Dental specialists, of course, want to grow their practices. Unfortunately, many are going about it without a marketing plan. Dental Economics conducted a survey that found over 50% of dental businesses don’t effectively track the results they get from their marketing efforts.
You could be potentially wasting over half of the revenue you bring in by not tracking your results. However, with a professional marketing team on your side, you can ensure that your efforts are effective. One important step you should be taking is measuring the return on investment (ROI) of your dental marketing. You should also be keeping track of how you’re spending your marketing budget.
Short-Term ROI and Long-Term ROI
When it comes to short-term ROI, you’re looking strictly at quick profitability. This is typically a specific channel or campaign, like radio or pay-per-click. The formula for this is: ROI% = ((Revenue – Cost) / Cost) x 100.
You just subtract the amount of money you spent (cost) from the amount of new patient fees you brought in (revenue) and then divide the difference by the cost. You can then convert to a percentage by multiplying the result by 100.
With long-term ROI, you’re taking a more thoughtful look at your dental specialist marketing strategy budget, because it takes both your upfront and ongoing profits you’ll generate from every new patient into consideration and continues tracking the entire time they are active at your practice.
Securing the Correct Data
There are certain essential pieces of data you’ll need to calculate and measure your long-term ROI accurately. Some important pieces of marketing data may include:
- Determining a certain time frame (i.e. the past six months)
- Calculating the amount you spent during that period of time on marketing
- Figuring out how many new patients your marketing efforts brought in
Some important pieces of data of your dental practice itself may include:
- The approximate amount of revenue you bring in per patient each year
- How many years, on average, your patients stay active at your practice
- How many referrals patients send you each year
ROI is one of the most crucial key performance indicators (KPI) for businesses and marketers. Marketing, no matter what the strategy is, isn’t free, so you’ll need to know that you’re bringing in enough profit to justify what you’re spending on your marketing activities.
Why Is ROI So Important?
There are a few reasons why ROI is so vital to marketers and, ultimately, for your dental practice. These include:
Prove You Have a Profitable Marketing Strategy
ROI is not the only way to measure the success of your marketing efforts, and it certainly isn’t a perfect KPI. However, it still is a useful way to measure marketing success.
ROI is such an essential metric because it can help establish that your marketing campaigns are profitable. For instance, if you invest $38,000 each year in your marketing efforts and you generate $100,000, that’s a profitable marketing campaign.
Calculate Growth Potential
Another reason ROI is vital is because it can help you calculate growth potential. If you achieve a 163% ROI on your marketing strategies and bring in $100,000 in revenue from your $38,000 investment, you should be able to double your profit (in theory) and profit by doubling your investment. However, it doesn’t always work as easily as this. Even so, ROI gives you a solid indication of your dental practice’s growth potential and enables you to pinpoint precise marketing methods that will be worth increasing your investment.
Keep Your Marketing Budget Protected
ROI is additionally an invaluable measure of failure and accurately identifying marketing methods with negative or underperforming ROIs. These types of measurements can help protect your marketing budget — maybe even your entire dental business.
Just because you’re experiencing a poor ROI on a certain strategy, this doesn’t necessarily mean you should pause or abandon it altogether. Once you identify underperforming campaigns or strategies, you can take steps to optimize them to help boost their performance and increase the overall ROI of your marketing strategies collectively.
Along with this, you can also measure your high-performing campaigns and learn lessons that, when applied, can help improve the results of campaigns that are less successful.
Get Help With Your Dental Marketing Campaigns With Market My Market
Marketing is an important part of your dental business. However, to make the most of what you spend on marketing, you need to have the knowledge and know-how to measure its results. Or, you should at least have an experienced marketing team like Market My Market to help you with all your marketing and metrics.
We are proud to say our team comes with distinctive experiences and unique backgrounds. We are committed to the success of each and every one of our digital marketing clients and strive to bring them the best results possible. Give Market My Market a call today at (866) 270-2250 or fill out our online form to learn more about our marketing services and how we can help you effectively measure the ROI of your marketing efforts.