Episode 78: How Much Should a Dentist Spend For a New Patient?
What was discussed?
Quote of the day: “A person who has never made a mistake never tried anything new.” – Albert Einstein According to a couple different surveys and reports, the average value of a new patient is about $1000. 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 $2000 a month on your marketing. That is about $50 per lead, which might seem like a lot. However, say that you’re closing 17 of those leads. Closing 17 of those leads ends up in about $17,000 projected lifetime value which is really good! If we go back and divide the $2000 a month on marketing by the 17 new leads, we get about $117 per new acquisition. We refer to that as CPA (cost per acquisition). Based on lifetime value of the 17 new patients, we can determine the ROI. Take the projected lifetime value of $17,000 and divide that by the $2000 per month marketing cost and we get an 850% ROI.
A more conservative example:
If we were more conservative and spent $1500 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 $5000. That’s $5000 new revenue we’re expecting to bill. We spent $1500 to earn that revenue, which makes sense! The ROI of that is $5000 divided by $1500 which would equal 330%. For every dollar that you spend on marketing, you’d earn $3.30 back, which is a no-brainer.
Choose a good marketing firm and set realistic expectations
If you’re working with a good dental internet 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 expect to earn 30 new patients, that’s probably not going to happen. Remember that the example of $1000 per patient is a conservative figure. Many dentists we’ve spoken to estimate a lifetime value of around $2500 to $5000!
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. 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 identifying where your traffic is coming from, check out our previous podcast Episode 77: How can I tell how many visitors I get to my website?
If you’d like to know more about how you can increase traffic to your website so that you can show up higher in the search engines, check out our free SEO Analysis. Every website has a score and you’ll need to know what yours is! We’ll compare you against your competition, look at your main keywords and see where you rank, look at your social interaction (and that of your competitors), and we’ll look at your backlinks! This report is manually done and manually reviewed and we present all of the information you’ll need in a beautiful PDF report. To pick up the report, head to our Analysis page and we’ll be happy to get started.
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