Dental Marketing ROI Calculator Used By Top Dental Practices
Understand LTV (Life Time Value) of Patients VS FVS (First Visit Spend). Conversion Rate is Important to Measure Also.
Dental Practice Marketing ROI (Return On Investment) Calculation
First, the formula
Dental Marketing Return On Investment (ROI) Formula
(Total revenue generated Minus $ spend on campaign ) Divided by $ spent on a a campaign
Assuming in this example, the dental practice spends $2795 per month on dental marketing.
What is dental FVS?
FVS stands for first visit spend. For example 1 if Susan (a patient) saw your ad on Google search, and clicked on your ad, then requested an appointment, and finally became your patient. She spent $99 on special cleaning offer. Her FVS is $99.
For example 2 if Bob (a patient) saw your ad on Google search, and clicked on your ad, then requested an appointment, and finally became your patient. He spent $300 on a filling and $50 on X-ray. His FVS is $350.
In this example below, assume average FSV is $200.
What is dental patient LTV?
LTV stands for Life Time Value of each patient.
For example 1 if Susan (a patient) stayed with you for 6 years as a patient, and she spent $600 per year on routine dental services, her LTV is $3600
For example 2 if Bob (a patient) stayed with you for 6 years as a patient, and he spent $1600 per year on routine dental services, his LTV is $9600
In this example below, assume average LTV is $6600.
What is dental patient conversion rate for your dental practice?
If you have 100 new patient inquiries per month, and you are able to convince 34 patients to visit your practice for the first time as a new patient, then your conversion rate is 34%
In the example below – data : 108 new patient inquiries per month resulted from a digital dental campaign using PatientGain’s GOLD Service
Assuming a conversion rate 34% – Dental practice has a very good staff, and they convert 34% on new inquiries to paying patients. This is equal to 36 new patients per month. Average is 30% conversion rate, for dental practices. Top dental practices are at 40+% rate. Low performing are typically at 20% or less.
Services are divided into 2 main areas. Each is 50% of the total new leads. We are simplifying this example for your understanding.
1- General dentistry – Initial visit is $200 – LTV of each dental patient is $6600 (assuming you keep each patient for 6 years)
2- Cosmetic dentistry services – primarily invisalign – Initial visit is $5000 and if you are good and convert and keep this patient for 5 years, LTV of each dental patient is $14000 (assuming you keep each patient for 5 years) – however we will not use this for this calculation.
Average LTV = $6600
So in each month ROI of marketing is:
Using Initial visit and revenue generated from each new patient:
34 new patients x $2600 = $88,400 – Divided by $2795 = 31 X (Called 31 X, or 31 times)
So your ROI is 31 Times = Using 34 new patients per month.
Using LTV – Life Time Value of each new patient:
34 new patients x $6600= $224,4000 – Divided by $2795 = 80 X
So your ROI is 80 Times = Using LTV 34 new patients per month.
So your Average ROI is 55 Times = Using average of FSV and LTV
This is an example based on 34 new patients generated. Your results may be lower or higher. There is no guarantee that you will see similar results. This is for illustration purposes only.
Case Study: PatientGain Dental Marketing Solution
Example – Based on a real dental practice, located in very competitive market. 2 locations, 4 providers, 6 dental assistants.
Dashboard – Month 1 to Month 8
In this dashboard, based on a real dental practice, the progress is documented with clear dashboards, and a project manager, plus a technical resource is available for any questions.
Month 1 data : 88 new patient inquiries, after subtracting repeat callers and sales calls, there are 69 real leads in the funnel system. Assuming conversion rate of 30%, this means 20 new patients.
………… Fast forward to month 8
Month 7 data: 498 new patient inquiries
Month 8 data: 453 new patient inquiries
Month 8 data: 453 new patient inquiries, after subtracting repeat callers and sales calls, there are 353 real leads in the funnel system. Assuming conversion rate of 30%, this means 105 new patients.