What is the REAL Return on Investment for Your Marketing Dollar?

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What is the REAL Return on Investment for Your
Marketing Dollar?
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• Are you wasting your dental office advertising
  money or is it actually paying off? Will you ever
  be able to achieve a completely referral-based
  practice? Or, are you doomed to spend more and
  more each year on marketing? To answer these
  questions, you need to consider, Marketing the
  Four Levels of Return. And know this at least
  two of these levels are often overlooked. Failure
  to take these into account will give you a wildly
  inaccurate picture of the REAL dental office
  marketing ROI.

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LEVEL ONE The Initial Responders

• Lets say you are sending a direct mail piece to
  homes with certain specified income levels and
  into zips codes that are near your practice. Or,
  you are running a print ad in a local magazine or
  you are doing a radio or a Facebook ad or any
  kind of advertising for that matter.

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• The first level of dental office marketing ROI
  is, of course, those who respond and make
  appointments and actually show up to receive and
  pay for dental treatment. We call these the
  Initial Responders.

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• The income generated from these responders can
  be traced very directly to the dental marketing
  effort that you have done. The income from
  initial responders can occur on the first visit
  but can also occur on subsequent visits as the
  patient completes your treatment plan.

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• When considering the dental office marketing
  ROI, most dentists stop at the initial
  responders. They figure that if the initial
  responders do not produce at least a 31 ROI then
  the marketing effort is a failure. This is a
  mistake and will cost them, and you, LOTS of
  money if youre making the same mistake. Why?
  Because there are at least three additional
  income streams that you are likely not fully
  considering. If you bail out early you wont
  realize your complete ROI.

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LEVEL TWO Referrals

• If your practice is like most others, one of
  the biggest sources of new patients comes from
  referrals. (If this is not the case and your
  patients arent talking about you or referring
  their family and friends, then youve got much
  bigger problems than poor marketing!)

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• So your second level of return is the income
  generated by the referred patients. Now, we dont
  know how many of the Initial Responders will
  refer their family and friends. All we know is
  that it WILL occur to a large or small degree. An
  effective way to measure your referral rate is to
  divide the number of patient referrals each month
  by the total number of new patients.

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• For instance, lets say you get 10 new patients
  each month and 5 of them are through direct
  patient referral. Thats a 50 referral rate.
  Lets now say that you start marketing and 16 new
  patients a month are the norm. A referral rate of
  50 would produce 8 patient referrals a month.
  Once you start marketing externally, you will
  also see your patient referrals going up.

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• All income from the referred patients of the
  Initial Responders can be sourced to the original
  mailing or ad or radio spot.

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LEVEL THREE Referrals from the Referrals

• The patients referred by the Initial
  Responders will, in turn, refer their family and
  friends. Again, we dont know how many or how
  often but we can safely assume that there will be
  some degree of referring going on.

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• Actually this third level of return can and does
  go on for years (really for the life of your
  practice when you think about it!). In other
  words, you will end up with a genealogy or
  patient family tree. Because the referred
  patients refer other patients who in turn refer
  others, ad infinitum, the tracking of all this
  can be tricky. Thats why its almost never done.

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• But even though its not tracked, the fact
  remains that you are and will be MAKING MONEY
  from these third, fourth, fifth and subsequent
  referrals for the entire life of your practice.
• ALL of this is sourced to the original marketing
  effort your mailer or ad or whatever it was
  that brought in Initial Responders. THATS where
  it all started wasnt it?

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LEVEL FOUR Referrals Ad Infinitum

• Here we introduce the element of TIME.
• Lets say you do a direct mail program that
  consists of 5,000 mailers per month for 10
  months. Thats 50,000 pieces of mail spread out
  over most of the year.

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• Lets then say that the mailing program produced
  a total of 50 Initial Responders. (This is quite
  conservative by actual historical tracking over
  the last 15 years by our agency) which in turn
  generated X dollars.

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• Out of the 50 Initial Responders 15 referred
  family and friends.
• These 15, over the course of the year, referred
  4 patients.
• These 4 referred 2.
• The total for the year? 71 patients.

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• The fourth level of return says this a
  percentage of these 71 patients (maybe 100 but
  more likely less) will be with you for many
  years. Even if you complete their cases they will
  at least be in recall until you either make them
  mad or they move away or die. And if thats not
  enough, an unknown but not zero a percentage
  of these 71 patients will continue to refer
  others.

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• Natural attrition will, of course, take its toll
  but you still can count on many years worth of
  income from a significant portion of the previous
  three levels of return.
• And if you really want an accurate picture,
  track ALL these levels of return for FIVE full
  years. We are confident you will be amazed at how
  well your initial investment has paid off over
  this time period.

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LEVEL FIVE Going Organic All Referrals, All
the Time

• Didnt we say there were only FOUR levels of
  return?
• Theres actually another one.
• The new patients added to the practice because
  of your marketing efforts. And the resultant
  referrals may be able to take you to a point
  where you can actually decrease your marketing
  budget.

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• This is what we call going organic. The
  practice now grows organically on referrals
  alone.
• Heres hoping that you too can go organic!
• William Howard (Howie) Horrocks
• Mark Dilatush