Partner, Chief Strategy Officer at RUNNER Agency.
One of the most important things you can do when marketing a medical practice is to set basic expectations for how your marketing investment will perform. You can do this by understanding a few foundational KPIs and some performance benchmarks. This is particularly important if you’re investing in digital advertising.
Running a marketing agency that focuses on healthcare, I’ve learned that many medical practices have false expectations about paid advertising performance as well as the role that the front office and physicians have in turning marketing spend into revenue.
In this article, I’ll outline marketing performance based on real data from one of our medical practice clients, a single-location spine surgery practice. You’ll be able to understand exactly what they got out of their ad spend as well as some lessons we’ve learned along the way.
Monthly Ad Spend
Our spine surgery client was spending a total of $15,000 per month on Google Search Ads alone.
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Lesson: You need to allocate enough budget to make an impact. Small budgets typically won’t give you enough clicks or leads to move the needle if your goal is to get more patients. While there are no standard ranges for medical practices in terms of how much they should spend on marketing, there are a few drivers that could increase your cost:
• Your specialty: Specialties, like spine surgery, generally need higher budgets than higher-volume practices like primary care physicians because the keywords are more expensive.
• Number of physicians: More physicians should equal higher spend—especially if you’re looking to fill up the calendar with new patients.
• Geographic target(s): Single-location practices will spend less than multi-location practices. And if you have a national footprint, like a telehealth practice, you’ll need a national-sized budget.
As a rule of thumb, your budget should be driven by your revenue per patient. So, for practices like dental, you may have a lower budget than a spine surgeon who’s making much higher revenue per patient. If you’re interested in learning more, here are three ways to determine your marketing budget.
Average Cost Per Click (CPC)
Formula: Total Spend/Estimated Clicks = Average CPC
For example, our client’s $15,000 in monthly Google Ad spend generated roughly 2,142 clicks per month, resulting in an average cost-per-click of around $7.
Lesson: The average CPC varies by the conditions and treatments you’re targeting, such as “back pain” or “spine surgery,” and has a huge impact on how many leads you should expect. The higher the CPC, the fewer clicks and leads you can expect.
Average Lead Conversion Rate
Formula: New Patient Leads/Estimated Clicks = Average Lead Conversion Rate
Of the traffic (2,142 clicks) sent to the site, 192 of them became new patient leads, meaning they submitted a form on the site to request an appointment or some other lead form. This is an average lead conversion rate of about 9%. According to a recent conversion rate benchmark report from Unbounce, anything over 3.6% is above average for medical practices.
Lesson: Your website is primarily responsible for converting traffic into leads. A website user experience can mean the difference between success and failure. We often recommend that practices update their websites before investing in paid advertising. As a rule of thumb, your website should load fast, display well on mobile and have a strong call to action that includes both a phone number and a request appointment form.
Average % Of Leads That Become Office Visits
Formula: Office Visits/New Leads = Lead-To-Office-Visit Rate
Of the 192 leads from Google Search Ads, 28 became office visits. This is a lead-to-office-visit rate of 14.5%. The average here can vary—for things like spine surgery, it can be harder to get an office visit as some patients are hesitant to visit a surgeon, so it’s possible for a practice to have a much higher lead-to-office-visit rate.
Lesson: Increasing your lead-to-office-visit rate is one of the highest impact changes you can make to your marketing. In the example above, increasing the rate from 15% to 20% would deliver 10 additional patients each month without an increase in ad spend. The best way to do this is by following up fast on new patient leads.
Average % Of Office Visits That Result In Booked Procedures
Formula: New Monthly Office Visits x Average Booked Procedure Rate = Booked Procedures
Finally, for this practice, 25% of those 28 average monthly new patient office visits resulted in completed surgeries. This means an average of seven booked surgeries each month.
Lesson: Procedures can fluctuate based on many factors—if patients are ready or able to book a surgery, for example. But it also relies on how well the practice follows up with patients after a visit where they’ve been indicated for treatment.
Putting It All Together
Each of the areas of performance above has an impact on the overall results you can expect. If your spend is too little or your website is bad at converting leads, you can end up not getting the results you want.
My advice is to start with a goal and a budget and work with an expert to understand what’s achievable. They’ll run the same numbers as outlined above:
• Total Spend/Estimated Clicks = Average CPC
• New Patient Leads/Estimated Clicks = Average Lead Conversion Rate
• Office Visits/New Leads = Lead-To-Office-Visit Rate
• New Monthly Office Visits x Average Booked Procedure Rate = Booked Procedures
Remember that investing in paid advertising is mostly determined by how much you can afford to spend, and how ready your front office is to make the most out of it!
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Author: John Keehler, Forbes Councils Member