According to a couple different surveys and reports, the average value of a new patient is about $3,000. So how much should you spend on getting those new patients?
Let’s breakdown the numbers
You’re getting 40 new patient leads a month (someone that could potentially become a patient) and you’re spending $2,000 a month on that marketing. That is about $50 per lead, which might seem like a lot. However, say that you’re closing 15 of those leads. Closing 15 of those leads ends up in about $45,000 projected lifetime value, which is really good!
If we go back and divide the $2,000 a month on marketing by the 15 new leads, we get about $133 per new acquisition. We refer to that as CPA (cost per acquisition) and $133 is way below the national average. (CPA average is closer to $200 per new acquisition).
Based on the lifetime value of the 15 new patients, we can now determine the ROI for this marketing. Take the projected lifetime value of $45,000 and divide that by the $2,000 per month marketing cost and we get 22.5X ROI.
A more conservative example:
If we were more conservative and spent $1,500 a month on marketing and earned 5 new patients, would it still make sense?
Let’s find out!
5 new patients would earn a lifetime value of $15,000.
That’s $15,000 new revenue we’re expecting to bill.
We spent $1,500 to earn that revenue, which makes sense!
The ROI of that is $15,000 divided by $1,500, which would equal 10X ROI.
For every dollar that you spend on marketing, you’d earn $10.00 back, which is a no-brainer.
Choose a good marketing firm and set realistic expectations
If you’re working with a good dental marketing firm that knows what they’re doing and understands your goals, lifetime value of patients, and the industry, then you should be able to accomplish these goals.
However, you should be setting realistic expectations. Don’t expect to spend $500 on marketing and earn 30 new patients, that’s probably never going to happen.
Remember that the example of $3,000 per patient is a conservative figure. Many dentists we’ve spoken to estimate a lifetime value of around $4,500 to $5,200!
The key is to track this information. It’s important for your staff to track if the leads booked appointments or if they didn’t.
*And remember to include Secondary Referrals in your calculations. You would NEVER have this wife and kids had the husband not come to you through your prior marketing. Getting an idea of where your calls are coming from will help you to identify what works and what doesn’t work.
You have to know your numbers. You have to pay attention to how many people you’re getting in the door and where they’re coming from. You’ll want to work with a firm that can tell you this information.
If you’re interested in learning more about how to navigate your Online Practice, check out this 1-800-DENTIST founder and dental marketing expert, Fred Joyal Podcast Episode 61: Decoding the Digital Marketing Landscape With Fred Joyal: https://www.youtube.com/watch?v=6jMTyILMyhE
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