Part I – Improve Your Return On Investment (ROI)
How much growth are you looking for in your practice for 2015?
Five percent? Ten? Twenty (or more)?
If you answered anything above zero, marketing will have a role to play for you this coming year.
The only question is whether it will play the role of hero (good return on investment, profitable, lots of response, new patients and so on) or villain (big expense, no response—a veritable black hole sucking the profit right out of you)?
The good news: you get to decide.
And with that in mind, I’ve written two webletters on the subject of marketing that you can put to use right away and whip your practice’s marketing into shape for the coming year!
Part I (this article) covers how to determine and maximize your marketing’s Return on Investment (ROI).
Do you know the return on investment (ROI) for each and every marketing effort you did for 2014? 2013? Earlier?
If not then FLUNK!
At least take consolation that you are by FAR not alone.
Most doctors and business owners for that matter grade their marketing on “feel.” Or what they “think” is working.
Why are you marketing in the first place? Expansion. How is this represented? Well, at the end of the marketing cycle (when a new patient comes in and agrees to treatment/service) it would show up as INCOME.
How would you measure your ROI? Simple, divide the income derived from this marketing by how much you spent.
You spend $10,000 on newsletter campaign to four zip codes surrounding your practice.
You look up the patients that came in off of this newsletter and see that the practice made $50,000.
Your ROI is 1:5. Not bad – you could always improve, but at least you came out ahead!
You might also have some losers:
You spent $10,000 on a marketing campaign and made $5,000. ROI of 1 to .5.
The question I’m usually asked about this is “How long should I wait before grading a marketing campaign?”
My answer: not long.
For that matter, if this $10,000 on newsletters went out over the course of two months, I’d probably do a thumbnail (quick assessment of it) DURING the mailing cycle – maybe a month in to see if I want to continue some variation of it in month three.
(Related: Marketing 101 – Part 1)
In other words, if I have two months’ worth of newsletter mailings (the same newsletter, let’s call it “newsletter A” to send out, it would look like this:
Month 1 – Mail newsletter A. Check response and ROI at end of month. If it is terrible I’d probably change something. (See below for more on this). If not or just “okay” I’d continue. If it’s awesome I’d gear up with a new newsletter (Newsletter B) for month three.
Month 2 – If horrible response in month one, I would have changed something. If “okay” or great continue mailing Newsletter A.
Month 3 – If was great, mail new newsletter (Newsletter B). If Newsletter A’s response was terrible change something for this month – i.e. different one or new marketing idea altogether.
I would also do a thorough “official” analysis of Newsletter A in month 3. This would give at least a month the last one went out to see what the practice made (income) off of the newsletter.
This leads me to what I would say is the NUMBER ONE mistake I see that gets made with marketing: people move too SLOW.
Results from marketing are FAST. How long does it take for an email to hit? Or for a piece of mail to reach its intended recipient? Not long. In that same vein, your reaction time with your marketing should also be speedy. The quicker you can adjust or adapt when something isn’t working, the better chance you have for recovery.
Contrast this with how things usually work: Doctor starts a marketing campaign, mails, mails, mails for months on end and then evaluates. TOO S-L-O-W.
If things are working, then that’s not the biggest of deals. If they’re not, then you have a problem. The first of which is wasted money on ineffective marketing. The second is more insidious. Had he or she moved faster, they would have been able to fix the issue and as a result they would have made more money. Well, time once lost is gone forever. The same could be said about lost income!
I evaluate marketing AS I’m doing it. I don’t wait for weeks or months. If it’s not working I do something about it. And that could mean anything from scrapping that marketing piece altogether to making a few simple adjustments. To explain, let’s look at the USUAL reasons you’ll find behind poor ROI on a marketing piece or campaign.
- It’s not actually being mailed. (This happened to me once, years back…the mail house lied). Not a usual problem but could happen.
- The ad or piece itself is defective – i.e. wrong phone number, etc. With Internet marketing this would include broken links and wrong contact info.
- The ad or piece is ineffective – doesn’t excite/motivate your target public into action.
- The ad or piece is targeting the wrong publics. (E.g. promotion for extensive restorative work being sent to young people instead of a 35-and-over demographic).
- Incoming responses (phone calls, emails, etc.) are being mishandled or not responded to.
- The patients who show up aren’t being sold. This is the last step in the “marketing cycle.” When sales are weak it kills ROI as there isn’t any INCOME from what the marketing is bringing in.
While there could be other reasons I haven’t listed – one of these (or a combination of the above) are the usual culprits behind low ROI. Determining which is easy:
1-4 above will show up as low responses (calls/emails – i.e. however people can respond to whatever marketing you are doing).
If you don’t have an accurate means of tracking responses then “5” above may look like low response (i.e. your receptionist is getting calls but not recording/reporting the responses). If you do have an independent and tamper-proof way of tracking responses then “5” will show up as high response and low new patients.
“6” will show up as high new patients and mediocre/poor income.
Handling “1” is simple: get a new mail house.
For “2” fix the ad/links and so on. Yeah it stinks if you wasted money sending marketing out with the wrong information – but the answer is not to stop altogether. Fix it and move on.
To fix “3” see part II (my next article).
To fix “4” determine which public you SHOULD be targeting and do it. Not hard to do. Target marketing is easier than ever before now – from customized mailing lists to Facebook, Linked In and so on. If you have questions email me.
To fix “5” work with your Front Desk. We have plenty of information on this that you’ll find on our blog. Just look under the topics of marketing and/or staff.
For “6” you need to learn to sell better! Come to the MGE Communication and Sales Seminars!
Tightening up any of the above should improve ROI. Beyond this, a few other things to consider:
In my experience SOME marketing is better than NO marketing. The answer to a failing marketing campaign is not to stop marketing altogether! You don’t decide to stop breathing when the air smells bad! Instead, work fast to fix bad marketing. This requires keeping an eye throughout the marketing cycle and changing direction quickly when it’s not working and reinforcing successful actions that are working.
When I mentioned “scrapping” a terribly ineffective marketing piece altogether mid-mailing I mean exactly that. With internet marketing this is cheap and easy. With physical mailings it can cost you a little more, but the most expensive part of mailing (unless you spent too much on printing) is POSTAGE. As an example, here at MGE, I spend on average about 10 to 11 cents each in printing the average mailer. Size-wise these range from a big postcard to an eight page newspaper. Magazine (like our 24 page page “Winning Client”) are a little more expense. But we average out around 10-11 cents per piece—and all of these are four-color pieces. When mailing, I spend about 2 cents each for handling (for the mailhouse to prep and mail). I spend about 40 cents each piece for postage! So, roughly 12-13 cents to produce and prep each piece and 40 cents to mail! If a piece is terrible and getting no response (which happens rarely – but has happened a few times in the past), I’m better off scrapping the mailing and reprinting than continuing to mail!
This may seem counterintuitive, i.e. …you printed it you should mail it. But financially as you can see from the above, it makes the most sense. It also requires the willingness to honestly evaluate your own results and efforts. I have a Marketing Department, they’re a great bunch of people and I am also involved in the company’s marketing. If I come up with an idea or approve an idea that bombs, I have to “own up” (along with the Marketing Department) and move on. The key is to have far more wins than losses (which we do by a longshot)!
And remember, the whole idea behind marketing is to INCREASE INCOME. If what you’re doing isn’t accomplishing this – fix it…FAST.
Here’s to great ROI and expansion in 2015! Get the best bang for your buck!