By Douglas Sligting, President, Dental Branding
I want to focus on two questions about the return on investment (ROI) in dental marketing:
- What should I expect as a typical ROI in dental marketing?
- How do I improve my ROI?
To understand what kind of ROI you should expect, it’s important to identify typical dental marketing mindsets. Most dentists have a “lottery” mindset. They employ a specific marketing tool and expect a windfall of revenue. One example is a dentist who spends $10,000 on a direct mail campaign and expects to reap $50-$100k in return over a short period of time. While that is not impossible, it is very unlikely. This mindset leads to unmet expectations, a bad taste about marketing, and possibly, poor marketing habits.
The second and correct mindset is what we call the “investment” mindset. You invest in your marketing and expect a positive return that grows over time. An example is a dentist who spends $10,000 on a direct mail campaign and expects to reap $8-$20k in return over the short term and $40-$80k over a five-year period through patient retention and referrals.
It is important to be patient and realize that your return on investment grows as you continue to treat patients over time.
Interestingly, almost anyone would be ecstatic with the return rates illustrated in the “investment” mindset example if this were a stock market investment. In marketing, however, unrealistic rates of return are generally expected. It is important to be patient and realize that your return on investment grows as you continue to treat patients over time. Plan on measuring return rates over a five-year period of time.
There are two ways to answer the next question: “How do I improve my ROI?”.
- Tell a compelling story – Every touchpoint can influence the perceptions of potential patients. These perceptions determine not only if someone chooses you but, more importantly, why they choose you. A good example of this is Nordstrom and Kmart. They both sell clothes, but each tells a very different story about who they are. As a result, each receives a different return on their marketing. Does your marketing tell your story so patients value you as they would Nordstrom or do they value you as they would Kmart?
- Tracking – You should track both the number of patients and revenue per patient for each marketing effort. Over time, this helps you understand which marketing efforts are bringing in a good number of patients as well as which efforts are brining in your highest revenue patients. Once understood, focus your resources on efforts that attract higher quality patients. A marketing effort that brings in 20 new patients a month worth $100 each may not be as effective as an effort that brings in four new patients worth $1,000 each.
Start by seeing marketing with the right mindset so you can set your expectations accordingly. Next, ensure every touchpoint tells a compelling story that creates value. Finally, track results and adjust your marketing based on your returns. A consistent commitment to this pattern will result in not only a better ROI, but also a happier you.
About the Author:
Douglas Sligting is President and CEO of Dental Branding. With over 20 years of brand and marketing experience, the past six specifically focused on practice marketing, Doug is uniquely qualified and possesses a rare understanding of the correct way to market your practice in the dental industry.