As a dentist, you know that margins matter. You’re the person ultimately responsible for ensuring that the ROI – regardless of whether it relates to technology, staffing, or marketing – is worthy of the initial investment. Just like there are calculations that can help you determine whether a new piece of equipment is a sound investment, it’s possible to assess the value of your investment in marketing the practice.
ROI in marketing essentially comes down to how many calls from prospective patients are generated each month and the value of those patients over time. An easy way to consider this is to fill in these blanks: my practice spent $X on marketing for the month and received Y new patient calls. This calculation will give you the cost per prospective patient. You can then determine the value of the patient to the practice over his or her lifetime by comparing X (the amount spent on marketing) to Z (the lifetime value of the patient to the practice).
Another way to calculate ROI for a particular type of marketing is to use the formula of ROI = (A*B)-C in which you multiply A, the annual value of a patient, by B, the number of new patients seen from this type of marketing, and then by subtracting C, your annual investment in marketing. An ROI of 3:1 to 5:1 indicates a campaign has been a success. For example, in the situation where:
- A (annual value of a patient) = $1,500 (based on fees related to procedures performed per year)
- B (the number of new patients seen from this type of marketing) = 48
- C (your annual investment in marketing) = $10,000 (based on a hypothetical investment in a specific strategy and tactic
- (A * B) - C= ROI
- ($1,500 * 48) - $10,000 = $62,000
The ROI = $62,000
Remember that marketing is a marathon, not a sprint. It’s a long-term investment in your practice and will increase its value and effectiveness as it matures over time. While some marketing tactics, like direct mail campaigns, can create an immediate uptick in initial phone calls, it’s critical to have a long-term, comprehensive plan to assure continued growth.
The amount of time needed for a marketing plan to show some activity will vary depending upon your market and how other practices are marketing to prospective patients. If you’re the only dentist in your area who’s using mailers, it’s likely that you’ll see immediate results. Keep in mind though that there are no guarantees and that mailers don’t work in every area. Also remember that the impact of any tactic may diminish once other dentists see what you’re doing and follow your example.
Make sure that any goals for the first month of your campaign are modest since the effort needs time to generate results. As a rule, allow at least three months before evaluating any campaign’s success. It’s important to recognize that different types of marketing might need more time.
While online marketing is more complicated than traditional marketing, your practice will stand out if you have a look and feel that’s better than that of other dentists in the area.