Ask any successful business owner about calculating the value of their investments and they will each tell you the same thing: analyze, analyze, and analyze. Depending on your unique marketing approach, determining the value of your strategies and adjusting them to fit your goals might seem overwhelming if you haven’t tried it before. Here are a few tips on calculating your return on investment, your new patient acquisition cost, and how to alter your methods to improve both.
Tally It All Up
- Referral sources. Identify every single source in which you receive a new patient. Are they coming from your ad campaign, word-of-mouth referrals, or simply via your website contact form?
- Ask your patients. Train your team to ask every new patient how they found you before they schedule their first appointment. This way you can track failed appointment percentages per marketing method. For example, if you run a direct mailer and attract five new patients, but only one of them shows, then perhaps it’s time to re-evaluate.
- Delegate. By putting a team member in charge of calculating your new patient reports, you can assign them a monthly task to break down each referral source quantitatively and report back to you.
New Patient Acquisition Cost
Once your new patient numbers have been tallied for a given month, it’s time to take a look at your investment amount. Let’s consider an example in which your internet marketing costs $1000 each month, and you are receiving ten new patients per month because of it. That would mean that your new patient acquisition cost is $1000 / 10 = $100. Compare that to your direct mailer, which may be closer to $500 per new patient. Which one seems worth it?
These numbers are crucial in determining the value of your marketing efforts, and will help you ensure your budget is allocated in the best way possible.
Return on Investment (ROI)
ROI is typically expressed as a percentage, comparing the profitability of a particular investment to its cost. To find yours, divide your net profit by your cost, and multiply by 100.
For example, if your ten new patients from your internet marketing campaign ended up spending $15,000 over a six-month period, then that would mean ($15,000 / $6,000) x 100 = 250% ROI. For each dollar spent on your marketing, you’ve received two-and-a-half in return. This example of return on investment isn’t a pipedream, either. We’ve achieved returns for many dentists that were well beyond this.
While calculating ROI can be helpful for some metrics, we believe the best way to visualize your success is to evaluate your campaign’s effectiveness based on the average cost to acquire a new patient. We find this easier to digest and can help you make your investment decisions with greater clarity. In addition, if we are able to bring your new patient acquisition cost down to $100 (or even $50) then we believe you’ll have no qualms about investing in your practice’s success.
We can’t wait to hear your practice goals and help you achieve them. Schedule your complimentary marketing planning session with Identity Dental Marketing today.
