If I asked how you track your marketing results, what would you say? Most dentists would respond something like this: “I asked my receptionist how the new campaign was going, and she said it was great – we got a new patient the other day.” Now, it might seem reasonable to make a decision to continue (or abandon) your marketing efforts based on anecdotes like this, but it’s not. Anecdotes are not statistics. To know – and maximize – your ROI, you have to track your results. With tracking, you’ll know exactly what’s working and what’s not. Without it, you’ll spend ad dollars in the dark.
Members of patient referral programs like 1-800-DENTIST get free production reports, but every practice can create tools that track patients back to specific referral sources. All you need is staff, software and data. The software organizes the data, but it’s your staff that has to input where every single patient comes from, whether from an ad, your website or a patient referral. Once this data is collected, you can create reports that gauge your campaign results and calculate real figures to guide your advertising decisions.
I suggest keeping at least four tracking reports. Start with one that shows the total number of patients that come in per source of advertising — I call this a Patients Per Referral Source report. Run it monthly, quarterly and annually. Unless you have a huge marketing budget, most of your patients should be coming in from word-of-mouth referrals. If they’re not, rethink how you ask for referrals. Sometimes it’s just a matter of actually asking!
The second report should track the Cost Per Patient by Referral Source. This is where you’ll start to get down to some real numbers. For example, let’s say you have an ad in the Yellow Pages. This report would tell you that it costs X amount to get one patient in from that ad. When you look at these figures, it’s important to remember that not every advertising campaign will yield patients at the same cost. What you want is for all costs to be within a certain range.
Next, create a report that tracks the Production for Each Referral Source. This is where you'll learn your true ROI for each medium. First, look at the initial spending per patient. This number hints at what a patient might eventually spend, but it's not the whole picture! You should also look at the numbers for cumulative production. To do this, you'll need at least three years' worth of data, because you're not going to do the majority of the production from each patient for several months or years. What's important here is that you find out what the advertising is really yielding in terms of lifetime value of a patient.
The final step is to track secondary, or indirect, production. Start with the production of patients who came from other patients, and then track their production back to the original ad source. It's a tricky report to generate, but it's worth calling in your software consultant for help if you need it. Because this is the kind of data that will truly tell you what's working and what isn't. For example, you could get a patient from your website who didn't spend very much but then referred a friend who wound up getting a full-mouth restoration. Wouldn't you want this kind of information? Without it, you could make the mistake of discontinuing advertising that's actually paying off in secondary referrals.
So here's the bottom line: The only way to know your ROI on any advertising is to track it. With the level of knowledge you gain from tracking reports, you can stop guessing and start making more efficient use of your ad dollars.