METRIC 1
YOUR PATIENT ACQUISITION COST
Many practice owners want to grow their practice, but significantly underestimate the investment necessary to attract the volume of new patients they need to achieve their goals. Unfortunately your marketing budget may be crushing your growth potential. That’s because if you set your new patient goals then separately set your marketing budget without one understanding the other, you’re at high risk for failure. Instead, you can use basic math to calculate exactly what your budget needs to be to achieve your targets by knowing your Customer Acquisition Cost (CAC). It’s important to know what the value of each new patient is to you first. Then, the goal is to have a low CAC that works with your profit margin. Many clinic owners are hesitant to spend money on marketing due to prior bad experiences. But lowering your CAC doesn’t mean spending less on marketing. In fact, the opposite is usually the case. Investing in more marketing that works increases new patient numbers which makes the cost per patient lower.
HERE’S HOW TO CALCULATE YOUR CAC:
Number of Patients Acquired ) ( ( Total Marketing & Sales Costs )
PATIENT ACQUISITION COST
=
to CONTROL YOUR NEW PATIENT VOLUME 4 METRICS
(Example: $3,500 ÷ 25 Patients = $140 per New Patient)
CALCULATE YOUR CAC:
=
PATIENT ACQUISITION COST
NOW ASK YOURSELF:
Even if you have no intention of stepping away from the day-to-day of your clinic, taking extended vacations, or selling your practice in the near future... Being confident that your clinic could run without you pushing it is the level of freedom and stability every practice owner needs. It reduces stress, increases your clinic’s value, allows you to focus on the big picture, and ensures that your clinic works for you instead of you working for your clinic.
First, you have to have control of your new patient volume. Control means no guesswork. You know where new patients come from and you can lean into those areas when you need to increase volume like turning up a dial. Specifically, there are 4 key metrics you need to know and monitor regularly to have control of new patient volume. In the following pages, I’ll walk you through each of those metrics and exactly how to calculate them.
Is my CAC healthy? A typical cost to acquire a patient should be 5-10% of your average reimbursement.
• If your CAC is too high: If your cost is too high but your sales and marketing budget is between 5-8% of your total revenue, you likely are NOT spending too much but rather spending on the WRONG things that aren’t working. • If your CAC is right but new patients are too low: You may actually be underspending on marketing. Invest more in what’s working or into new areas that are working for other clinics like yours. Are my budget and my goals aligned? If your CAC for the last 6-12 months is $100 and your new patient target is 30 per month, you now know you need to spend at least $3,000/month to reach your target. If you answered yes to the first question, you can do this confidently.
So, how do you accomplish that?
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4 METRICS TO GAIN CONTROL OF YOUR NEW PATIENT VOLUME PracticePromotions.net | 804-406-9050
4 METRICS TO GAIN CONTROL OF YOUR NEW PATIENT VOLUME
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