Marketing Cost of Acquisition for Dental Practices
Marketing Cost of Acquisition for Dental Practices
Effective marketing is important to the success of every enterprise. Marketing has to be effective in its message. Marketing has to be effective in its response. Marketing has to be effective in its return on investment.
What are the costs involved in marketing?
There are many variables in any marketing campaign. The key is to maximize the effectiveness of your marketing efforts to in order to accomplish your marketing goals. You have to begin with a marketing cost per acquisition dollar figure in mind and then set up your allowable conversion ratios. Once your metrics or ratios are in place you have to execute and the measure.
Traditional marketing campaign such as direct mail, other print advertising, radio & television have a standard waterfall of costs such as the one depicted below:
1. How many people are you reaching with your campaign (Cost per Impression)?
2. How many people are responding to your campaign (Cost per call)?
3. How many inquiries are converting to appointments (Call to Lead Conversion %)?
4. How many scheduled appointment keep the appointment (Cost per lead)?
5. How many appointments accept treatment (Cost per sale)?
Paid search advertising through the internet has slightly different waterfalls of costs:
1. What is your cost per click?
2. How many clicks are required to produce an inquiry?
3. How many inquiries are converting to appointments (Call to Lead Conversion %)?
4. How many scheduled appointment keep the appointment (Cost per lead)?
5. How many appointments accept treatment (Cost per sale)?
Each point in the marketing process has to be measured and accounted for. You need to know at what stage(s) you are executing well on and at what stage(s) that you need improvement on.
Many paid clicks never convert because of the website that they land on. Many pieces of direct mail are never opened because of the design of the envelope or the message on the post card. Many quality phone and email inquiries are lost at the first point of contact. Many treatment plans are never accepted because of the presentation. There are opportunities for success and failure at each point of the marketing campaign. In order for the campaign to be effective the entire team has to execute at a high level.
All of those involved in the process have to own their piece of the campaign and be held responsible for it. Employees and vendors involved in the process need to have the same levels of accountability.
Any marketer or sales professional will tell you that there are only two legitimate reasons for a person not to accept your services:
1. No need
2. No money/No credit
This may come across a little forcefully but if you believe in the work and service that you provide to your patients why would you want them to receive dental care anywhere else? Your practice should adopt the attitude that unless a patient honestly has no need for service or is financially destitute that a treatment program should be engaged for that patient.
How do you know if a marketing campaign has been successful?
Each practice is going to answer that question a little differently but in order to honestly answer the question you need to understand your cost structure and your revenue structure.
How much is a new patient worth?
How much are you spending to acquire a new patient?
What are the factors involved?
Search Engine Marketing
Let's look at a Search Engine Marketing or CPC (cost-per-click) campaign and see what it would take to make the campaign successful from a financial standpoint.
There are 5 basic stages that a click will go through on its way to becoming a patient who engages in a treatment plan.
At each of these stages a percentage of the original clicks stop moving forward through the process and become a loss to the campaign. The numbers that are contemplated on the chart below are based on national averages.
The journey from click to a patient who accepts treatment can be expensive. Most clicks are lost on the landing page of a dental website. A 5% conversion ratio from click to inquiry (phone call or email) simply means that 95% of the clicks you are paying for never move forward beyond landing on your website. A 50% Appointment Made ratio is a function of your front desk staff or answering service. A 75% Appointment Kept ratio is a function of your front desk staff and the technology you employ for engaging your patients. A 50% Treatment Accepted ratio is a function of your Treatment Coordinator or the Dentist present treatment options to the patient. Depending on the performance of each one of these components within your marketing campaign the cost per treated patient could be significantly reduced or increased.
This marketing cost structure places the marketing cost of acquisition for a treated patient to be $353. Let's consider the labor, supply and direct costs involved in treating the patient. Because treatment plans can have a very wide range we will look at the cost of an exam cleaning and x-ray in the chart below. We will consider the average fee-for-service revenue for this service to be $300.
These costs do not include monthly overhead for facilities but are restricted to the costs directly associated with performing the treatment. The Net Revenue in this model is $240.00 but when the marketing cost of acquisition is factored in the Net Revenue (prior to any additional treatment) is $(113.00).
Let's look at a scenario where the patient pays a discounted rate of $49.99 for the exam, cleaning and X-ray. Many dental promotions offer a scenario similar to this in an effort to have a new patient sit in the treatment room. The Net Revenue in this model is $(10.01) but when the marketing cost of acquisition is factored in the Net Revenue is (prior to any additional treatment) is ($363.01).
There are many keys to effective Search Engine Marketing or CPC campaigns. The most important factor is the website and landing page that you drive your paid search traffic to. Paying for clicks on a website that cannot convert them into an inquiry is financial negligence. Each conversion ratio discussed in these scenarios can be consistently improved upon; driving the cost of acquisition down and the net revenue higher. Consider the scenario below which has a 25% increase on each ratio.
Conversion is the key to success in every marketing campaign.
Direct Mail
Let's look at a direct mail campaign and see what it would take to make the campaign successful from a financial standpoint.
There are 5 basic stages that a direct mail piece will go through on its way to becoming a patient who engages in a treatment plan.
At each of these stages a percentage of the original direct mail pieces stop moving forward through the process and become a loss to the campaign. The numbers that are contemplated on the chart below are based on national averages.
The journey from sending a direct mail piece to a patient who accepts treatment can be expensive. Most letters or postcards are lost, never being opened or read. A 0.75% conversion ratio from delivery to inquiry (phone call or email) means that 99.25% of the pieces you are paying for never move forward beyond being delivered. I know mail houses claim a response rate of 1.0%-3.0% but it is rare to speak with a dental practice that has experienced this high of a return. A 50% Appointment Made ratio is a function of your front desk staff or answering service. A 75% Appointment Kept ratio is a function of your front desk staff and the technology you employ for engaging your patients. A 50% Treatment Accepted ratio is a function of your Treatment Coordinator or the Dentist present treatment options to the patient. Depending on the performance of each one of these components within your marketing campaign the cost per treated patient could be significantly reduced or increased.
This marketing cost structure places the marketing cost of acquisition for a treated patient to be $280. Let's consider the labor, supply and direct costs involved in treating the patient. Because treatment plans can have a very wide range we will look at the cost of an exam cleaning and x-ray in the chart below. We will consider the average fee-for-service revenue for this service to be $300.
These costs do not include monthly overhead for facilities but are restricted to the costs directly associated with performing the treatment. The Net Revenue in this model is $240.00 but when the marketing cost of acquisition is factored in the Net Revenue (prior to any additional treatment) is $(40.00).
Let's look at a scenario where the patient pays a discounted rate of $49.99 for the exam, cleaning and X-ray. Many dental promotions offer a scenario similar to this in an effort to have a new patient sit in the treatment room. The Net Revenue in this model is $(10.01) but when the marketing cost of acquisition is factored in the Net Revenue is (prior to any additional treatment) is ($290.01).
There are many keys to effective direct mail campaign. The most important factors are the list, messaging and design of your direct mail marketing piece. Each conversion ratio discussed in these scenarios can be consistently improved upon; driving the cost of acquisition down and the net revenue higher. Consider the scenario below which has a 25% increase on each ratio.
Once again, conversion is the key to success in every marketing campaign.
Every marketing form and campaign has the potential for success and failure. They all come down to planning and execution at each critical stage of the campaign.
The greatest challenge for most dental practices takes place from the inquiry to the appointment kept phases of the marketing campaign. This is where most of the fall of from the initial budget invested in the campaign is lost. Checks have been written for direct mail pieces or credit cards have been charged by a Search Engine and you are both receiving inquiries and booking appointments or you are not. It can be frustrating or very rewarding and the risk for each practice is significant.
Engaging in these traditional forms of marketing require a dental practice to have front office staff and treatment coordinators who have real "Sales" skills. In many cases dental offices have not recruited staff members with these qualifications or have not trained their staff on how to maximize the practice's marketing investment.
How is Right Dental Group different?
Right Dental Group eliminates the marketing cost of acquisition; reducing the practices investment to the labor, supplies and X-rays required to perform the initial exam, cleaning and X-ray.
New patient marketing with Right Dental Group reduces the conversion ratios necessary for a dental practice by eliminating any up-front marketing costs such as direct mail, other print advertising, search engine marketing, radio & television. Right Dental Group has one major waterfall.
1. How many appointments accept treatment?
As a member of Right Dental Group your new patient marketing process is streamlined. Here are the 4 basic steps your practice will go through in acquiring a new patient through Right Dental Group.
The cost of marketing is absorbed by Right Dental Group therefore the marketing cost of acquisition for a treated patient to be $0.00. Let's consider the labor, supply and direct costs involved in treating the patient. Because treatment plans can have a very wide range we will look at the cost of an exam cleaning and x-ray in the chart below.
These costs do not include monthly overhead for facilities but are restricted to the costs directly associated with performing the treatment. The Net Revenue in this model is $(60.00) (prior to any additional treatment).
There is an investment in each patient when working with Right Dental Group. The costs to provide the new patient exam, cleaning and X-ray maybe slightly higher or lower than those contemplated in this model. The financial risk to your practice is significantly lower than that which comes with direct mail and search engine marketing.
Working with Right Dental Group does not eliminate an investment in new patient marketing. Working with Right Dental Group eliminates the marketing cost of acquisition; reducing your investment to the labor and supplies associated with providing an introductory service.
If treatment acceptance is 25% or greater in the patients you receive from Right Dental Group you will have achieved positive return on investment.
This is a straightforward marketing proposition with no asterisks or catches. We have produced a short video that gives the highlights of the program logon to http://rightdentalgroup.com/join to view or call us at (877) 804.8484. The membership is completely free and is a month-to-month relationship.
Please call us at (877) 804-8484 or email us at info@rightdentalgroup.com to spend ten minutes potentially resolving your new patient marketing challenges.
Read Before Joining-Fortune Hi Tech Marketing Review Oao Tnk-bp Holding - Swot Analysis - Market Research Report On Aarkstore Enterprise Email Marketing 101 1000 Calorie Challenge Scam- - 1000 Calorie Challenge offers you a sound and reasonable eating plan Profitability through Advanced Organizational Structure Stantec Inc. - Swot Analysis - Market Research Report On Aarkstore Enterprise Pancreatic Cancer - Pipeline Assessment And Market Forecasts To 2017 Aarkstore Enterprise Non-hodgkins Lymphoma (nhl) - Pipeline Assessment And Market Forecasts To 2017 Aarkstore Enterpri The Real Benefits of Outsourcing to Telemarketing Companies Hypnotherapy and Cigarette smoking: Locating a Profitable Way to Quit Revamp Ecommerce Website Design And Marketing To Grow In This Recession Crane Company - Swot Analysis - Market Research Report On Aarkstore Enterprise Ez Wealth Solutions For Online Marketers In Today's Economy