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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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