The Misconception of ROI
Hey. Liza here from Content Maximiser. Here I am in beautiful Byron Bay.
I was chatting with a new client who is a dental practice owner here in Byron, actually. And we were talking about the topic of ROI – return on investment. And he said to me, “Lisa, I’ve got a business coach. And my business coach said to me how I calculate my return on investment for marketing is simply how much I spend on marketing, how many new patients I got, how much did these new patients spend in that month, and then that’s how I calculate my return on investment. And it seems like it’s actually really low. Am I doing it correctly?”
And I said to him, “Well, that’s one way of calculating it, but that’s actually a misconception. Because the one thing that is missing in this equation is time.”
So, why is time important?
Well, let’s think about it. Let’s not think about marketing. Let’s just think about common sense, and how people normally behave in a purchasing position. If they’re going to do a big procedure that is a significant investment, of course, they’re going to take more time. Because what they need is one key ingredient, and that’s trust. And to have trust, you need time.
They need trust in your ability to be able to do the procedure, they need trust that you have the knowledge and the expertise, and they need to trust that you are going to be the one that can actually help them solve the problem and create the outcome that they want.
What they also need is the time to decide that they actually want to go ahead with making a purchase. There are times when you stop to think about something, but it’s just kind of simmering at the back of your mind, but you haven’t actually decided to go ahead with it. And then you get to a point where you go, “Yeah, actually I do want to go ahead.”
All of that takes time, right? If you actually just started marketing and people start seeing you around, they don’t know you. They don’t know who you are. They don’t know whether they want the procedure. So, people are at a different stage of their buying cycle, and it takes time to build that trust so that they will actually go ahead and decide to do something.
But what happened with this new patient?
He said he or she over a 12 months period come in for a couple more checkup and clean. They get to know you. They get to know the practice. You start building a relationship. You start building trust. And then we’ll get to a point where they go, “You know what? I’m now ready to have an Invisalign treatment,” or, “I’m now ready to have that veneer procedure with you.” All of a sudden 12 months down the track, you now got a $10,000, $15,000 treatment. But this person is no longer a new patient and is an existing patient.
So, how are you going to calculate a return on investment for this patient who just spent $15,000 with you if you follow the previous calculation methodology?
Don’t make the mistake of calculating ROI without factoring in time.
And what you will notice is that the longer that you put in the time factor… say, 12 months, 24 months, 36 months, what you will notice is that your return on investment in marketing will go up if you factor longer period of time, and your cost of acquisition will come down.
In summary, when you calculate your return on investment with marketing, make sure you also are factoring in time. Because that will give you a more accurate picture of your return on investment on your marketing.
I hope you found this useful. And if you’ve got any questions, feel free to contact us by clicking the button below, DM us on social media, or fill in the enquiry form on our website. And we’ll always love to help you with your dental marketing. Cheers!
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