Welcome To This Brand New, Original Series Featuring 3 Dental Marketing Leaders In An Uncensored, No-Holds Barred Discussion That Cuts Through Misinformation & Confusion, Providing The Clarity You Desperately Need For Marketing Your Practice The Right Way, Right Now
In our second installment, we’re going to cover METRICS and MARKETING. Things like:
- Why you NEED a repeatable and trackable system
- The 3 metrics you absolutely should be tracking
- How often you should be looking at your practice numbers (and why you’re bleeding money by doing any less)
- The unbeatable “lifetime value” metric that shows you how to outspend your competition by thousands of dollars and still make a huge profit on every new patient through the door
- Why most doctors are using the “shotgun” approach, and why it’s the WORST approach to marketing ever
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2. Read The Transcription Below (if you prefer to read)
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Learn How To Get A Custom Marketing Plan To Beat Your Town’s Competition By Clicking The Link Below: https://lsfd1.wpenginepowered.com/action-plan
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TRANSCRIPTION:
Graig: Let’s talk a little bit about what you think might help a dental practice become more efficient in the new economy that we have right now because of all of these different statistics and so on.
Chris: When I hear becoming more efficient, I think of being leaner, I think of being more profitable. You can take your existing patient base and trim the fat. You can see where you’re spending too much money with that with a great C.P.A. and with the knowledge of what things should cost to want to practice, where your overhead should be, you can find where you may be spending a little too much money.
With that then we found a profit that you can either take home or leave in the business. I think it’s smart to then reinvest that in your business and say let’s reinvest in some new technology or let’s have a smart marketing plan, an actual budget to devote towards marketing to then attract new patients to your lean mean efficient business.
Graig: I think the underlying theme of what you just said is you have to know your numbers and I would argue that there’s a large portion of the industry that the only time they look at their numbers is when it’s tax time and their accountants says oh you need to write a check for this much and send that to the tax man, and I think to your budget point there should be tracking of everything; what spent, marketing budgets plans.
Don’t do shotgun approach-type things because if you look at the successful practices that have evolve and have done well through this new economy, the one thing that they have in place is that they have a consistent twelve month marketing calendar, both internal and external that they rely on and they know every February we’re running a Valentine’s campaign and so on, and they’re just plugging in playing those things consistently instead of oh I tried this company for three months or I had my office manager run this direct mail campaign for just a month and that’s sort of that shotgun approach where you may get a quick boost but then there’s no repeatable system there and there’s no repeatable action which means cash flow suffers, you have the abs inflows, you feel like you’re taking one step forward two steps back and I think a lot of folks can relate to that because we talk to thousands of us every day and a lot of it is I just can’t seem to get any traction going. I have one month where my new patient numbers are very healthy and very good and then another month where I’m wondering how I’m going to meet the payroll; and so to me that’s a direct reflection of the new economy and having those numbers in order like you said.
So what do you think, maybe let’s give the folks a little bit about what are some of the critical statistics and numbers and math they should be looking at in their business without getting overlooked in the technical? What do you think some of the top five or so might be?
Chris: Form a profit and loss statement. Form an income statement that either your accountant prepares more formally or certainly just you run through quick books and put an armchair one together.
There are some numbers which should be looked at not just every year, even semi-annually is helpful but you also may be missing the mark especially from a marketer perspective or from ordering products and that sort of thing. So quarterly is what I would recommend whether again your C.P.A. does this or you do this yourself.
Some of the big things to look out for cost, the big ones number one without question is the staff, is the team. That will take up between 20% and 30% percent of your overhead. So for every dollar in gross income that your practice collects, 30 cents of that dollar goes to paying your employees or twenty to thirty percent.
A more established practice with long-term employees, you’re going to get closer to that thirty percent. A business that is younger and younger employees haven’t been there for a long time, closer to twenty percent and that includes their entire package.
The other big ones within our lab which could be anywhere from seven to ten percent depending on if you do big cases, you can even go a little bit higher than that.
Rent; this is national averages. I understand renting in New York City is not the same as renting in Nebraska but about five percent is a good target; and then your materials, all of the cotton rolls and composites and all of those things should be between say five and seven percent. These are just rough numbers. Those are the big ones to look at.
Everything else would fall into place and then hopefully the dentist is taking home maybe forty percent would be nice so that means a practice that’s running at sixty percent overhead, they take home forty cents on the dollar, well that’s the dream.
Graig: That’s a great healthy number if you’re there.
Chris: It’s a good target. Certainly a lot of practices fall short of that but that would be something to look for. So then everything else, all of the other miscellaneous expenses fall in between them.
Graig: Yes and I think that’s a great tip on the profit and loss and I think to my Tax Man point, they don’t know if they’ve made any money necessarily until it comes year’s end and then you’re looking at it and you are like Oh really, this didn’t work out too well because I didn’t save the cash flow to pay the taxes that I was supposed to and you end up getting stuck in that rat race of every month.
So if you’re doing a quarterly P & L evaluation, I think that’s healthy. I think if you can have a formal quarterly review from a C.P.A. and then maybe have a quick books one that you’re checking on monthly, so you can see your cash flow and you can see your overhead and your gross collections and things like that, I think doing a little bit of both of those things is very helpful because you’re always taking the temperature of your practice if you’re doing that. You’re never surprised, there’s never a moment where you’re wondering how the next month may be.
I think to dovetail off your point with the numbers thing I think for us specifically what we like to coach our clients on is calculating the lifetime value of a patient and understanding that, that number is just as critical as to knowing your overhead number and making sure that you’re running that P & L properly and you’re getting the correct information because that allows us to understand what are we willing to spend to acquire a new patient, which in my mind that is how you evolve; because the really healthy practices who a lot of times you wonder how are they spending so much on marketing and how are they being so successful doing all of these different things; they’re doing Google Adwords, they’re doing radio, they’re doing direct mail, all these different things.
Well, chances are they understand how to calculate that lifetime patient value and they know say on average they’re worth two thousand dollars, well they know I can go out and I can spend a thousand dollars and still be getting a continual flow there, and I think most of the folks that we consult with we do have to help them work through that number and understand that your competition who is evolving knows all of these numbers and this should be something that you’re constantly checking on because we do want to get that value up as well, so not only should you know it from a marketing standpoint but you should know it because if it’s two thousand dollars this year, we’d like to maybe get it to two thousand five hundred, the following year maybe adding additional services, bigger cases, attracting better quality patients, more fee for service type situations, that puts my marketing ad on there where you can understand that and then you can begin to outspend your competition, which you want to be the person that the other guy or girl can’t figure out what they’re doing. You want to be on the other side of that coin.
Learn How To Get A Custom Marketing Plan To Beat Your Town’s Competition By Clicking The Link Below: https://lsfd1.wpenginepowered.com/action-plan
I want to help you put an action plan together to get your practice moving in the right direction. Do NOT be a stick in the mud, who refuses to change. This year can be that year for change. Let’s do it!
One word of WARNING: This action plan will disappear with out notice! So don’t delay.
Check it out by clicking the link below:
https://lsfd1.wpenginepowered.com/action-plan
Be Bold And Make Things Happen!
Graig Presti, MBA
CEO Local Search For Dentists® A 4X Inc 500/5000 Approved Dental Marketing Agency
PS- Life does get in the way but THIS is the simplest way to keep patients on track, reactivating patients and SPARKING that REFERRAL fire all in one fell swoop with almost ZERO effort what so ever….
Check it out by clicking the link below:
https://lsfd1.wpenginepowered.com/action-plan
One of my private clients (who will remain nameless) is already breaking his competition in half ….buying practices, just killing doctors who won’t change.
So, if you’re struggling with making heads or tails of what to do that can specifically help you grow your practice then this action plan is a “glove fit for you”.
Check it out by clicking the link below:
https://lsfd1.wpenginepowered.com/action-plan
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