ROI – Beyond the Bite

What is “Plan B?” The New Normal in a Post-Irma World

by Florida Dental AssociationSeptember 21, 2017September 21, 2017Leave a comment

By a Fellow FDA Member

Call it intuition, but I had the feeling we —and the entire east coast of Florida — dodged a bullet last year with Hurricane Matthew. It just seemed like a matter of time before our 13-year dry spell was going to end.

I desperately wanted to be wrong, as I watched CNN every evening for the latest update on Hurricane Irma, and the National Hurricane Center for the more elaborate interpretation.

The memories of spending another post-Labor Day weekend away from home (Hurricane Frances, 2004) sadly is still too vivid in our memories. I worked as a dentist a total of four days that month, and two of those were without air conditioning — which is a testament to the determination of my staff and my patients to create a sense of “normalcy” in the aftermath, despite the obvious disruption to our personal lives.

Doctors, it is time for “Plan B.”

Depending on where you are in your practice career, it may not make economic sense to “build over” before or after your insurance adjuster has given you the final assessment. For dentists with more than 25 years of practice, the return on investment may not be in your favor at such a late period, as the current tax laws for business owners after 50 provide decent “catch-up” provisions in a defined benefit (like a government pension) and defined contribution (401K-type) plans that would be more beneficial.

For a mid-career solo practitioner, you have been faced with rising overhead costs since 2007, and along with diminished income (ADA Health Policy Institute has the data), the time is ripe for a multi-doctor practice formation, which should always be created with expert legal and financial advice.

Look “around the neighborhood” and reach out to other dentists who may share the same dilemma you do. If you have damage to your office, and someone nearby does not, now would be the time to construct a well-defined contract that outlines the term and time limit for this new arrangement. And if the relationship works on a limited basis, you may find the new arrangement something you want to solidify.

Likewise, if your office came out unscathed, reach out to your colleagues in this period and strategize. This is not a DIY project, so retain the professional advice you need to make this happen. Involve your bankers and financial advisors for expert advice.

In closing, I want you to know that I understand what you have gone through, and I look at 2004 as a defining year in my professional career. The decisions I made after these disasters guided me to where I am today, and my family is better for it.

Make the right choice for your loved ones and your staff members, and don’t be afraid to execute “Plan B!”

How to Calculate Your Marketing ROI

by Florida Dental AssociationAugust 31, 2017August 31, 2017Leave a comment

By Sarah Woods, Core Dental Solution

In my last blog post, I outlined the important key performance indicators (KPIs) to determine how well your practice’s marketing tactics are working. I discussed eight of the most important KPIs for every dental practice and the ones I often use as the directors of the overall marketing strategies I create for my clients. These KPIs are sales revenue, cost-per-lead, traffic-per-lead ratio, lead-to-customer ratio, number of calls (leads), patient retention percentage, number of patients reactivated and new patient source.

Before we start, what’s a lead? A lead is a prospective patient who has reached out to your practice in some way. This could be a phone call, a walk in or a website inquiry. A lead is different than traffic. Traffic is the people who go to the website, social media page or see your advertisement.

Now, let’s breakdown these KPIs and understand how each is calculated.

Sales revenue: It is important to look at both the production and collection numbers every month. Production is the raw amount before collections, adjustments and overhead is subtracted. When determining whether marketing efforts are working, production is more reliable than collections because many factors can affect collections. For example, marketing is not related to whether the correct copays are collected, how much insurance is adjusted or the amount of overhead.

Cost-per-lead: This measurement is important when determining how much a practice is spending for each lead. Simply divide the cost of marketing campaign by the total number of leads, like this:

cost of marketing campaign
total number of leads

Traffic-to-lead ratio: This measurement is what I use to determine whether a marketing campaign is effective. It is calculated by converting the traffic to leads into a ratio, (traffic : leads). Remember, the traffic is everyone who sees a campaign, website, etc., and leads are the amount of people who reached out to the practice in some way. For example, to see how a website is doing, its analytics are used to determine the traffic. Leads can be measured manually (a staff person collecting information and documenting how many calls are coming into the practice) or with call-tracking.

Lead-to-customer ratio: This KPI is similar to the conversion rate in that it determines the amount of leads that convert to customers. The ratio is leads : customers, and can also be reduced.

Number of calls (leads): It is crucial to track every lead. The most effective and reliable way to do this is by using a call-tracking service. I don’t recommend staff members tracking leads because these numbers are significantly less reliable. This KPI is the foundation for the rest and it is crucial that it’s accurate.

Patient retention percentage: This KPI is calculated to determine the percentage of patients retained in the practice. It is calculated by taking the difference of the number of deactivated patients from the total patients, and then dividing by the total patients and multiplying by 100, like this:

(Total patients- deactivated patients) x 100 = Patient retention %
Total patients

Patient reactivation percentage: This KPI determines how many overdue patients (hasn’t been seen in at least nine months) are being reactivated. The patient reactivation percentage is calculated by taking the difference of the number of reactivated patients from the total number of overdue patients, and then dividing by the total number of overdue patients and multiplying by 100, like this:

(Total overdue patients – reactivated patients) x 100 = Patient reactivation %
Total overdue patients

New patient source: This KPI is crucial and just like the number of leads KPI, the foundation for all the KPIs. It is crucial that the source of every new patient is entered correctly. This sometimes takes training staff on the importance of marketing and asking the right questions when a prospect calls.

There is one last KPI that I forgot to add to my last blog. It’s the annual new patient growth. This number is calculated by taking the difference of the number of patients in a given year and the number of patients in a previous year, and dividing by the number of patients in a previous year, then multiplying by 100, like this:

(Number of patients in given year – number of patients in previous year) x 100
Number of patients in previous year

Accurately calculating these KPIs is extremely important when determining whether your marketing is effective — and if done correctly, can prevent wasteful marketing spending.

Sarah Woods is a marketing consultant and president of Core Dental Solutions, a full-service dental marketing agency that provides digital, traditional and inbound marketing to dental practice owners meeting them where they are in their life cycle. They approach dental practice marketing with a “holistic” mindset. Rather than incorporating “set-and-forget” marketing tactics to generate revenue and address shortfalls, they turn a dental practice into a well-oiled machine. Sarah can be reached at Sarah@CoreDentalSolutions.com.

How to Maximize Your Marketing ROI

by Florida Dental AssociationAugust 17, 2017August 17, 2017Leave a comment

By Sarah Woods, Core Dental Solutions

Recently, I was on a dental forum and a dentist posted that he was looking for some help with his marketing. In the thread, a disgruntled dentist stated, “Marketing consultants are the worst, they will promise the moon, but leave you with crap.” I was taken aback by his comment, and was even a little insulted. However, I wasn’t surprised by his point of view — measuring marketing return on investment (ROI) properly hasn’t been clearly defined to many dentists. I’ve been in practices where their only marketing ROI measurements were monthly production or the number of new patients that come into a practice every month. These are the absolute worst ways to measure whether a dentist’s marketing efforts are working. Many factors outside of marketing affect this data. For instance: Was the prospect’s call answered? Did the team member use proper sales techniques to solidify that the patient would be seen in the office? Was the prospect scheduled within 24 to 48 hours?

Understanding the key performance indicators (KPIs) and the life cycle of marketing are both vital to accurately determine how effectively your practice is achieving its marketing goals.

Data from KPIs should be collected monthly and include:

Sales revenue: again, many factors outside of marketing can affect this data
Cost-per-lead: cost of marketing campaign and the production from each lead of the campaign
Traffic-to-lead ratio: how much traffic is going to your website, social media and other marketing tactics, and how many calls from each
Lead-to-customer ratio: how many calls turned into patients
Number of calls (leads): the number of calls generated from marketing efforts
Patient retention percentage: patients deactivated of total active patients
Patient reactivation: how many patients were reactivated
New patient source: this is VERY important and must be tracked accurately!

Understanding how to accurately measure whether your marketing is working will help when creating and adhering to your overall marketing strategy. These numbers will determine which marketing tactics are working and which are just a waste of money!

Sarah Woods is a marketing consultant and president of Core Dental Solutions, a full-service dental marketing agency that provides digital, traditional and inbound marketing to dental practice owners meeting them where they are in their life cycle. They approach dental practice marketing with a “holistic” mindset. Rather than incorporating “set-and-forget” marketing tactics to generate revenue and address shortfalls, they turn a dental practice into a well-oiled machine. Sarah can be reached at Sarah@CoreDentalSolutions.com.