A promotional strategy should align with practice goals, which may include business growth and revenue.
Marketing was once easier in veterinary medicine; many practices relied primarily on yellow page ads and perhaps a few other programs such as local advertising or community events. With the advent of the Internet, marketing options have multiplied. Firms have many more options, and most now focus primarily on digital marketing.
More options, and their associated costs, means part of the marketing plan must include tracking the success of each component. For most firms, the primary goal of marketing is to attract new clients. Therefore, the management team needs to know where new customers are coming from, Customer Acquisition Cost (CAC), and which programs are producing the best types of customers. For many owners and managers, it’s not entirely clear how to do this, especially with digital marketing, which can generate a lot of responses (clicks, likes, and shares) but may not attract new customers.
One of the first questions managers often ask themselves is: How much should I spend on marketing? The budget should include digital efforts, such as the firm’s website and social media platforms, as well as more traditional non-digital ads, community activities, or sponsorship of local groups. The answer, of course, is “the amount needed to achieve the goals set by the firm in its business plan or through strategic planning.”
These goals are often related to the number of new customers desired, but they can also include sales and growth goals and the desired level of profitability. While the above answer is true, it does not provide specific advice to help firms make decisions about their marketing spending.
It’s impossible to talk about business topics these days without talking about the COVID-19 pandemic. A lot of practices are overwhelmed right now, and the idea of trying to get more customers is horrible for them. If your firm is one of the too busy ones, marketing programs aimed at attracting more clients may be a less critical area to focus on at this time. However, the increased growth provided by the pandemic will not last forever, and practices will again have to focus on marketing new customers in the future. Another marketing objective often relates to customer loyalty, which remains as important as ever.
Let’s start by determining how much of their budget practices go into marketing as a percentage of gross revenue: 0.5% to 1.0%.1.2
These figures generally relate to mature and stable firms; start-up practices or those that focus on significant growth are likely to spend more. The percentages above only include the direct costs of external marketing services. If practice team members spend time maintaining Facebook posts or performing other promotional tasks, these costs would be included in staff compensation. More importantly, just because it’s the amount firms spend on marketing activities doesn’t mean it’s the law amount or money is spent on law Activities. However, if your expenses are significantly different from most practices, at a minimum, this is a sign that it’s time to study your expenses and see if they make sense. Recommendations in articles or made during continuing education programs are often much higher, but, again, may not be suitable for your practice. No single spending level is right for everyone.
The next step is to ask your new customers how they found you. The focus should be on what worked to get them in, not just what worked to spark their interest digitally. Asking customers how they heard about you should be a question on your new customer worksheet, followed by a list of your marketing initiatives to help customers answer correctly. This list should include all of your formal marketing programs (Facebook ads, Google search results, newsletter, etc.) If customers don’t fill out this form when filling out the new customer worksheet, the front desk team should be trained to request the information. Remember, it’s the job of the management team to make sure front desk staff have time to do this with each guest. The data must then be collected and reviewed regularly. The data may not be perfect. For example, clients may have driven by, viewed the firm online, and then received a referral from a co-worker before making the decision to come to your firm. However, it does give you a good idea of what works and what doesn’t.
There is also a lot of data that can be collected from your digital efforts, such as the number of people:
- clicked on a button
- followed a link
- shared something
- liked something
The downside to analyzing digital data, however, is that just because hundreds of people have viewed your Facebook page, doesn’t mean they plan to visit the firm. What if 99% of those page visitors lived 1,000 miles away? Analyzing the significance of this data can be very difficult. Make sure your marketing service provider can help you collect the right data and knows how to interpret it. How many actually became customers?
Ideally, you would also like to compare the cost of acquisition between different programs, whether you are using a digital campaign or a more traditional marketing program. For example, let’s say you attended a pet fair and handed out flyers offering a free review to new customers. There was no rental cost for the booth and you already had the things you brought to decorate it. Printing the flyers was $ 100 and you incurred $ 200 in staff compensation costs for the team members who ran the booth that day. Over the next 2 months, 14 new clients visited the practice, received their free exam, and spent $ 25 to $ 150 each.
What was the cost of customer acquisition?
Total marketing program cost = $ 100 + $ 200 = $ 21.43 per customer
Total number of new customers: 14
We do not include the lost cost of the exam in this calculation because the firm does not actually pay any money for these exams; it just doesn’t bring in exam income. The only exception to this might be if you have doctors who are paid on production and give them a certain amount when they see these free exams. Some practices do it and others don’t. If you do, you can include that cost in the calculation.
Is this a reasonable CAC? We do not have good benchmarks for CACs in veterinary medicine. The numbers quoted in trade articles from other industries are ubiquitous and do not really apply to our field. The best way to make this determination is to compare the CAC of the various marketing activities in your practice, taking into account the number of clients generated by the program and the client’s estimated lifetime value. You can have a program where the CAC is $ 5 per client, but if you only get 2 clients per year, is it worth your time and effort compared to another program where the CAC is $ 50? per customer but generates 150 customers?
Determining whether the practice is spending the right amount of money on the right activities has both subjective and objective components, and while the analysis is not perfect, it will give you the information you need to make better decisions. marketing. Keep in mind that it is generally more beneficial to retain customers than to recruit new ones. Therefore, if your practice is not doing a good job, focus on the reason and the resolution of these problems first.
Karen E. Felsted, DVM, MS, CPA, CVPM, CVA, is the founder and president of PantheraT, a veterinary management consulting firm.
- Well-Managed Practices 2019 Benchmark Study. WTA Consultants. August 16, 2019. Accessed November 14, 2021. https://wellmp.com/2019-well-managed-practice-benchmarks-study-wmpb-provides-insights-to-the-top-veterinary-practices-in-the-country/
- Financial and Productivity Pulsepoints, Tenth Edition. American Association of Veterinary Hospitals. 2019. Accessed November 14, 2021. https://ams.aaha.org/eweb/DynamicPage.aspx?site=store&Action=Add&ObjectKeyFrom=1A83491A-9853-4C87-86A4-F7D95601C2E2&WebCode=ProdDetailAdd&DoNotSave=yes&ParentObject=CentralizedOrder-Entry=voientData&ParentData20b272 a0da41270555 & ivd_cst_key ivd_cst_ship_key = & = & = ivd_prc_prd_key dcd2a161-F778 -498b-a097-3d107e993fe2