I got an email from a veteran marketer Ben Altadonna who had a great point that I feel compelled to share with you.
How much are you willing to spend to procure a new customer?
How much is an average customer worth in your office? – The more a customer is worth, the more you can afford to spend to “get one”.
Do you get a lot of referrals? – If, lets say, on average 1 out of 3 new customers refer a customer to you and an average new customer is worth $1,000. Knowing this, you can add $333 to the average value of each new customer who was not referred to you.
If your overhead, not counting your salary or “take home”, is around 50%, then add MORE new patients/clients to your practice, you should be willing to spend UP TO HALF of what each customer is worth. If you did this, your practice would grow faster and still have a 50% profit margin.
Do you know how much you are spending NOW to attract a new customer?
You can and should do this 2 ways;
One, to find out how much on average ALL the new monthly customers cost you to attract and Two, how much JUST the “non-referred in” customers cost you.
You collect an average of $20,000 a month and get an average of 15 new customers of which 10 are referred in and the other 5 come from other means.
And let’s say you spend a TOTAL of $1,200 in “in office” and “external” marketing, promoting, and customer communication.
$1,200 divided by 15 new customers = $80 (This is cheap and proves the value of referrals!)
Now take your total monthly collections and divide it by the # of new customers you average per month who were NOT referred in. (Don’t count the customers who were referred in.)
$1,200 divided by 5 = $240.
What does this tell you? If you want more new customers, you must be willing to spend up $240 to get a new “non-referred in” customer.
I hope this exercise added some reality to your practice and the marketing math of practice building.
Watching Your Back,
Ben Altadonna, D.C.
/END of email
This is such a great explanation of the fact that you need to look at your acquisition cost and lifetime value of each customer.
SO many Doctors still believe in being cheap on websites and internet marketing because companies before ours would just sell cheap crap for $50 to $100 per month.
I did a survey of Doctors that get my ebook and ask how important is internet marketing for their practice.
It is never a surprise that the answers are almost always the same!
Doctors that see least patients per week spend less the least per month and get least new patients per month and think the internet is only somewhat important.
WAKE UP! You have to spend money to make money.
HUSTLE, MARKET, SELL.
Find People to TELL THE YOUR STORY TOO.
Get them to PAY, STAY and REFER.
Stop whining about being broke
Too many Practice Owners refuse to sell, refuse to be a great entrepreneurs and refuse to get out of their comfort zone.
Today you can change!
Figure out your average cost to acquire a new patient. Try to improve that number working with a conversion optimization company (Like us!)
But then ho many times can you spend that amount and get a new patient? You will exhaust certain channels at a certain spend amount. For example with Google Adwords you reach a point where continuing to increase you budget only increases your cost to acquire and not the number of new patients. But then you can add other channels, Facebook, SEO, Direct Mail, etc.
I have yet to met any doctor that has exhausted all channels.