As a dentist, you have a limited amount of time that you want to utilize to run your practice. This includes training staff, dealing with operations, finances, and marketing. The majority of your hours spent in the practice should be helping your patients.
Today's discussion is going to be focused on your marketing efforts and I hope to shed some light on your options. Working with a trusted partner can provide you with more free time to spend with your patients while also increasing your bottom line.
Traditional Marketing vs. Online Marketing
There are many options that a dentist can consider to help bring awareness to your brand. Traditional marketing has been around the longest. These methods include newspapers, magazines, postcards, radio, TV, billboards, print collateral, etc.
Online marketing began in the 1990s, so it doesn't have the history that traditional marketing has, but it grew in popularity and has many advantages over traditional marketing. Methods include website development, content marketing, video marketing, SEO, PPC, online reviews, social media marketing, email marketing, retargeting, etc.
Benefits of Online Marketing
– A well-strategized and executed digital marketing campaign can reach a larger audience at a lower cost than the traditional marketing methods. With online marketing, you can target a specific audience to yield the strongest ROI (return-on-investment). This includes marketing to patients who are currently in the market for your services.
– Online marketing allows you to reach a larger audience where your ideal patients are actually looking for you.
– Traditional marketing requires that you work with an agency or partner to strategize and develop your ads. It can take years to determine if the traditional advertising has worked. Online marketing takes little time and with the right tools, much of it can be done by you or your staff for a few minutes a week that can have a huge impact.
– It's often hard for dentists to measure the effectiveness of traditional marketing. Digital marketing is easy to track, and with the right systems in place, you can actually see where in-bound leads are coming from. For example, with an effective online dashboard
, you can see where calls are coming from (direct, organic, paid channels, and referral traffic like inbound visitors from social media).
– With online marketing, videos, emails, social posts, blog articles, etc. can all be shared in an instant. This increases your exposure far beyond what traditional marketing can offer.
In 2013, Adobe did a survey
and 76% of those surveyed responded: “That marketing had changed more in the past 2 years than in the previous 50.” That was five years ago. With advent and growth of voice search, digital marketing is getting more and more complex. By 2020, Comscore
expects that 50% of all search is expected to be done by voice.
Hiring a trusted partner that has a proven track record in digital marketing for dentists will be key to your success!
How Much Should You Spend on Marketing?
Your budget will be determined by multiple factors. Some of these things include current revenue vs. targeted revenue for growth, the maturity of your practice, and market size. Let's explore each a bit further.
If you produced $750,000 in the last 12 months and your goal is to break the $1M barrier the following year, you'll need to adjust your marketing budget accordingly. Don't expect to grow without investing more. As long as you are able to measure your ROI and you are happy with your investment vs. your return, don't be afraid to invest more to achieve your desired growth.
So, the question is, how much should you budget for marketing? An easy rule of thumb is investing a percentage of revenue on marketing. Dental Economics
encourages this philosophy and depending on what stage your practice is in, it can range from 3 – 10% of your annual revenue.
The maturity of your practice will also depend on how aggressive you'll need to be. Are you starting a new brand from scratch? If so, to create awareness, you'll probably need to invest more than the well-established dental practice around the corner that has been around for 15 years. Additionally, a dentist in their twilight years with higher annual revenue might spend a lower percentage of their revenue to simply cover patient churn vs. a dentist that will need to invest more if they’re actually looking to cover churn AND grow.
>> Related: How much should doctors invest in marketing?
Lastly, your market size and competition will determine your marketing budget. If you are located in a large market, like San Diego for example, you will need to spend substantially more than a dentist in a small town with only five competitors. It's harder to get your brand noticed online when you have 1,000 competitors vs. five.
Regardless, both dentists should have a website at a minimum that clearly represents the services they offer, information on the dentist's education, and why they are the best choice. Dentists should also be displaying their before-and-after outcomes with detailed smile galleries and make it easy for visitors to read their online patient reviews inside their website. Don't make consumers leave the website to read your reviews. This hurts conversions and there are multiple options with technology that can pull them into your website for you with ease.
A dentist in a more competitive market should also consider investing in SEO long term and possibly PPC to utilize paid ads. This way, you will get found immediately for your high-end procedures like porcelain veneers, Invisalign, dental implants, etc.
Regardless of market size, dentists should also use email marketing to tap into their existing patient database for upsells, education, special offers, etc.
How to Measure Your Return on Investment
Many statistics show that the average dental patient stays with a dental practice for 7 – 10 years. The ADA shows that the average patient spends $653 per year, so a new patient will generate around $4,500 or more in revenue in their lifetime with a practice, not including their referrals. This is known as lifetime value (LTV).
In order to measure ROI, you'll want to see what your Patient Acquisition Cost is compared to the revenue achieved. For example, if you were spending $200 to acquire a patient and they brought in $653 in year one, that is slightly over 3:1 ROI. Over their lifetime at the practice, if they spent $4,500, that is over 22:1 ROI! After their first year, you'll cover their cost and every year after that they stay with your practice, your ROI increases.
Additionally, your ROI doesn't fall solely on the shoulders of your marketing partner. You may be paying them a few thousand per month to help you increase your brand's online presence and generate leads, but keep in mind: leads don't equal patients. As a marketer, our job is to help you get discovered for the procedures that you offer. How well you run the practice is your responsibility. If I send ten leads to one practice and ten identical leads to another, they can have different experiences with ROI. Let's play this out.
Practice #1 – Well-Run Practice
• The staff has excellent phone skills and follow-up skills. They can get half of the callers in for appointments (5/10).
• The dentist has a strong closing ratio. 80% of the time, they convert consultation visits to actual procedures.
• Five consults X 80% close rate = four patients. 4 X $4,500 LTV = $18,000
Practice #2 – Poorly-Run Practice
• The staff has poor phone skills and they don't have systems in place for follow-up. They can get about 30% of the callers in for appointments (3/10).
• The dentist has a slightly lower closing ratio. 70% of the time, they convert consultation visits to actual procedures.
• Three consults X 70% close rate = two patients. 2 X $4,500 LTV = $9,000
Do the math:
• Practice #1 will earn $216,000 LTV in revenue for every ten leads they receive
• Practice #2 will earn $108,000 LTV in revenue for every ten leads they receive
Let's pretend each practice spent $2,000/mo. to receive ten leads/mo. $24,000 per year = 120 leads. $200 per lead opportunity cost.
• Practice #1 will achieve 9:1 ROI
• Practice #2 will achieve 4:5 ROI
Think of ROI this way. If you gave me $1 and I could give you $3 back on average, that's 3:1 ROI. That is a bare minimum I would expect to achieve. Ideally, you should be shooting for 6:1 ROI or higher. As you can see, with a little training and focus on putting the right systems in place, you can achieve a much higher ROI!
If you are going to measure one lead source, go ahead and invest the time to measure all of your marketing sources. For example, measure the ROI of your website vs. magazines, etc. If you find that one or two sources are delivering most of your leads, it would be wise to cancel non-performing marketing efforts and double down on the efforts that are yielding the strongest ROI.
Some things can't be measured but are good for your brand, and you don't want to end up in "paralysis analysis." Analyze what you can and if you feel that something is helping that can't be easily measured, keep it as long as you can afford to do so.
>>Related: Tips for Converting Leads to Patients
I hope you have enjoyed this article. If you want to know how effective your current online marketing efforts are today, please contact me for a FREE Online Marketing Analysis.
To your success!
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