Marketing: It’s the $64,000 question. How much of your practice budget should you allocate to it? Do you, as the owner of a dental practice, leave marketing to social media and hope it works? It’s not a wise move to leave marketing dollars on the plate or rely on others to figure it out for you.
The key here is to know and understand “ROI,” which stands for “Return on Investment,” as well as what you should track and why when it comes to your marketing efforts.
What qualifies as “good” ROI varies by industry and product, but typically, you need at least a 50% return (after accounting for operational costs) to see a profitable return on your marketing efforts.
For example, let’s assume your average per-patient “case average” is $500. If you spent $500 on marketing promotions and gleaned four new patients (totaling a $2,000 “take”) that’s a 4-to-1 ROI: a robust rate that would signal you to stick with those efforts, whether they’re purely social media advertising, email blasts or similar.
And the ROI doesn’t stop there. You must consider referrals, too. If the four patients you gained from your previous marketing efforts, in turn, referred two more patients and those two patients referred one more patient, that would change your ROI this way:
With four new patients resulting from spending $500 on dental-centric marketing, the total new patient “potential” would be 4+2+1 for a total of seven patients from that marketing effort. The ROI would be 7-to-1, or a seven-fold ($7,000) return on a $1,000 investment.
But what if your marketing efforts don’t produce a good ROI? Obviously, it’s time to rethink them. Ideally, you should have a spreadsheet that calculates your ROI for all your marketing channels so you can track progress over time: months, quarters, 6-month and 12-month cycles.
If any one of your channels’ ROIs falls below the 1% average, it’s time to analyze that channel and adjust it or remove it altogether; then you can invest those dollars into channels that have provided healthier ROIs over time.
There are many online marketing tips to help you get started, so experiment to see what works most effectively for your practice. Ultimately, you don’t ever want to throw good money after bad, and keeping a close eye on your numbers should prevent that from happening.