Do You Measure Return on Investments?

A couple of recent marketing surveys bring to mind a crucial missing piece in the marketing plans of many dental specialists. The first survey, conducted by Sagefrog Marketing Group, found that 68% of business-to-business (B2B) companies allocate 5% or less of their revenue to marketing. We don’t necessarily think it is wise to spend so little on marketing, especially in a struggling economy, but it’s not surprising when budgets are tight. What is surprising is a survey by the Lenskold Group that found 33% of B2B companies did not track return on investment in the past year. One would think that in the midst of a lagging economy, every dollar would be tracked.

While dental specialty practices are not B2Bs, these surveys caught our attention because, having worked with dental specialists for two decades now, we see a universal lesson to be learned here. Too many dental specialty practices do not have a system in place to measure their returns on investment. At WPI Communications, we help endodontists, periodontists, prosthodontists, orthodontists, oral surgeons and pediatric dentists market their practice with quarterly print and electronic newsletters that they send to their referral sources—other dentists, pediatricians, etc. It’s the type of investment that can often be paid for with just one or two new patients a year.

But many practices do not record whether this investment, or any investment, makes a difference. Regardless of whether you invest in sending newsletters, developing a new Web site or delivering gifts to local health care providers, it is important to measure return on investment. Tracking referrals is essential to know which marketing efforts are successful and where to spend precious time and money in the future.

Most dental specialists know how each new patient has found their practice, but they do not record that information in one place. A system to track referrals can be as simple as a pen and paper, as sophisticated as specialized marketing software or somewhere in between, such as an Excel spreadsheet.

Reviewing several months of documentation should generate some important questions about the future of your marketing plan:

• Do the bulk of referrals come from just a few sources? Consider how you built those relationships in the first place and how you might build similar relationships with additional health care providers.
• Has an individual who once sent a steady stream of patients suddenly stopped doing so? A phone call to that referring individual may help straighten out the matter and restore the stream of referrals.
• What kinds of health care providers refer patients to your office? An oral surgeon might want to know if referrals are coming from dentists or family practice physicians. Similarly, a pediatric dentist would want to know whether referrals come primarily from dentists or pediatricians.

 Of course, in tough economic times, the most important question you should ask yourself is this: Have your practice-development investments paid off? If you have invested time or money in public speaking, newsletter publishing or building an informative Web site, you want to know if they make a difference. Often just one new referral will more than pay for any single investment.

Think back to the surveys we started with. Are you investing in marketing to grow your practice? (If you want to know more about marketing in tough economic times, download a free copy of our special report, “Marketing Your Health Care Practice in an Economic Downturn”). And if you are making that investment, do you track whether it has been successful? Don’t be like the 33% of B2Bs who do not. These days, every dollar counts. And some dollars spent today could grow your practice for years to come.