In this episode of Dental Marketing Mastery, we discuss three more commitments every dentist can make to improve their practice and ROI on dental marketing.
Understand ROI, Close the Back Door, Commit to Capacity
- Understand ROI
- What is exponential ROI?
- The problem with measuring in only 30 day increments
- Tracking first year production
- Projecting ROI on dental marketing
- The problem with measuring first line responders
- Secondary and tertiary responders
Keeping the Back Door Closed
- The pitfalls of being a new patient junkie
- Keeping existing patients
- Practice Analysis Worksheet: email firstname.lastname@example.org to receive it
Commit to Capacity
- The number of days that a patient will wait to see you
- How to reduce patient no shows
- Asking yourself, “If a new patient called today, what’s the earliest I could see him or her?”
Hello, and Welcome once again to the Dental Marketing Mastery series. This podcast is brought to you by DentalWebContent.com and New Patients Incorporated. I’m Howie Horrocks, the Founder of New Patients Incorporated, along with me once again, as my friend and partner and the President of New Patients Incorporated, Mark Dilatush.
Howie: Hello, everybody. And welcome to our podcast.
Mark: Hi Howie
Howie: we think we’re up to 42. Now, aren’t we Mark
Mark: 42. It’s amazing.
Howie: It is amazing. We can still talk.
Mark: It’s amazing. We still have stuff to talk about,
Howie: Oh really yea. Anyway, I just want to give a shout out to my good buddies Rick Coker, and Brian McKay, and Mark Whitmore down in and Rod Kirby down in Texas this weekend, I went down to see them all we had a great time. Rod gave a great presentation and we played a little golf, believe it or not. Hello, all you Texans. I love you.
Mark: There you go. There you go. Alright, so what is on the docket for today?
Howie: Well, we’re I’d like to start with taking a look at dental marketing ROI, you know, where, where’s your money coming from, Dude?
Mark: This is more of an extension of the commitment theme we started a couple weeks ago, right?
Howie: Right commit to really grasping, full understanding of all of the income sources that you actually have, because many of them are not that obvious.
Mark: Yeah, and this is, regardless of who you use for your marketing, if you do your marketing yourself, if you use New Patients Inc for your marketing, if you use some guy named Bob, a lady named Sarah, it doesn’t matter who you use.This is a subject of understanding how to calculate ROI on dental marketing. What exponential ROI actually is, whether or not you can calculate it or count the importance of keeping the back door of your office closed, we’re going to go into a little bit of that that needs to be for sure. A commitment that you make to your practice.
Howie and I would really like everyone to make a commitment honestly, to yourselves and to us. Keep an eye on your capacity. There’s a lady doctor whose first name is Lori, who’s listening to this right now. That last section is going to be for you, Lori and anybody in your particular situation.
So let’s go all the way back up to the top the last commitment podcast we did we ended at tracking your cost source track and listening to your phone calls and understanding that the lady who works at your front desk, who’s been with you for 23 years really honestly has no clue where your new patients are coming from and your new patients lie to you. So that’s basically where we left off.
Mark: And the tracking the call tracking is really a prerequisite to this conversation. So now we, let’s assume that you are actively promoting your practice outside of the four walls that you practice in, you are putting some word on the street or often the Internet, and people hopefully are finding you. And you want to know, what is my return? What is my ROI? What is my return on investment? If I’m going to spend six or $700 a month on the internet, and you really need to get 2000 to $2500 worth of new patient production each month from that investment. Same thing, you know, long term, same thing with almost every promotion you put on the street.
How do we measure that? Oh, we get all kinds of different ways dentists measure ROI on dental marketing. So in order to show you the right way, it may help you to hear some of the mistakes that we see all the time, I’ll get dentist, it’ll send me new patient report for a month, like a certain month, let’s say November 2016. And in that same report will list out the new patients that were saying and it will list out the production that was generated from those new patients for the month, November 2016. And you might see 10 new patients and you might see $1,000 worth of production.
If the doctor spent Whatever, let’s say $2,000 attracting those patients. The doctor calls and says, Hey, I got new patients but I’m not getting I don’t I’m not getting a return. What’s wrong with that scenario? What’s wrong with that scenario is even though it feels and seems logical? Well, to some all you’re measuring is to production from new patients within 30 days.
Howie: Too small a window.
Mark: Right. How many dentists on this phone call produce or complete treatment on their new patients in 30 days? Really? None. Two. Okay so, Two out of the thousands of people who listen to this podcast, okay. But see, it makes sense to the dentist. The dentist is going okay, new patients in November well how much did they bring into me in November because I had a monthly marketing expense in November. I’m going to line all three of those up and see how I’m doing now. It’s obvious that the business of dentistry does not work that way, anywhere on this planet or any other planet. Okay, but that’s overlooked.
They do a 30-day snapshot, how much did I spend how many new patients came in, that’s your patient volume, how much production came in between November 1 and November 30. That’s the money part. And here’s what happens to people who measure that way. They are never happy. Because they will never find a promotion medium that’s ever going to make them happy because their measurement is wrong. Okay so, the only way the only real way to do this right. And to do this consistently, from practice, to practice to practice to practice, almost eerie.
It almost doesn’t matter what practice style it is. Regardless of practice, style, the way to do this is to track your first-year production from your new patients, not your month long. Not just what they produce this month, because in my scenario, the scenario that I hear all the time, the November scenario will call it what if three of those patients came in on December 2 Howie.
Mark: What if they all got $7,000 worth of work? There’s $14,000 in December, that should have been applied to the new patient sources from his November report. He’s never going to see them; he’s never going to realize me and that thing actually worked really well.
Howie: He could go on believing that November is the worst month ever. He’ll close his practice and go on vacation. On a boatload of money.
Mark: Right, exactly. Where that marketing, exercise or advertising Avenue or whatever, whatever it was, whatever the doctor invested money in, he walks away thinking it didn’t work. And then he goes, look for another one. And then another one, and then another one. It’s like this needle in the haystack. Right?
Mark: So how many doctors have we you and I run into in our careers that are that are have come to us saying it’s like I’m looking for a needle in a haystack. Thousands of them, right?
Howie: Yeah, I think so.
Mark: And it comes down to them not understanding the business metrics of dentistry. Right?
Howie: Yeah, this is looking for a one-shot solution. You know, I’m going to put this ad out and get 400 patients it’s impossible it’s ridiculous.
Mark: Right. Right.
Howie: It doesn’t work like it.
Mark: It never does. Right. So even a one-year measurement, even at one year, in the business of dentistry, because let’s go through a scenario. Let’s say that, you know, here’s the right way, the right way to do it is to measure your first-year production from your patients who were attracted by your advertising. Okay, that’s the first step to doing it. Right. So that’s what we’re asking your commitment for, is to measure your ROI on dental marketing on an annual basis can’t possibly do it right on a monthly basis, nor can you do it right quarterly half year. One year is the earliest you can do it right. And it’s still not complete. But that’s a good starting point. So that’s your commit, I’m going to start measuring my ROI on by the year, but even at a year.
Let’s take the same kind of scenario. Doctor comes to me says mark, I don’t know if I’m getting my ROI on dental marketing from my money. Okay, how much you spending? I’m spending whatever $20,000 on this thing. And All right, so show me all the patients that came in the volume of new patients, and show me the production from all those new patients over the last 12 months, and a doctor will come back and inevitably it’s he spent $20,000, it’s only brought in, let’s say $27,000. And it was whatever 13, 15, 20 new patients now, is that a good start a one year ROI on dental marketing analysis is a good start.
That’s where you drop that number into a spreadsheet, and you just keep tracking it every month going forward. But is that even accurate? What if What if two of those 15 patients that he brought in for the 20-grand come in tomorrow after he after he runs his report?
Mark: What if they come in and get their all on four cases completed? What if another $30,000 hits?
Howie: Yeah, exactly presented the case six months ago.
Howie: And, and they Okay, now I’m ready.
Mark: Right? And then when? When is that happened? Happy always almost always happens around the turn of the year?
Mark: Benefits were out benefits renew. Oh, guess what? I’m ready. Right. It’s real easy for us to see how this is even flawed at one year. But one year is the commitment you make you measure your ROI on dental marketing by the year not by the month, not by the quarter. Okay So. So, we already came up with some areas why even a one-year ROI on dental marketing is not actually accurate.
It’s only accurate at telling you the money you’ve already put in the bank. What is it not accurate? at being able to do it’s not accurate at being able to project? Right? to project out? How much more revenue are those 15 patients going to drive into my business over the next year? 2, 3, 5, 7, 9, 20 years? How much more revenue? You don’t know that. But if you spent 20, on an advertising medium, and you drove in whatever, 27,000. And there’s 15, 20 new patients on the books, I think it’s a true statement to say that what you’re looking at on your one-year ROI is the absolute least it can possibly be.
Howie: For one thing. You know, we don’t know how many of those patients are going to refer their friends and family. That’s an unknown, but we do know that it won’t be zero.
Mark: And that’s the next part of the commitment of understanding and measuring ROI on dental marketing, which is all I’ve discussed all the way up to this point. Our first line responders to advertising here’s, here’s what a first line responder is. even spend money on advertising, your phone rings, a new patient makes their appointment comes into your practice. And you do X dollars of dentistry to that person, the original first line responder, okay 99.99999% of the dentists listening to this only measure first line responders.
Now, those same dentists will boast to me that they have a 46% referral rate. Patients especially good patients are referring usually their children, six months later, their husband kicking and screaming, maybe a friend or two co worker two these are your secondary and tertiary referrals from your first line responder. What is the ROI value of those people? How much production did they bring into your practice? Doctors were just trying to open up your mind.
Howie: Yeah. Yeah, many, many, many docs will not consider that. They won’t source it to the original, medium or marketing effort. For somehow for some reason. It’s not it’s not related. What do you mean is not related?
Mark: Right. Right.
Howie: Patient shows up from having listening, listen to your radio spot, plunks down some money. And then, you know, a year later gets her friend to come in, and it’s not related to the original marketing effort. Of course, it is.
Mark: Yeah, of course it is. Or she’s the head of her church, and, you know, 93 people come in, and they bring their kids and their husbands and their family, right. I mean, it’s almost and Howie’s right, it. It’s never measured. And honestly, we’re not. This is not a critique of the dentists listening to this, none of you can measure it. There’s nothing in any of your software that says, Give me a viral referral report. It doesn’t exist. It’s, you know, it’s we’re not saying it’s your fault.
We’re simply saying, just because you don’t have a referral, viral referral report is a selection in your practice management software does not mean that your first line response do not refer. And it definitely does not mean that you shouldn’t consider the production from those referrals, whether secondary or tertiary to be a part of the ROI on dental marketing calculation, because they should be.
Mark: Okay. That’s what we’re saying. So that same $20,000 investment that initially showed $27,000, in one year, first line, revenue held that could be worth $175,000. And if you don’t chase it down, and you don’t look for yourself, nobody’s going to look for you. Nobody’s going to be you’re going to make bad decisions, absolutely, going to make bad decisions.
Howie: Yeah, you know, and then it gets, you know, like you said, it’s almost like a tree with lots of branches on it, you know, there’s primary first line, there’s secondary, there’s tertiary, there’s a lot, I don’t know what the word is for fourth.
Mark: It’s Ancestry. com.
Howie: There you go. Yeah
Mark: I mean, yeah, I mean, if it’s a whole tree starts at you, and all the branches.
Mark: Exactly, it’s so now. From the, what we just described was exponential ROI, exponential ROI in a dental practice our any secondary, or tertiary referrals and the production from the secondary or tertiary referrals. Beyond the first line responders, you always measure your first line responders on an, you know, by the year so every month, you go to your practice management software, you go Okay, give me the production by referral source report between last year this date to today’s day, you run your report, and knows your first line responders. And you just jot them down on a spreadsheet. This referral source advertising source, netted me or got me X dollars produced X dollars.
From first line responders now, once every quarter or once every year, or once, whenever you just want to take a look. list out all those first line responders and then go look for them as referral sources. And you’re going to find that on your ROI on dental marketing grows exponentially. If you promote properly and you target the right people in your community. And you attract value minded dental consumers to your practice, they will refer like kind value minded human beings. And you will see that the average revenue per patient that you enjoy in your first year will be almost identical to the average first year revenue that they refer into your office. It’s wonderful. If you look at it from a business metric standpoint, it’s Nirvana from a business standpoint.
Howie: It’s DNA.
Howie: Yeah, it’s the holy grail and will continue pretty much for the life of your practice for as long as you know, obviously, you don’t make somebody mad, or as long as they don’t die or move.
Mark: Or move. Right. Right.
Howie: All of these people are going to be with you probably for the life of your practice.
Howie: Okay, and how much is that worth?
Howie: If you were to if you were to go into the future and see that, and then come back to the present, where you decided, oh, that wasn’t a good enough ROI on dental marketing. I think I’m canceling this radio thing or this internet thing or this direct mail thing. Because, you know, you would shoot yourself.
Mark: Yes. Yeah. Because you’re going to be, you’re going to be looking for a replacement for the rest of your career.
Mark: So another key commitment we’d like you to make to yourself is is making sure that the back door of the practice is as closed as it can be, we understand people die, people move people, you know, people, change jobs, change insurance. There are all kinds of reasons. Oh, heck, there’s, there’s, you know, insurance companies are pulling their shenanigans in different states throughout the country right now. There’s going to be, um, I’m not going to say it’s going to be an exodus, but it you’re going to have attrition. And a lot of those dental offices, you know, who choose not to bow down to the insurance company. The commitment is to, is to keep an eye on your on your back door. Keep an eye on the people who are overdue for repair.
Howie: Yeah, you don’t want to be, and we get we get this all the time. Initially, as you don’t want to be a new patient junkie. Right, where you just have to have a billion new patients, or you’re, you’re going to die. Right? Yeah, that all comes from closing the backdoor. It doesn’t do you any good marketing wise, if you spend all this money, and you get some good patients and then do just sloppy service or something else that might be more under your control, and you think you lose them, and you constantly have to replace them?
Howie: That’s not a good scenario.
Mark: No, it’s not. And what you would do is you would run an overdue recall report once a month, I actually have a spreadsheet. You know, what, if you want this spreadsheet, it’s a it’s a difficult spreadsheet to adhere to, because you have to run reports on the same day, or about the same day every month. And you have to drop the data and the reports are simple to run. The spreadsheet is unbelievably simple to I mean, it’s made for you just drop the data in it. Um, but email Josh, Josh@newpatientsinc.com and just put practice analysis worksheet on the email. And, and I’ll get you the, I’ll get you the spreadsheet. But anyway, what you’re looking for is it is the number of overdue recare patients going up, is it stable level, or is it gone down?
Stable level is okay, as long as you have enough people walking through your front door. If the number of people walking through your front door is equal to the number of people walking out your back door, your revenue is going to plateau. Duh. If the number of patients walking through your front door is greater than maybe double the size of the patients who are walking out your back door, your practice is going to grow. You’re going to need more hours, maybe more chairs, maybe even more dentists.
If the number of new patients that are coming through your front door is a half or less than half of the number of patients walking out your back door, your revenue is going to decline if they haven’t already decline are going to decline in at least six months. or excuse me at the most six months. It’s a foregone conclusion it’s going to happen.
This is one of the key indicators is watching your overdue require patience. And we’ll have a podcast on recare. Because I have a whole half hour event on help dentists do their repair systems. But that’ll come in a different day. Last commitment for this podcast that we’d like you to make in this is for Dr. Lori. And for anyone else who can’t be seen by a new patient or makes it difficult to be seen by a new patient within eight workdays. Eight workdays. I’ve been saying we’ve been saying this for I don’t know what 15 years.
Mark: it’s the magic number of eight.
Mark: And when I say that to a dentist, they normally go eight geez that doesn’t seem like it’s booked out at all. The magic number eight describes the number of days that a patient would wait to see.
Howie: Business days.
Mark: Business days. Okay so, when you get to eight, you are perilously close to creating a scenario where you begin to get less impact for your marketing dollars. Because you will attract new patients they will call and if they call in your front desk person says, well, the doctor can see you three weeks from now, there’s a real good chance that new patient is going to choose somebody else.
Howie: Right, but you know what, they’ll probably go ahead and accept the appointment.
Mark: That’s what they normally do is they accept your appointment having zero responsibility or relationship with you. They go and make another appointment in a different dental office and blow your appointment off.
Howie: Exactly. And they won’t bother a call, of course.
Mark: How many dentists have had new patient no shows in the past, you might want to align that up with how busy you are at the time. Because a lot of times it’s a cause and effect relationship. The busier you are, the more new patient know shows you see. That’s the cause and effect. One of the commitments we’ve asked you to do, or we’d ask you to keep in mind is that number eight. If a new patient called right now not an emergency, we understand you get emergencies in the same day we understand if a new patient call today. Go out look at your schedule right now. When is the next time you the dentist can see that patient when’s the first time you can see that patient?
Now, if you want to add something realistic to it from a marketing angle. Let’s say let’s add something like a time of day. I’m going to give you a break for in the afternoon. I’m the patient I’m calling your office. I prefer four o’clock in the afternoon appointment I’ll even give you it could be Tuesday or Thursday. How many days would it take you to see me on a Tuesday or Thursday at four o’clock in the afternoon? If the answer is more than eight days, you are getting near or you’re beyond your capacity. If you are, it’s probably time to ratchet back your advertising and think about expanding your capacity. Okay. I know you probably never thought you’d ever hear a marketing company say that. But it doesn’t make any sense to advertise to anger people. You are spending money to disappoint someone.
Mark: that never makes any sense, right
Howie: And it’s almost a forced growth thing. If you do want to else, not everybody wants to grow their practice fine, if you want to stay level and then like Mark said, dial back on your marketing. But if you want to grow, you might have to look at bring in an associate partner.
Mark: Add some rooms,
Howie: Add some ops you know, more staff, that sort of thing to take care of the demand that you are creating,
Mark: Right. Get somebody in to teach you how to schedule properly, appropriately. Maybe go to 12-hour days, whatever, whatever the scenario is for your perfect life. It’s right in front of you, if you’re in that particular situation, you can mold this practice to be basically to be whatever to me or whatever. Whatever life and career you want to build. Just don’t try to advertise your way through it. Because we’ve had dentists who have come to us and said, Yeah, Mark, you know, we’ve been using this company x over here, and not really happy with the results. And you know, invariably I’m like I doesn’t make too much sense.
I asked him right off the bat, I say Geez, Doc, you know, if I’m a new patient, not an emergency, and, you know, four o’clock on a Tuesday or Thursday is good for me even a Monday is fine. You know, how far out Am I going to go and if they say you know, March 3, like that’s part of your problem, no marketing company in the world is going to be able to generate more new patient flow at a capacity that’s already filled, fill up a water glass with water and try to squeeze more water into it without making a spill. It doesn’t, it doesn’t, It doesn’t work. The table gets wet. So that’s what happens on the back end. There’s a good side and a bad side to these commitments. That’s it for today Howie.
Howie: Yeah, that that was good. Thank you all out there for listening. And we’ll look forward to connecting with you again very soon. Bye now.