How much is a patient worth to you?
How much is a patient worth to you?
This is a difficult and somewhat uncomfortable question to consider when thinking about your practice. The obvious answer is that collectively, your patients are priceless to your practice. However when looking into the business side of optometry, practices need to make money to survive – just to cover costs. You will need to make even more if you are serious about growing your practice over the long-term enabling you to deliver even greater products and services. Since your patients are the ones that pay for your services and products, you are able to work out an average dollar per patient earned.
Why is this of any concern? Patient profiles are an important part of practice marketing. Identifying common groups that purchase in the same way allow you to refine and enhance your services to really add value to your patients experience, while paying attention to your bottom line. You may find that there is a segment of patients that go for premium frames and lenses, another segment that purchase prescription sunglasses regularly, and another segment that are more interested in value options. All of these factors will determine your overall revenue per patient, and for marketing purposes it is critical to address each group according to their needs.
The Valuable Element of Time
Optometry is a beautifully cyclical profession. Patients generally have an on-going need for eyecare expertise throughout their lives, with the added benefit that there is some fashion and function involved in the latest eyewear trends. We employ the Patient Lifetime Value approach for our clients which helps build more effective marketing plans, and gives a better indication of budget needs and ROI.
What’s your budget?
We are sure that you have heard this many times when speaking to contractors of any kind, be it website design, creative agencies, or anything else that involves bespoke customization. It’s human nature to want to spend the bare minimum which is why practices should shop around… just like your patients do!
Budgets are normally based on the amount of investment that will give you the result you need. There are rule-of-thumb benchmarks such as allocating 5-10% of your total revenue to marketing activities, depending on whether you need to maintain or grow your size.
ROI – Say goodbye to marketing angst
The framework we recommend is to build your budget based on a simple ROI – Return on Investment. How much revenue do you need to make over a certain timeframe versus how much it will cost you. That’s it.
The reality is that most traditional marketing activities have had no way to measure their impact which is why many practice owners have kept marketing activities to a bare minimum, having tried something without results, then going into a holding pattern before being frustrated again in the future.
Digital marketing is very different. We employ advertising attribution methods to know when a patient phones your practices in response to an ad they saw on Google or Facebook. If they book an appointment, we count this in the ROI calculation. All of our marketing activities are geared for positive ROI, so you can be assured that every program is a step forward for your practice.
Spend where you can measure the results
Start with a list of things you think need to be done: Patient newsletters, VIP events, Sunwear promotion, New Product Launch, Health Fund Campaign, etc, etc…. For each one of these, we recommend to put a dollar amount to each one as a positive contributor to your practice growth, then consider the offsetting costs.
Patient recall letters done in-house by your team costs money, let’s say $5 per letter for all the manual work involved. However, it’s a relatively small amount considering that the patient is very likely to return for their next eye exam.
Be careful shifting your focus to lowering your costs as this may affect the outcome in ways you hadn’t anticipated. We focus exclusively on this area, and look carefully at marketing effectiveness and all the variables. If there is any doubt, get in touch.
Go from Marketing Potential to Marketing Plans
We know that Optometrists and practice managers are very busy with patients on a daily basis. In our experience, eyecare professionals have a long list of good ideas, but just lack the time, and tools to get things done. Marketing plans don’t have to be a scary thing that you have to keep putting off. With the right help, it is an exciting area that you can look forward to as you see the results take shape. Start by identifying the opportunities you see within your practice, pick your best 3, then give us a call to discuss the next steps!