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Issue
1 - January 2004
Get the facts, calculate the return
Marketing your practice for mega success
By Marc H. Sencer, MD
Consider these scenarios of chiropractors
(all names are fictitious):
Dr.
John Allen noticed that business was slowing down even
more than usual for the holiday season. In a panic he
decided to create an aggressive ad campaign in the local
newspaper to turn things around.
The
result: More than $8,000 spent on large ads produced
a total of eight new patients for the months of November
and December. Out of these, four had no health insurance
and soon dropped out of care, and three of the other
four went away for the holidays and did not return. |
Dr. Renee Foster, owner of a busy
suburban family practice, wanted a more effective Yellow
Pages campaign. So, when the Yellow pages rep suggested
letting its creative department design her new ad, it
sounded like just what she needed.
The result: An unprofessional-looking
color that added another $200 a month to her advertising
overhead. The ad looked so unappealing with its jumbled
appearance that Foster actually lost some of her upscale
clientele who saw it. |
Dr.
Fred Chan had a big practice that he wanted to take
to the next level. He knew that some of his friends
and colleagues were having great success with cable
TV spots. But when he found out that the ads would cost
him $9,000 a month he was scared away.
The
result: He passed up a promotion that could have brought
in 9-12 new patients per week, using services of more
than $5,000 — missing a chance to double his already
successful practice. |
The vignettes represent very common problems that occur when
doctors attempt to market their practices without doing their
homework or getting professional advice.
Unfortunately, most doctors take a disorganized
trial and error approach to their marketing with predictable
dismal results.
Remember that marketing and advertising
are subspecialties in business just like neurology and radiology
are subspecialties of chiropractic and medicine. In fact,
professionals in these areas often spend as much time in school
and internships learning their profession as doctors do learning
theirs.
If you fail to learn the basics of marketing
or consult with professionals, the penalties to your practice
may be severe. At the very least your efforts will be ineffective.
At worst you may even do damage to your practice.
Lets look at the above examples:
If Dr. Allen had studied even a basic book
on marketing or consulted an expert he would have discovered
that slow times should get the smallest allocation of marketing
funds. Why? Because no amount of marketing can combat the
market forces that cause those times to be traditionally slow.
Spend the money during the post holiday
“busy” season for your practice to make up for
the holiday slowdown.
In the second example, the mistake made
was to even think about changing or creating a new ad without
knowing the current return on investment. The other mistake
the doctor made was not selecting her own creative people,
ensuring she got exactly what she wanted.
In the last example, the doctor should have
known one of the most important principle of advertising:
It doesn’t matter how much a marketing effort costs.
The only thing that counts is the long-term return on investment
(ROI).
Marketing basics
An organized marketing campaign begins with
a plan and allocates enough money to execute it. Here are
some basic tips to make your marketing efforts produce mega
results:
• Follow the plan. Make a commitment to follow the plan even if it seems as though
it is not working. Most marketing efforts require a great
deal of repetition in order to be effective and the most common
mistake doctors make is giving up before a promotion has a
chance to produce.
ROI is everything
If you want to run a successful promotional campaign,
you must do a thorough analysis of the ROI for every
dollar you spend. That is the only way to accurately
create an advertising budget and properly allocate funds
to your different internal and external marketing efforts.
Here are the steps to figure ROI:
1. Calculate the average gross income
(AGI) per patient. To get a rough estimate, divide the
gross collections for the year by the number of patients
seen during that year.
2. Track results. For each promotion
you do, calculate the number of new patients that your
promotion produced. (This is why it is absolutely essential
that you carefully track the results of every promotion.)
3. Multiply the number of new patients
by the AGI.
4. Divide that answer by the cost
of your ad. The result is your ROI.
Example: Your Yellow Pages cost per year was $10,000.
The ads produced 60 new patients X $6,000 AGI = $360,000/$10,000
cost of promotion. The result — a 36:1 return
on investment. |
• Create a budget. Use realistic figures. If you do not allocate enough funds
towards an effort, it will not succeed.
• Target specific demographics. Your marketing program will consist of two broad types —
internal and external.
Internal marketing refers to those promotions
that are aimed at preexisting patients and their family, friends
and associates. Included in this category are your patient
recall efforts, referral programs, practice brochures, waiting
room resumes and other promotional materials, in-office seminars
and similar items.
External marketing efforts are those aimed at prospects to
your practice who have the potential to become patients.
In order to design an effective campaign,
you need to target a particular demographic within the total
potential patient population and decide which media and content
will best reach that particular group.
External marketing includes Yellow Pages,
newspapers, direct mail, cable TV, e-mail, and the Internet.
External marketing is usually more expensive than internal
marketing and mistakes canbe more costly.
• Differentiate between promotion
and information. Keep in mind the difference between
a promotional piece and an informational piece. Every piece
you produce and every communication from your practice to
the general public or your patients should be a promotion
for your practice. Don’t waste space in the Yellow Pages
with a map or with your practice name as a headline. That’s
information.
Instead, grab readers with the headline
and tell them something about the practice that they want
to know, such as, “convenient evening hours” or
“board certified specialists.” That is promotional.
Similarly, a newsletter that contains articles
from journals and magazines about chiropractic or problems
of the neck and back is informational. But when those articles
are in an “ask your doctor” feature and are followed
by a direct promotion such as a free consultation, that’s
a promotion. Be sure you know the difference before you waste
time and money creating pieces that don’t add dollars
to your practice.
• Track results. Whatever
marketing or advertising effort you initiate, track results.
This could be as simple as asking, “How did you find
our office?” You need to track results to know if you
are spending your marketing dollars wisely. Tracking results
will give you historical data that you can use when making
future decisions. Additionally, it can be used to track trends,
year-to-year comparisons and the overall success of your marketing
campaigns. (See sidebar on page 34.)
Remember, marketing, like chiropractic,
is both an art and a science. Create an organized marketing
program based on sound established principles and you will
reap the rewards. Fail to do so and you may never find out
what kind of growth your practice is really capable of.
Dr. Marc Sencer has established seven
successful multi-discipline practices. He currently owns and
manages a multi-specialty Pain Management Group practice in
Florida, runs MDs for DCs (a medical staffing company) and
works as a personal consultant. He can be contacted by e-mail
at mdsfordc@cs.com.
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