subject: How To Perform An Effective Roi Analysis For Healthcare Telemarketing Projects [print this page] If youre trying to evaluate the profitability (at least from a marketing perspective) of engaging the services of a healthcare telemarketing company, then you need to determine that projects return on investment or ROI. The ROI expresses the overall profits a project generates as a percentage of the total amount youve invested in that project. Although the calculation is fairly straightforward, its often confusing which values to use and how to interpret the results. So, heres a short guide on how to calculate and interpret the ROI.
In order to make sure were on the same page here, lets make some official descriptions about ROI. As mentioned above, the ROI of a project such as a medical telemarketing campaign is the total profits expected from the program divided by the total amount invested in the project. This value is usually stated as a percentage. A positive ROI indicates the project is potentially profitable while a negative ROI means a likely unprofitable one.
If a company hires a healthcare telemarketing company to generate health insurance leads and the former earns a total profit of $10,000 and pays a total of $30,000, then the companys ROI on the medical telemarketing project is roughly 33.3%, which means its making money from the project. Well get to how the total profits and total costs are computed below.
Before we go any further, lets take a look at an important concept in ROI computation known as the project timeline. This is basically the length of time that a project is expected to be active. This can be the number of days, months, quarters, or years from project start to termination. With that said, lets now have a look at what amounts to use in the computation.
First, we need to understand that only the projects incremental revenues and costs are used to compute the total net profit. Incremental revenues are the income generated as the result of undertaking the project. So in a healthcare telemarketing campaign, the incremental revenues are the dollar-increase in sales due to the campaign and not the sales attributed to non-telemarketing activities. Equivalently, incremental costs are those which can be traced to the project. These are the fees and dues you pay your medical telemarketing partners plus any other expenses related to the project. The total profit is simply the total revenues minus the total costs expected throughout the project timeline.
Next, we now compute the total amount invested in the project. Normally, this is the total upfront amount to get the project started plus any other spending made to prolong or continue the life of the project. However, since there are typically very minimal upfront or subsequent costs to make use of healthcare telemarketing services, we can assume that the total amount invested is also equal to the incremental costs we used to compute for the total net profit.
Lets try expanding the example earlier to understand what weve just discussed. If the company gains a 3-month increase in sales of $40,000 by hiring a medical telemarketing company which billed him a total of $30,000 for the same period, then the ROI of the project for that period would be ($40,000-$30,000)/$30,000 = 0.333 or 33.3% which is quite a good return.
Now you can use ROI more effectively to evaluate healthcare telemarketing projects. You can use ROI analysis to determine which provider offers you the best return. However, its also important to keep in mind that ROI is not an absolute measure of profitability by itself. You need to take into account other issues like differences in cost structure among medical telemarketing firms which can affect ROI figures. But, all in all, ROI is one of the best metrics you can use.
