New Patients, Inc.

New Patients, Inc. is an advertising agency exclusively for dentists. We create and deploy advertising that brings quality new patients to our client practices.

Issue: # 2 November/2007
News You Can Use from New Patients, Inc.
Dear Barbara,

Getting high quality new patients to call your practice is what our company has been all about for the last 18 years. Our goal for these periodic newsletters is to give helpful marketing advice that will assist you in building your practice. In this issue we have articles by Mark Dilatush and me.

Warm regards,
What is the REAL Return on Investment for your Marketing Dollar?
By William Howard (Howie) Horrocks

Are you wasting your advertising money or is it actually paying off? Will you ever be able to achieve a completely referral based practice or are you doomed to spend more and more each year on marketing?


To answer these questions, you need to consider, Marketing; the Four Levels of Return. And know this: at least two of these levels are often overlooked. Failure to take these into account will give you a wildly inaccurate picture of the REAL return on your advertising dollar.


LEVEL ONE - The Initial Responders


Let's say you are sending a direct mail piece to homes with certain specified income levels and into zips codes that are near your practice. Or, you are running a print ad in a local magazine (or any other kind of advertising for that matter.)


The first level of return is of course those who respond and make appointments and actually show up to receive and pay for dental treatment. We call these the Initial Responders.


The income generated from these responders can be traced very directly to the mailings (or ads) that you have done. We suggest that you keep a copy of all of your external marketing pieces out at the front desk. For the patients who don't remember how they found you - show them your marketing piece(s). They will most certainly recognize one of them! The income from initial responders can occur on the first visit but can also occur on subsequent visits as the patient completes your treatment plan.


When considering return on investment, most dentists stop at the initial responders. They figure that if the initial responders do not produce at least a 3:1 ROI then the mailing (or other medium exposure) is a failure. This is a mistake and will cost them, and you, LOTS of money if you're making the same mistake. Why? Because there are at least three additional income streams that you are probably not fully considering. If you bail out early you won't realize your complete ROI.


LEVEL TWO - Referrals


If your practice is like most others, the biggest source of new patients comes from referrals. (If this is not the case and your patients aren't talking about you or referring their family and friends, then you've got much bigger problems than poor marketing!)


So your second level of return is the income generated by the referred patients. Now, we don't know how many of the Initial Responders will refer their family and friends - all we know is that it WILL occur to a large or small degree. A an effective way to measure your referral rate is to divide the number of patient referrals each month by the total number of new patients. For instance, let's say you get 10 new patients each month and 5 of them are through direct patient referral. That's a 50% referral rate. Let's now say that you start marketing and 16 new patients a month are the norm. A referral rate of 50% would produce 8 patient referrals a month. Once you start marketing externally, you will also see your patient referrals going up.


All income from the referred patients of the Initial Responders can be sourced to the original mailing or ad.


LEVEL THREE - Referrals from the Referrals


The patients referred by the Initial Responders will in turn refer THEIR family and friends. Again, we don't know how many or how often but we can safely assume that there will be some degree of referring going on.


Actually this third level of return can and does go on for years (really for the life of your practice when you think about it!). In other words you will end up with a genealogy or "patient family tree." Because the referred patients refer other patients who in turn refer others, ad infinitum, the tracking of all this can be tricky. That's why it's almost NEVER DONE.


This is understandable and we know of no dental software that can actually do this (although it seems to us that it wouldn't be that hard to program!) But even though it's not tracked, the fact remains that you are and will be MAKING MONEY from these third, fourth, fifth and subsequent referrals for the entire life of your practice.


ALL of this is sourced to the original marketing effort - your mailer or ad or whatever it was that brought in Initial Responders. THAT'S where it all started wasn't it?


LEVEL FOUR - Referrals Ad Infinitum


Here we introduce the element of TIME.


Let's say you do a direct mail program that consists of 5,000 mailers per month for 10 months. That's 50,000 pieces of mail spread out over most of the year.


Let's then say that the mailing program produced a total of 50 Initial Responders. (This is quite conservative by actual historical tracking over the last 15 years by our agency) which in turn generated X dollars.


Out of the 50 Initial Responders 15 referred family and friends.


These 15, over the course of the year, referred 4 patients.


These 4 referred 2.


The total for the year? 71 patients.


The fourth level of return says this; a percentage of these 71 patients (maybe 100% but more likely less) will be with you for many YEARS. Even if you totally complete their cases, they will at least be in recall until you either make them mad or they move away or die. And if that's not enough, an unknown - but not zero - percentage of these 71 patients will continue to refer others.


Natural attrition will of course take its toll but you still can count on many years' worth of income from a significant portion of the previous three levels of return.


And if you REALLY want an accurate picture, track ALL these levels of return for FIVE full years. We are confident you will be amazed at how well your initial investment has paid off over this time period.


LEVEL FIVE - Going Organic; All Referrals, All the Time


Didn't I say there were only FOUR levels of return?


There's actually another one.


The new patients added to the practice because of your marketing efforts and the resultant referrals will take you to a point where you can actually decrease your marketing budget - perhaps eventually to zero.


This is what we call "going organic." The practice now grows itself organically - on referrals alone.


Here's hoping that you too can go organic!

Active Patients Analyzed
By Mark Dilatush
Mark DilatushIn this section of the NPI newsletter, Mark Dilatush will give you step by step homework (if you will) that you can easily implement with each installment of the newsletter. If you miss an installment of this newsletter and want to catch up, you can see previous installments here:


Last month, we talked about how to set up a very simple spreadsheet that, in time, will actually help you predict the future of a dental practice.


Why is this important? Dentistry is a phenomenal business. It really is. Yes, it can be frustrating, confusing, almost seem impossible at times - but the bottom line is - dentistry is a great business. Dentists are LATE to take corrective action within their business. This doesn't make sense. Dentists are ALWAYS on top of the latest clinical techniques, tools, & materials. For the next couple of installments of our E-newsletter, it is our goal to help you actually SEE what's coming within your business using example data from a fictitious dental office owned by Dr. I.M. Reddy. Please forgive me if your name actually is Dr. I.M. Reddy.


Let's take a look at our example today.



Dr. I.M. Reddy







Active Patients


Avg Rev/Pt






















































Analysis of Data:

(for education purposes, let's pretend Dr. Reddy doesn't KNOW this information and has asked all of us for our interpretation of the data from the practice)


Dr. Reddy is most likely "feeling" the following symptoms/pressures:


The schedule is looking less and less filled as time goes on.

Dr. Reddy is working just as hard but earning a little less.

Dr. Reddy is probably putting more and more pressure on the front desk to fill the schedule.

Dr. Reddy may feel the problems are from a lack of effective marketing.

Dr. Reddy knows the practice overhead almost NEVER goes down, so there's even MORE time pressure.


The data is TELLING (as opposed to "feeling") Dr. Reddy the following:


It makes absolute statistical sense that Dr. Reddy's schedule shows more openings. Dr. Reddy has lost 5% of the truly active patient base in the past 12 months but maintains the same space, number of doctor hours, and office hours. Doesn't that make sense to you?


Dr. Reddy's marketing is likely NOT the culprit. Look at the average revenue per active patient. The "quality" of the patients being brought in is still supporting the same average revenue per patient. Unless new patient numbers have dropped off dramatically - this is not necessarily a practice promotion issue. As a matter of fact, the quality of Dr. Reddy's patient base is the ONLY thing keeping revenues on a SLOW decline. If it weren't for that, Dr. Reddy's practice would be in free-fall mode.



Dr. Reddy's back door is wide open. More patients are leaving the practice than are coming through the front door (and staying). I would certainly look deeper at month to month new patient numbers (btw, monthly new patients is a wonderful use for the column on your spreadsheet next to Avg. Rev/Pt), but we would likely see fairly consistent month to month results. Why do I think that? If there were a trend decline in new patient numbers, the revenues would be falling faster than they are.


Treatment Plan for Dr. Reddy with this data:

Close the back door.



A calmer, less stressed, more properly focused Dr. Reddy.


Next month we take a look at another set of data and provide more analysis.


Mr. Dilatush has a unique combined background in dental technology, dental practice management, practice marketing, and dental business analytics, which was built over the past 23 years in dentistry. He and his team are responsible for building client marketing plans that pose the least risk to client marketing budgets with the highest potential return. Howard Farran said of Mark, "multitudes of dentists have benefited from the wisdom and integrity that Mark brings to every project. His thoughtfulness and sincere approach has aided scores of dentists in finding their path to greater dental success."
We hope you've enjoyed our newsletter. Please let us know if there's a particular subject you'd like to hear about. And we always appreciate your feedback.

Warm regards,
In This Issue
What is the REAL Return on Investment for your Marketing Dollar?
Active Patients Analyzed
Quick Links
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New Patients, Inc.
The ad agency exclusively for dentists
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5935 Edmond Street, Suite 105
Las Vegas, NV 89118
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