Orthodontists, brilliant with braces and masters of math . . . often find themselves less versed in the art of marketing. While the majority acknowledges the importance of marketing for expanding and scaling their practices, many may not possess a comprehensive understanding of how to judiciously allocate their marketing budget.
This article aims to simplify the complex equation of marketing budgets for orthodontists. We’ll delve into determining your optimal marketing budget, understanding the returns on your investment, and ensuring a positive yield on your marketing endeavors. Let’s break it down systematically.
Before delving into the dollars, it’s crucial to establish clear and attainable goals for your marketing budget. In conversations with fellow practitioners, I’ve encountered the ambitious desire to spend $2000 on marketing and expect a bounty of 20 new patient starts…
… a wishful scenario that, while tempting, isn’t a frequent occurrence.
In the realm of marketing, we often gauge success through ROI, or return on investment. The concept is straightforward: invest $1 in marketing and reap more than $1 in profit.
The encouraging news for orthodontists is our industry’s substantial profit margins, making a positive ROI not just plausible but quite achievable.
Assuming your average case fee hovers around $5000, factoring in various case types (braces, Invisalign, phase I, complex cases, etc.)…
…and your practice maintains a 50% profit margin (total revenue minus expenses)…
…the profit per new patient equates to $2500.
In theory, you could allocate up to $2500 to acquire a new patient and break even, resulting in a 1:1 ROI. In many sectors, breaking even on customer acquisition is the goal, as it often paves the way for repeat business and referrals.
Fortunately, in orthodontics, the cost to acquire a patient falls significantly below the $2500 mark. Let’s break it down with an example:
Imagine a $6000 investment in a marketing campaign yielding 6 new patient starts. While some might initially perceive this as a failure…
…applying the marketing math reveals that these 6 patients translate to $30,000 in production or $15,000 in profit. Despite the $6000 expenditure, the return on investment stands at an impressive 2.5:1.
In my own practice, we consistently achieve a 5.5:1 ROI for our social media marketing. When setting your marketing budget, the goal should be to secure a positive ROI, ensuring that the dollars returned surpass your initial spend.
If you’re inclined to set numerical targets for new patient acquisitions, read on for more insights…
In the journey of my practice, there have been numerous instances where we set the ambitious goal of starting a specific number of patients each month. Armed with this target, the strategic move was to work backward, meticulously calibrating our ad budgets to ensure the realization of our goal.
To execute this method, a few critical values come into play, including:
In my practice, having diligently tracked these metrics, I can confidently assert that both our “show up” and conversion rates hover around 50%. While one might wish for a higher figure, this is a realistic expectation.
So, breaking it down: out of the new leads acquired from platforms like TikTok, Facebook, or Instagram, 50% will make it to their new patient appointments. Similarly, out of those who get an exam, 50% will start treatment.
With these numbers in mind, the equation becomes clear: to secure 1 new patient start, I need to generate 4 new patient leads.
Therefore, if the monthly goal is to initiate 20 new patients . . . the targeted path involves acquiring 80 new patient leads. This reverse-engineering approach allows for a more precise allocation of resources, aligning your budget with the concrete objective of patient starts.
Now, let’s crunch the numbers to determine how much we need to spend to hit our new patient starts goal. To do this we will need to know our cost per lead. The cost per lead signifies the expenditure on platforms like TikTok or Facebook to acquire a new lead.
In my practice, this figure rests at approximately $100. A $100 investment results in a new lead, and typically, for every $400 spent, a new patient start treatment.
So, with the goal of initiating 20 new patients in a given month, the math unfolds:
Breaking it down: an $8000 spend yielding $50,000 in returns equates to a 6.25:1 ROI.
While these numbers are hypothetical, the underlying principle remains steadfast. By plugging in the actual figures pertinent to your practice, you too can navigate the realm of certainty, calculating the precise marketing spend required to realize your goals.
Ready to dive into the nitty-gritty of your practice’s marketing budget?
Click below to snag your complimentary copy of my ROI calculator. Alongside, there’s an instructional video that walks you through the intricacies of this tool. It’s a resource designed to empower you, and yes, it’s completely free.
My aspiration is that this information proves to be a valuable asset for you. Now, equipped with this knowledge, you can confidently move forward, crunch the numbers, and ascertain your marketing costs with precision. Here’s to steering your practice toward more accurate and effective growth. Happy calculating!
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