Want to know if the money you invested in dental marketing produced an ROI? Of course you do! After all, why spend money on marketing if you can’t prove it was worth it? Even better, prove what marketing worked the best and then reinvest more of your budget in the strategy that’s producing the best results! Measuring your dental marketing’s ROI is simple. You’ll need to know just two numbers:
- The total patient revenue produced by a particular referral source
- The amount spent on marketing for that referral source
Where do I find these numbers?
- Start with your PMS. Simply run a referral report for a specific date period, such as “this year to date.”
- Choose a single referral source (website, social media, direct mail etc) and note the total collections. Enter this in the “collections” field.
- Add up the total spent on marketing for that referral source in the same period of time and enter it in the “cost” field.
- Hit “Calculate.” You’ll instantly know your dental marketing ROI.
Yes, the math is correct! Many people think ROI is calculated as “Revenue divided by Cost” but that is incorrect. The correct formula is actually “Revenue minus cost, divided by cost” because you don’t make money simply replacing the money you spent on the marketing in the first place!
What does it all mean?
Knowing the ROI only matters if you understand what to do with it. All strategies take time to develop, so only measure those strategies that have been used for 6 continuous months or more.
- 1:1 ROI or less: This strategy either needs more time to develop (did you really put your heart into it?) or it’s a turkey. Let it go.
- 2:1 ROI: This is moderately acceptable for a new strategy in its first year. Nurture this one and see if it improves over time.
- 3:1 or 4:1 ROI: Ooh, this is worth your time. Keep investing here.
- 5:1 or higher: Ding ding ding, we have a winner! Put more eggs in this basket because this goose is laying pure gold.
Not sure how to interpret your results? Simply call one of our dental marketing strategists and fill us in. We’ll happily help you figure out if you have a winner on your hands or if it just needs a little love. ROI driven dental marketing is literally all we do.