Dental Market Research

market researchOne word. Data. You can not have a good Dental marketing strategy without good solid data. Data is the single most important aspect of marketing, and since the digital revolution well over a decade ago, is readily available to us once we know where to look for it. Why anyone would possibly comprehend creating a marketing strategy and plan without data to back it up baffles us and yet still occurs in 2018.

Armed with good research and data, you are able to make better decisions as to where to invest your money as well as significantly increasing the likelihood of generating good Return on Investment (ROI) from it. Quite often we encounter clients who will come to us and make a statement regarding the direction and medium of marketing they want to use. For example I want to use Social Media to push Invisalign out into a 30km radius around me or I want to be found as a leading Prosthodontist in my region. Before running off and executing such a campaign we need to know how many people are actually actively search for a Prosthodontist in this region, what are the monthly average figure for such search? Without this data, from our experience, you have a good chance of kissing that marketing budget goodbye.

In order to gather the required data we have numerous tools at our disposal such as Google Analytics, third party keyword research tools, Facebook analytics and third party websites like Semrush, MOZ etc.

You can find detailed guidelines on how to use the respective tools to dig through the mountains of data or ensure you find a good marketing agency which is data centric (shameless mention for Grow Marketing here) and understand who to target, where to start, what channels to utilise, how to word your messaging etc.

We can’t answer the first two of those three points, that is up to you to come up with these figures. But we can show you how to calculate the LTV (Life Time Value) a dental patient has to a clinic. This creates the foundation of our marketing strategy as once we understand things figure, we can use it to figure out which products to implement and which not to implement.

Life time value is the average revenue a clinic stands to gain over the lifetime a patient will visit the clinic. Now much of a general dental clinics work will be a check up and clean and depending on the area, size, customer demographic etc of your clinic/s this figure will be anywhere from $160 – $300. Of course there will be clinics that charge higher and lower than this amount but it gives us some average value to work on.

Next we know that some patients may be worth several thousand dollars ie root canal and crown. So we need to find an average value per visit and considering that you will have more check ups and cleans than root canals lets be conservative and say the Average Patient Value (APV) is $400 to you per visit. This number may go up or down depending on your clinic so it is essential that you re-calculate what that number may be for you.

We know that the average patient will re-visit (with a good recall system in place) every 6 months or 2 Purchases Per Year (PPY), so that means you will make $800 per annum from an average patient. Some patients will leave the area after just one years whilst others will remain in the area coming to your clinic for many years to come, however for the sake of being conservative let us assume that an average patient will come back to your dental clinic for a period of 3 years, this is our Life Time (LT).

We can now calculate our LTV.

LTV

= APV x PPY x LT

= 400 x 2 x 3

= $2,400

This is discounting the value of referrals, that means for a percentage of new bookings created by your marketing campaign, those patients will refer you to other friends and families so quite often this number is significantly higher, however we try to be as conservative as possible so we know that we are working with worst case scenario numbers.

If our marketing campaign can yield 40 new bookings per month we know that the value to the clinic in LTV;

= $2,400 x 40

= $96,000 per month of marketing activity

We can also look at this figure without considering LTV and only considering immediate value. In this case we take APV and multiply it by the number of bookings we are seeing coming in that we can attribute to our marketing channels. So if we are seeing 40 new bookings per month;

= $400 x 40

= $16,000

We now have a standard to measure the success of our campaigns against as well as giving us an idea on how much we can afford to spend. So how much should you spend? That again depends on your own budget but to give you an idea, small clinics will spend $1000-$2000 per month with 1-2 chair, clinics with 2+ chairs that are looking to grow will spend $2000+ per month with some larger clinics with 4+ chairs spending $5000+ per month across their channels of online marketing. Read More