average case value you’re realizing from your marketing?
4. Are you getting the ROI you need to grow your practice?
5. Finally, how happy are you with the way your revenues are trending?
The key to success is to get more and better patients, not just more patients. If the marketing firm you’re working with routinely gets you price shoppers, insurance-driven patients, and one-and-dones, be prepared to put in a great many hours because your margins will be thin.
Oh, and you might consider dumping that marketing firm.
ALSO BY COLIN RECEVEUR:
A house divided: When to reasses your dental practice marketing
Your new patients are falling through the cracks
Editor's note:
This article first appeared in the Apex360 e-newsletter. Apex360 is a DentistryIQ partner publication for dental practitioners and members of the dental industry. Its goal is to provide timely dental information and present it in meaningful context, empowering those in the dental space to make better business decisions. Visit the Apex360 home page here, and subscribe to the Apex360 e-newsletter here.
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