Let’s continue the discussion…

I'm SO glad today's Friday! Elizabeth and I are taking the kids down to Athens, GA to visit her mother for the weekend. On Saturday morning we're all going to the Georgia Aquarium in Atlanta, and I'm taking Reid (almost 5) and Kenan (3 1/2) to their first Atlanta Braves game in the afternoon! Big day! Then it's a week in the mountains to unwind...but I still plan to keep in touch.

OK...back to business. Last time I mentioned that I was "not working" so I could "go to work" ON my business. It was a great 2 days, and I got a TON of stuff done.

I made one comment about "break even" marketing that I promised I'd elaborate on, which I'll do here. I said that you want to keep all marketing campaigns going that are "break even" or better. Does that surprise you? I'll bet it does.

Almost all "gurus" I read or hear of proclaim that all your marketing should generate a 3:1 return or better to be worth it. They're almost always WRONG. Here's why.

First, let's talk about the actual calculation of "Return on Investment", or ROI. Almost all docs I know calculate their ROI the wrong way, limiting their calculation to only the amount generated at the patient's first visit. (That's if they calculate it at all!)

Problem is, it doesn't take into account the FUTURE business and income generated by keeping that patient for the long term. What you should be most interested in is the "Lifetime Value" of your
patients...that's where the big growth comes from.

Let's say you place an effective print ad in a local "city" magazine. The ad cost is $1000, and you get 5 new patients. That's $200 per new patient. First visit income generated from those patients is $1200 total, leaving an INITIAL profit of "only" $200. Is the campaign successful? IF you have good systems of communications, follow-up, and referral generation, I say it's a SMASHING SUCCESS. Here's why.

Assume that 4 of the 5 patients stay in the practice, and one just doesn't stick for some reason. Total treatment plan value for the remaining 4 patients may be well over $18,000 or even much more. (MY "average" treatment plan value is around $4500...WIDE range). Even if they all move rather slowly with their treatment, can you see how this proposition becomes wildly profitable over time?

Now let's take it another level deeper. Two of those four patients REFER others to the practice! You may note them in your dental software as "referrals"...but they're really a second-level product of your MARKETING. Three referrals from one patient and one from the other, so now you've got 8 new patients as a result of the initial marketing. Your new patient acquisition cost has now DROPPED to $125 per new patient!

Future treatment plans on these 4 new patients averages out to be another $18,000 in my practice. These averages take into account the less frequent huge cases and the more frequent small cases.

So, from the initial $1000 ad you now have a (hypothetical BUT realistic) $36,000 earnings potential! Now, knowing that, do you think it's a good idea to run that ad again?

And again?

And again?

And then look for ADDITIONAL places to market and test?

The key BREAKTHROUGH in thinking here is the reversal of thought that Dan Kennedy so eloquently stated:

"It's NOT that you want to acquire customers in order to make a sale. You want to make a sale in order to acquire the customer!"

That's why "letting go" a little and Giving To Get is so crucial to wildly successful growth.

"Tomahawk CHOP!" (Go Braves...from a true Red Sawx fan)

All my best,
Chris