Nine Marketing ROI Stats That Might Surprise You

Is your marketing working?

In other words, is it generating business in a profitable way?

If your answer is “no” or “I don’t know,” then read on to find out why it’s important to have a clear understanding of your marketing return on investment (ROI) and its impact on your business.

First, let’s define marketing ROI: It’s the practice of attributing profit and revenue growth to the impact of your marketing initiatives. Simply put, if you spend money on marketing, it measures your return.

Now, let’s discuss why your marketing ROI matters. Here are the top three reasons it’s a critical element of your overall business strategy:

  1. You can identify any “red flags” or missteps in your current marketing strategy so that you can make the necessary adjustments to drive greater results. For example, if your call response rate for your marketing initiative is below the industry benchmark, you might need to reevaluate your target audience.
  2. You can make informed decisions about allocating your marketing budget and creating your marketing plan for the coming year. If you don’t know what works and what doesn’t, then you’re essentially gambling with your investment.
  3. You can analyze your ROI data and know for certain if and how much your marketing efforts are contributing to revenue growth.

Now that you understand why marketing ROI is important, we can dive into the fun part—the data!

We reviewed a year and half of data from a select group of practices and below are some insights and benchmarks we uncovered. Some stats might surprise you or, more importantly, motivate you to take a closer look at your own marketing strategy and reevaluate your plan for 2020:
  1. Direct mail still works— in 2018 and 2019, our practices sent out 525 direct mail campaigns, yielding an average of $1,320 in profit per campaign. Find out if your own direct mail campaigns are successful with our Direct Mail Calculator.
  2. Thinking about advertising in your local magazine? You might want to give that a second thought! With a high cost-per-campaign and a negative return, magazine advertising serves more as a brand awareness tool than a true opportunity driver.
  3. Patients routinely check your digital properties before picking up the phone. 421 digital campaigns resulted in 2,935 calls with a total profit of $1,058 per campaign—a whopping 502 percent return!
  4. Over half (55 percent) of our Associates’ referrals come from physicians. This is encouraging because patients that come from a trusted opportunity source are more ready to buy. So, keep working to establish relationships with physicians in your area!
  5. Five thousand direct mail pieces resulted in 15 calls and 6 appointments with an average response rate of 31 percent. Although this appears low, the industry benchmark for response rates is 0.25-0.50 percent.
  6. Wouldn’t you like to make two months’ revenue in just three days? It’s possible with the Consult Upgrade Program! A total of 32 upgrade events averaged $58,000 in total revenue.
  7. Did you know that 40 percent of co-op dollars available are currently going unused? Every co-op dollar spent results in $5.39 in revenue for our Associates. If you’re not taking advantage of your co-op dollars, let our marketing team help you use them strategically.
  8. Calling Out of Warranty (OOW) patients generated an additional $215,000 in profits for our Associates while calling Tested Not Sold (TNS) patients yielded an extra $86,000 in profits. So, pick up the phone! Or, better yet, let Your Patient Contact Center do it for you.
  9. Due to blank categories in our Associates’ practice management systems, there was nearly $1.7 million in revenue unaccounted for. Meaning, many practices don’t know where all of their revenue is coming from each month. Don’t be one of those practices — let our marketing team help you establish an organized process for labeling opportunity sources in your practice management software.

*Based on the Marketing ROI data from a select group of practices between Jan. 2018 – June 2019

Consult YHN’s Quarterly Marketing ROI Reports offer invaluable insights that ensure every marketing dollar spent today is growing your practice for the future. If you don’t already receive a report, talk to your Account Manager to find out how you can!

About the Author

Laura Kegelman joined Consult YHN in 2018 and currently serves as a Strategic Planning Analyst. Her diverse professional background includes supply chain, forecasting, and marketing. Laura holds a degree in marketing from West Chester University in Pennsylvania. When she’s not working, Laura loves exploring the city she lives in (Philadelphia) as well as traveling to new cities and countries.

How Healthy Is Your Practice? Let’s Do the Math!

Every year at your annual check-up, your doctor probably recommends routine lab work to ensure you’re in good health. Just like your doctor, you should be routinely checking your financials to monitor the health of your practice.

If your lab work comes back and reveals you have a high white blood count, low hemoglobin, or high cholesterol, you probably know that this is bad news and that you’re going to have to make some adjustments to your lifestyle.

But what should you be looking for in your financial data?

Overall, your financials will obviously tell you a lot about your practice, however, analyzing even just a handful of numbers and doing some simple math will provide plenty of insights. Key Performance Indicators (KPIs) are the specific measures we use to determine the health of a practice. We then compare your practice KPIs to the “benchmarks” or “industry averages” to identify any successes, concerns, or areas for improvement.

I know math can be scary for some people. Not everyone is a numbers nerd like me. However, math is the language of business and I’m going to help simplify it for you. Here are a few of the most important numbers you want to identify and understand what they mean:

Income/Sales – The amount made on selling products or services

Cost of Goods (COGS) – The amount it costs the practice for the items sold or services rendered

Operating Expenses – All costs associated with running the practice

Now we’re ready to calculate some KPIs:

Income COGS = Gross Revenue ($)

Income ÷ Gross Revenue = Gross Profit Margin (%)

COGS ÷ Gross Revenue = COGS Margin (%)

Gross Revenue Operating Expenses = Net Income ($)

Net Income ÷ Gross Revenue = Net Profit Margin (%)

 

NERD ALERT!
Operating Expenses can be further broken down to show the percentage spent on specific items like payroll, marketing, or rent. Talk to your Account Manager about getting a Monthly Financial Analysis for this level of detail.

Time to compare your answers to industry benchmarks! We find the most successful and profitable practices have KPIs in these healthy ranges:

Gross Profit Margin = 60-65%
COGS Margin = 35-40%
Net Profit Margin = 10%-15%

Remember to check your work: Gross Profit Margin % + COGS Margin % = 100%!

Now that the math is done and you’ve compared the numbers, it’s time to read the results. Obviously, the benchmark ranges are the sweet spot, but let’s define what it means to be outside those ranges.

Above Average is GOOD when its…
Gross Profit Margin – You are more profitable than the industry average
Net Profit Margin – After expenses are paid, your practice has a healthy bottom line
Below Average is GOOD when its…
COGS Margin – Your prices are set well; you realize a healthy profit on each sale

 

NERD ALERT!
Gross Profit Margin and COGS Margin have an inverse relationship. If you find that ether is outside the ranges described above, a Pricing Analysis from Consult YHN can identify areas where small adjustments could be beneficial.

Congratulations, you just analyzed your financials!

This is a great start in understanding what your numbers are telling you and identifying potential areas for improvement. By continuing to regularly track and analyze metrics such as Opportunity Creation, Unit Sales, Third Party Attendance, and Closure Rates, you can make the necessary adjustments to help more patients and increase revenue.

For a deeper dive into your practice’s finances, talk to your Account Manager about taking advantage of Consult Tracking. Our business analysts are industry pros when it comes to providing actionable business intelligence—from breakeven and territory analyses to compensation plans and monthly tracking reports. Consult YHN also has several tools that can help you track your finances, including Wake Up Call and the Pro Forma tool, which you can access anytime via Navigator.

Start evaluating the financial health of your practice today!

About the Author

Kimberly Costanzo joined Consult YHN in 2017 and currently serves as a Business Analyst. Her diverse professional background includes revenue accounting, internal audit, system support, and project management. She holds an MBA from Stockton University in New Jersey. When not working, Kimberly enjoys spending time with her husband Chris and her daughter, Gianna, either at the local playground or playing competitive matches of Go Fish. She also serves on her daughter’s school board and volunteers in the community to promote emergency awareness.

Three Reasons Why You Should Mine Your Data

You’ve been practicing for years and everyone in town knows who you are, but you’re not increasing the number of patients you help each year. If this describes your practice, you’re not alone! In fact, this is a common concern we hear from our Associates—they’re working hard, feel busy, and yet, the number of patients helped, and revenue generated is not increasing.

So, what can you do to reach more quality people? If you’re thinking the answer is “marketing,” you’re correct. However, it’s important not to get so focused on marketing to new patients that you forget – you’re already sitting on a patient gold mine: your database!

Whether it’s through a sophisticated practice management system or less sophisticated paper folders in a metal cabinet, you’re already keeping great records of your patients and tracking everything. Obviously, organization is key. But what you do with the data makes all the difference, especially with patient touchpoints.

We call this data mining and here are three reasons you should mine your data regularly:

#1. Stay Connected with Your Patients

If you’ve been on an airplane lately, then you’ve probably heard the flight attendant say something along the lines of: “We know you have many options for your air travel needs.” This is a very true statement and it’s not limited to the airline business—it applies to every business, even yours. Touching base with your patients regularly (at least twice a year) gives you a chance to show you’re thinking about their well-being and thank them for choosing you as their trusted hearing healthcare provider. This will also remind patients of the wonderful experience they had with you, making them less likely to go to one of your competitors.

#2. Help More Patients

Based on Consult YHN’s studies, 60 percent of patients with hearing loss will not purchase hearing aids during their first visit. That means, if you’re seeing 300 patients a year, 180 are leaving your office without accepting help. When you reach out to those patients, you can restate the impact hearing loss has on their overall health and remind them how you can help (yearly check-ups and cleanings, hearing aid troubleshooting, upgraded technology, etc.). This will fill your schedule with quality opportunities.

For example: If you’re a five-year-old practice seeing 25 patients per month, then you are helping 10 patients while 15 patients leave untreated. At this point, you could have about 900 patients that were tested but didn’t accept help as well as a database of about 600 patients whose technology is out of warranty. Over the next 3-4 years, you want to stay connected with those patients so that when new and improved technology is released, you can fit them with an even better device.

Our tracked data shows that for every 38 letters sent to patients for either new or upgraded technology, one appointment is scheduled. For every appointment scheduled, we see one hearing aid sold. From a business standpoint, think about what that can do for your revenue: if you reach out to 300 patients a year, you could possibly sell eight hearing aids for an additional $16,000 in revenue (assuming an Average Selling Price of $2,100 per device). The Consult Upgrade program is by far one of the most effective ways to reach your patients, with the average event yielding more than $51,000 in revenue.

#3. Minimal Effort and Costs

You’re already spending the right amount on your annual marketing, so what’s the cost associated with sending letters to patients? Minimal at best, especially compared to the average cost of a new patient: $760.

You can find several customizable database letters on Consult’s MarketSource that are proven to drive appointments. All you need to do is export well-constructed lists from your database and perform a simple mail merge to personalize the letters for each patient. Or, you can let Consult YHN’s marketing professionals handle all of this for you. From designing to mailing to reporting, we can execute a 12-month strategy for you so that you and your staff can focus on other important responsibilities, like follow-up calls, scheduling appointments, and more.

Starting mining for gold today! Reach out to your Account Manager to learn how Consult YHN can help you implement a database mailer strategy that drives results.  

About the Author

Kimberly Costanzo joined Consult YHN in 2017 and currently serves as a Business Analyst. Her diverse professional background includes revenue accounting, internal audit, system support, and project management. She holds an MBA from Stockton University in New Jersey. When not working, Kimberly enjoys spending time with her husband Chris and her daughter, Gianna, either at the local playground or playing competitive matches of Go Fish. She also serves on her daughter’s school board and volunteers in the community to promote emergency awareness.

Master the data, better serve your customers!

Marketing has changed. Since 2000, essentially all businesses prepared for these changes with toll-free numbers and considered themselves ready for inbound marketing. Inbound marketing is waiting for consumers to call — or text, or visit, or click through to — your business.

Use of the word waiting doesn’t do the concept justice, however. Inbound marketing is not passive, it’s active waiting, or, more correctly, encouraging consumers to contact you. Inbound isn’t a battle for prospects’ attention. It’s not a hard or aggressive sale as much as it is a strategy for presenting your business. Through content on your website, social media, blogs, etc., you encourage consumers who find your products and services relevant to their needs to reach out to you.

Inbound is often applied to the customer journey — from being total strangers to having an awareness of your business, then moving through stages of familiarity and consideration of your offerings, and finally into the decision or conversion phase, where they choose to become customers. A smart business presents content in appropriate channels that suits the interests of prospects throughout this journey. Each portion of your content collection should relate to the buyer’s unique position in the journey and then advance him/her toward conversion.

The trick is knowing if and how the content and the channels are actually moving the customer along in his/her journey. That’s done with data. Even though we’ve moved into instant, digital everything, some significant parts of a buyer’s journey still happen offline, and offline actions must also be tracked and measured.

Offline data gaps can occur due to material differences among marketing channels. Facebook is a terrific place to build awareness and create a community, but social platforms are not where consumers typically go to make purchases or gain deep knowledge of your products/services.

At the other end of the journey, phone calls are rarely first touches. A customer who phones your business may want information that they couldn’t find on your website — and there’s a good chance the customer is ready, or is almost ready, to buy. If you’re not measuring phone calls, you’re likely missing substantial data. The technology of call intelligence platforms makes taking inbound calls while collecting data, recording, transcribing (and more) a simple proposition. Most tracking platforms integrate call data with CRM, practice management software, and other marketing platforms, giving business owners a more complete picture of their potential customers.

Why is call tracking important? It’s a digital world, but calls are far from dead. Even though the integration of the web and smartphones into everyday life has changed our world substantively, phone calls are still alive and well in the marketing process. Capturing, tracking and acting on the intelligence of your phone calls is no longer a luxury, it’s a necessity.

In fact, the continuing evolution of phone technology has created an environment where mobile searches can result in immediate calls and conversions — all from the same device. Measuring which search queries, ads and content make those calls happen, therefore, will be key to building and refining a winning overall strategy.

About the Author

Jerry DeRosa is Consult YHN’s Vice President, Marketing. He draws from more than 25 years of marketing experience with expertise in direct and retail marketing, advertising and digital media. Previously, Jerry was Director of Marketing Communications for Wolters Kluwer Health, a medical information, data and publishing company.

Plan to Measure & Measure the Plan

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As 2014 is coming to a close (we can tell by the plethora of holiday décor in every retail store), we want you to seriously consider your marketing strategy for 2015.  If you don’t already have your plan in place – and some do – you may not be sure where to begin.  Our number one recommendation is to look backward before looking forward, meaning assess your marketing efforts from 2014 and how each one contributed to the bottom line before embarking on a plan for the next 12-months.

Two Consult YHN colleagues recently co-authored an article in Hearing Review that sums up this idea perfectly: Know Your Marketing; Know Your ROI.  By having a defined marketing plan and tracking its efficacy (plus course correcting along the way), you’ll be able to capture beneficial trends from your data and eliminate wasteful spending.

But first, you have to actually develop the plan.  After allocating 10-12% of your overall budget towards marketing, we recommend:

  • Using a targeted multi-media approach with frequency and consistency (including direct mail, print and digital media)
  • Ensuring you are communicating with both your current customers and prospects via mail, telemarketing, etc.
  • Creating messaging that resonates with your target audiences; i.e. speak to individuals about what matters to them via their preferred communication channels – email, print, text, etc.

Once your plan is up and running, track the results.  As recommended in Know Your Marketing; Know Your ROI, many computer programs are available to facilitate and simplify tracking (Consult YHN has one), but typically a person(s) in your office must physically input the response data.  It’s important to consistently gather this data because you will use it to calculate your return on investment, or ROI.

Once you gather the data, then what?  Consult YHN recommends a quarterly assessment of all marketing initiatives to analyze trends, assess the performance of the plan, and ensure marketing dollars are being spent wisely.  Some key metrics to pay attention to: number of calls (how many times did the phone ring from each initiative), number of appointments set and number of hearing devices sold.  The aggregate of these metrics will contribute to your ROI calculation.  To discover how to properly calculate ROI, click here.

Remember, marketing 101 tells us that developing a plan and working that plan frequently and consistently yields success; couple that with tracking your results, calculating ROI and analyzing those results in order to tweak your plan will put you on a successful marketing trajectory.

 

For questions or a free 30 minute marketing consultation, contact marketing at marketing@ConsultYHN.com.