The Masters of Marketing Administration is an educational advancement for training of business owners and their administrative and support staff on the Viva System—a system that puts in place the
ideal residual business model for consumer
acquisition, loyalty and retention.
Copyright © 2018 by Gregory Hughes, Viva Concepts, LLC. All rights reserved. Grateful acknowledgement is made to L.Ron Hubbard Library for permission to reproduce selections from the copyrighted works of Viva Concepts, LLC.
This is an overview of the marketing analysis as well as information regarding the amount of mailers that were sent out, the response rate and the verification of postal receipts.
I thought I would give you some industry standards on the metrics of direct mail for the dental industry as well as several marketing laws that give an educational aspect to any direct mail being done in today’s market.
The diagram below shows the relative importance of the different types of marketing in the dental industry. Clearly, everyone needs a website. However, it is conclusive that direct mail (neighborhood mailers) are the lowest cost of patient acquisition in dentistry. It is at the top of
the pyramid, only surpassed by word-of-mouth marketing. Word-of- mouth marketing, while being the lowest cost, is almost impossible to build a practice as it is too slow and the numbers of new patients from such is too low to sustain a growing practice.
Direct mail marketing is by far the most economical of all other types of marketing.
Viva has studied metrics on the dental industry for over 27 years. The source of research is muliple metric companies in our industry. A key one is called the Direct Mail Association of America, or the DMA. The key factors on direct mail workability are the following:
a) Unquestionably the most significant method of obtaining neighborhood and community dominance and market share is through repetition of direct mail. Direct mail however can be ineffective without an understanding of 4 KEY factors.
1. The OFFER.
2. A HIGH open rate!
3. Repetition to the same cart routes (a minimum of 4x per year)
4. Call Conversion by reception (converting price shoppers into appts)
b) Marketing Law: The marketing law below is used by the advertising and marketing industry worldwide. It is a critical component of making any marketing work:
THE RESPONSE RATE TO ANY MEDIA OR PRINTED ITEMS IS ALWAYS PROPORTIONAL TO THE VOLUME OF DISTRIBUTION.
As an example, if a practice sends 5,000 pieces of direct mail it will receive about 1/2 the response of another practice that sends 10,000 pieces in the same time period.
c) Response Rate: Dental Industry Metrics. The average response rate in the dental industry (quite different from other industries due to dentistry’s association with apprehension, cost and pain) is 0.002%. This is 1/10th to 2/10ths of 1% across the country. This metric has existed and remains relatively consistent for the past 12 years.
What this means? This means if 10,000 pieces of direct mail are sent out in the month of January, the response (calls to the practice) will avearge around 10-20 calls. If the office converts all of these calls, it
will receive 20 new patients. If it converts 10 calls of the 20, the cost of marketing has just doubled for the practice.
This is why call conversion is critical to any marketing campaign. The doctor and/or practice cannot receive one patient without going through the receptionist. All marketing efforts result in a call to the receptionist.
COST OF ACQUISITION
The average cost to acquire a patient in the dental industry in any metropolitan/suburb area is $300 to $450 per patient.
Internal marketing can reduce this cost if the practice has an excellent internal referral program.
MARKETING BOOK, EDUCATION OVERVIEW
I have included a link below that our clients do as a course. It is extremely informative and gives an overview of all the types of marketing and the cost of each within the dental industry.
As you are utterly key to the expansion of the practice, your skill and knowledge will greatly assist in your work in the field of marketing and advertising.
Neighborhood Brochures Mailed
The Moorestown Dental brochures were mailed on the following dates from the post office:
6,324 Sept 6,872 Aug 6,324 July 5,839 June 6,872 May 6,324 April
Cart Routes: 6,324 April, July, Oct and Jan
6 6 20 11 7 7
Cart Routes Mailed To
Cart Routes: 6,872 Cart Routes: 5,839 May, August, Nov June, Sept, December
The annual Average Transaction Value for dental patients in the industry is $1,266 per patient. This value increases when the practice offers more services, i.e., invisalign, implants, ortho straightwire, endo, pedo and oral surgery and perio.
Average Transaction Value
At 57 patients, using the lowest ATV (Average Transaction Value), the return on investment is as follows:
57 X $1,266 = $72,162
Referrals add to this value, but raw data is the above.
Percent Response against Industry Metrics of Direct Mail
The total number of mailers that were sent out is 38,555 neighborhood mailers. Using the middle metric of 1/10th to 2/10ths of 1%, your marketing should have produced the following:
0.0015 (2/10ths of 1%) x 38,555 = 57 New Patients
Your response is exactly at 0.0015%. Your response is right at the industry standard for the volume you are sending. This percent always increases through repetition. It reaches 0.002% and goes as high as 0.004% as the campaign repeats.
COST of ACQUISTION
Your cost of acquistion (cost per patient) is right around $400 per patient. National average cost per acquistion in dental industry is $300 to $450/patient.
Analysis of your response is not above or below the national average. e cost of patient acquisition is right in the middle.
Both of these we want to bring DOWN to make them above average. Your cost of acquistion can be brought to below $300 a patient.
e response rate can easily reach 0.003%, which is nearly 2X what you are currently obtaining. is will come about through repetition to the same cart routes and keeping a scheduled routine of neighborhood mailers going out.
Separately, which I do not have the metrics or analytics, are the number of calls that come from the brochures versus the number that are converted. It appears that your office staff, receptionist, is skilled as the numbers show she is converting. But if even 10 to 15% are lost on price queries (not converted), it drives your cost/patient up and your response rate down.
The best response was on the cart route in the routes of April, July and October. But it was only high on one month (July).
The overall strategy on any industry markting is to obtain new patients, but more importantly, is closing the door on the leakage at the back door.
The average loss of patients across the country is over 90%. This is the hygiene retention loss, which is a primary focus of the entire Viva System.
In terms of recommendations:
The cart routes are responding. We want a better response and ROI. Repitition is your key to this while concurrently driving an internal referral program in your hygiene dept to reduce acquistion to less than $300 a patient.
90% of Every New Patient Database
Is Lost Out the Back Door
Separately, my recommendation is to:
a) Review and go through the External Marketing Book using the link provided.
b) I can send you the checksheet so you can do this course right in your office.
c) Implement the Hygiene Program to stop the leakage.
d) Schedule a share-screen with the doctors and yourself to go over the metrics and the hygiene loss and actions that we’ve implemented which have revolutionized retention department of hygiene. The information is beyond staggering and it requires education and training, which we can set up so we do it on line to get the most benefit we can out of your program.
My Kindest Regards,
Greg Hughes, DDS
CEO Viva Concepts, LLC