Marketing is the lifeblood of business. It’s vital to make every marketing dollar count. But how do we know if we’re marketing in the right place, spending enough or too much, or spending more on marketing than the new patient brings into the practice? Well, by measuring the results of what we’re spending. With these 3 metrics, you can dial in your dental marketing and get the biggest bang for your buck!
Unfortunately, most of us don’t have “experimental dollars” to test new ideas and media channels. Instead, we’ve got a limited budget and limited resources. But by tracking these 3 metrics, you’ll be able to maximize whatever budget and resources you do have. Plus, you’ll be amazed at how much of an impact you can make on your dental marketing results by measuring these 3 simple metrics. (Truly, regardless of your industry you can utilize these metrics to transform your marketing results. Just mentally exchange “patient” with “customer” when you’re reading, as well as a few other dental terms in the text, and voilà, it applies to you, too 😀)
A couple of things before we get started. . .
First, there’s a lot of ways to do this. So, we’re going to make it digestible by giving you a basic, simple approach and examples. Second, any ads you run will have analytics attached to them. This makes it easy to pull some of the numbers you need to calculate these metrics. But in order to fully track these metrics, you need to have a Google Analytics account setup as well.
Need a Google Analytics account? Click here to get started.
Tedious as this may sound, tracking your cost per lead is important. Not only in the flow of the other 2 metrics we’ll discuss below, but in the overall efforts of your dental marketing team. (Or if you’re a smaller business, let’s be honest, “marketing person,” which may even be your office manager or front desk employee, right?!!! #smallbizproblems).
First and foremost, the Key Performance Indicator (KPI) for your dental marketing team is not Cost Per Lead (CPL), but Number of Leads Generated. The number of leads being generated by your marketing efforts is the most important metric for your dental marketing team, which will also play a role in the other metrics we'll talk about later. However, that doesn’t mean Cost Per Lead isn’t important. In fact, it’s essential for determining how effective your marketing efforts are on different channels by determining how many leads you get per dollar spent.
Awesomely, this information will help you make comparisons. Then you can dial in your marketing efforts by determining where you get the biggest bang for your buck, where you need to improve in order to increase your number of leads, and how you can get your cost per lead down.
So, let’s better understand Cost Per Lead, shall we?
By now, you’ve probably discovered that you get your best return on your money through digital marketing. But with all the changes that are taking place with Google’s algorithm and larger businesses vying for the same keywords, it makes it difficult to keep your costs down. So, as you launch your campaigns, watch and calculate your cost per lead and act on it to maximize your limited marketing dollars.
It’s as simple as dividing how much you spent on the ad by how many leads it generated during its run. Of course, we can categorize leads between cold, warm and hot leads, but for the sake of this article, anyone who is interested enough in your offer to fill out a form or call is considered a lead. (We could delve even deeper, but it’d be enough content to write a whole other article, so we’ll just leave it at that.)
Dollars Spent: $500.00
Leads Generated: 43
Cost Per Lead: $11.63
Basically, lump all your signups received and/or calls received (based on the call to action). For instance, if your call to action is to schedule an appointment and you provide an online form as well as a phone number to schedule over the phone, you'd need to be able to tag the individuals who schedule over the phone from your website and then add them to the number of signups received online. You now have the total number of leads generated.
No doubt, this is one of the many efforts of your dental marketing team. Cost Per Lead is an inverse metric, which means, the lower your cost per lead, the better. In order to keep this cost down, your dental marketing team should be working hard to A/B test ads to see what small tweaks can produce better traffic. In addition, it’s also smart to test different social media platforms to find out where your demographic is being reached the best.
The best-designed websites will capture valuable data from visitors by motivating them to volunteer their name, email address, phone number, and other important information. If your marketing efforts are funneling hundreds to your website, you should be capturing a lot of leads. But what if you’re not?
If you’re not capturing a lot of leads, it means you haven’t presented a strong value proposition for your visitors and you’re not successfully motivating a specific course of action. This is why measuring your capture rate is pivotal.
Once you have traffic landing on your capture page, it’s time to dial in the offer. Your offer needs to be strong enough that people are willing to give up the information you’re requesting or follow a specific course of action. When creating the offer, you should ask yourself the following questions:
Now that you’ve dialed in your offer or call to action, it’s time to monitor your capture rate and act upon it!
It’s as simple as dividing the total number of leads generated by your total landing page traffic, multiplied by 100.
Landing Page Traffic: 512
Number of Leads Captured: 43
Capture Rate: 8.4%
Again, A/B testing is a great way to spark improvement. It helps you find subtle changes that could potentially double your capture rate. Notably, the main components that turn nameless visitors into qualified leads are: a well-designed landing page, organized information, and a clear value proposition (in other words, an attractive offer people want and understand how to claim). If you want more patients, then your marketing team needs to become obsessed with driving your capture rate up, up, and up!
Okay, so pretending the numbers in the examples are from your marketing efforts, you’ve spent $500 to generate 43 leads. Now, these leads or potential new patients are just that, potential new patients. They’re not considered a “new patient” until they actually purchase something (service or product, whatever), or for some offices if they show up to the scheduled appointment.
The marketing team has completed their product of generating the lead, now the sales team takes over from here. Of course, they’re the ones responsible for converting that lead into a new patient, which is why their KPI is Number of New Patients.
But another metric that's incredibly beneficial to track for the sales team is Acquisition Cost Per New Patient, also called Cost Per Acquisition (CPA).
No doubt, this metric is a big one! Most of us would spend a lot more money on marketing if we could clearly see all 3 of these metrics in real-time. Especially, Cost Per Acquisition!
When you know exactly how much you’re spending to acquire a new patient and the average value of a new patient (aka your Lifetime New Patient Value (the amount of money that a new patient brings into your practice)), you can more accurately put together a marketing budget. Plus, maximizing your budget becomes a whole lot easier.
To continue the example, let’s say that 9 out of the 43 leads actually became new patients. Based on Adept Marketing's data collection, the close rate for most dental practices is between 20% - 60%. So, 9 new patients is based on a conservative conversion rate of 20%.
Now, there are 2 ways you can calculate your acquisition costs. One way is for a team metric and the other is for an executive metric. The executive metric is a little more complicated, but it gives you, the business owner, the true cost of your new patient generation.
Simply divide your marketing costs by the number of new patients. So, $500 divided by 9 new patients = $55.56 per new patient.
It’s a great idea to compare your CPL and CPA to your Lifetime New Patient Value. If you’re spending more to get the new patient through the door than they’re spending in your practice, you can see that you’re losing money even though you may be generating new patients. Hence, practice owners shouldn’t strictly focus on just increasing their new patients. Practice success is weighed on much more than bringing a new patient through the door.
This is done by adding the ad spend to the salaries of the team/employee that is working on this process. For example:
If your marketing and sales employees’ salaries equal $1,800 for the duration of the process, you would add $1,800 to the ad spend ($500) and divide by the number of new patients (9) to get the true acquisition cost per new patient ($255.56).
Obviously, you can see that adding the team’s salary to the equation significantly increases your acquisition costs. However, by doing so, gives you the true cost per new patient and helps you make executive level decisions on how to get that number as efficient as possible.
Once you find out your acquisition costs per marketing channel as well as which channel is producing the highest number of new patients that schedule a "next" appointment, then you know where you should focus your marketing dollars. By moving your money to the most effective marketing channel, you’re ensuring your money is in the best place to maximize results.
Having the lowest CPA possible shouldn’t be your sole focus. So, don't get too caught up in pushing your CPA as low as possible, without a clear focus on patient retention. This is where knowing your Lifetime New Patient Value comes in handy.
Here are the important terms we covered:
Here are some of the key metrics your marketing team should be tracking:
And here are some of the key metrics your sales team should be tracking:
Incredibly, when your teams understand these metrics and own them, they’ll own the product you expect them to produce. Not only that, but they'll take a sense of pride in getting those metrics into acceptable ranges. Which, of course, means you need to identify and communicate the acceptable range of performance for each metric.
Need help identifying your acceptable performance ranges? Click here to check out our resource video on metrics.
Once you know the acceptable performance range for your team KPIs, you can incentivize improved performance to help drive the production of each metric. By doing this, your teams will feel rewarded and appreciated for owning these essential metrics and you’ll keep the momentum going!
Got a couple more minutes?
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