Profit Killer #5: Not Knowing Your Key Performance Indicators And Marketing ROI
- Posted on: Nov 5 2019
To make the changes needed for your profit to grow, you have to know how your business currently performs. Track and measure your Key Performance Indicators (KPI) and make sure you get a proper return on your marketing investment (ROI).
Which KPIs should you measure?
We recommend tracking and measuring the number of leads, conversions and consultation ratios combined with the ROI necessary to create the desired revenue or sales for your practice.
Forecast your revenue at least one year out with a reasonable growth percentage based on past service sales, marketing budget, staffing providers, and facility capacity. Revenue projections need to be based on realistic and measurable goals and strategies.
To measure your performance, create a list of each marketing effort used for your practice. The goal is to get a 4:1 return or a 400% ROI. So for every $1,000 spent on marketing, you should bring in $4,000.
The most common digital marketing strategies fall into the following categories (listed in order of importance):
- Sales Funnels
- Social Media Management
- Social Media Paid Advertising
- Referral Sites like RealSelf
- Other free physician locators
Download our ROI and KPI Worksheet to start measuring your spending, performance, and revenue in each area.
To fill out the worksheet and estimate your ROI, you will need to know your annual revenue (we recommend going back three years), and find out how many leads you get, how many consultations you perform, and how many cases you book.
Call Conversion And Closing Ratios
In the aesthetics industry, it costs $100-$300 to get a lead (new client inquiry). The lead conversion rate varies by lead type, so while the cost per lead is lower in the social media paid advertising arena, the conversion ratios are equally lower, and the quality of social media leads seems to convert at the same $100-$300 rate.
Depending on your vendor partners or scheduling software programs, you can easily track conversion ratios with standard reporting. You must be able to measure the performance and ROI on your marketing investments to feel confident you have made a wise investment.
The average closing ratio for consultations is around 30%. Your goal should be 50%, but a highly successful practice may reach 75%.
To explore this topic in more detail and learn how to use our planning tools, purchase my newest book Top 10 Profit Killers for Plastic Surgeons and Medical Spas.
Does your practice need more revenue? Check out PGC’s On Site Sales Events & Social Media Marketing offers here.