But as a business owner, I quickly learned that it didn’t matter how much I liked math and numbers, they are a fact of life.
You’ve got to be able to figure your stats. Determine your prices. Set up a care plan with x number of visits per week, month, etc. You need to keep good business statistics and know what those stats tell you.
For example, early on in practice, I thought my care plans were great. Patients were prepaying for care and my volume was high. What could be better?
The problem was that no money was coming in. So, I sat down and figured my average collection per visit. It came to about $17. No wonder the business was broke. But, without knowing the simple formula of collections divided by visits, I would not have been able to out this huge blunder in my practice.
You might be thinking this is simple stuff, anyone can figure it out. Yet, you would be surprised at the chiropractors I speak with who either don’t know how to figure simple stats or if they know how, simply don’t keep any numbers for their practice.
Here’s the biggest “chiropractic math” problem I see…
Chiropractors don’t figure ROI (Return on Investment)!
Let’s do a basic math problem. Say I get 12 new patients in the door from a newspaper ad which cost me $1000. And let’s assume I’m new in practice, and my conversions are low, so I only convert 4 of those patients to a care plan. If my care plans are worth $1500 (which is a very conservative case value) what was my ROI?
It’s ok to use a calculator on this test. (I had to 🙂 )
The answer is 6:1, or a 600% ROI. So for every dollar invested, I made $6 back.
Do you run the ad again or not? How low is the ROI going to be before you say this ad doesn’t work?
You bet I’m going to run that ad again! For me it’s got to bring in at least 2:1 ROI over time. Meaning, after all the money comes in from the patients care plans, the minimum ROI it can bring is 2:1. Occasionally a newspaper ad will be a 1:1 or negative ROI, and I’ll tweak something or run it in a better paper and it immediately becomes a huge winner!
But, some chiropractors think an ad is a failure if it doesn’t bring in a 20:1 ROI or higher. In other words, they are upset if their ROI is only 5:1. What other business owner would be upset that the $1 they spent brought back $5? No one.
Unfortunately, it happens daily in chiropractic. Look, the days of spending $0 on marketing and bringing in $30…$40…$50k a month are over. The days of running a killer ad and getting 676 new patients is over. It’s not 1991 anymore.
It’s time to face the fact you’ve got to pay for some marketing. And you’ve got to be happy with a positive return on investment. Now the only question which remains is which marketing gives the best return?
What billion dollar business gets better than a 5:1 ROI on their external marketing dollars? What small business get’s better than this?
Are all your eggs in one basket?
Man how I wish they had a class on ROI in chiropractic school. As simple as it sounds, a doctor in an emotional situation or someone who says “I’m just not good at the business side of chiropractic” does not run these numbers.
I was there. I came out of school and thought 1 magic marketing pill, one magic ad would solve all my problems. I’d run one ad, get 100 new patients, and within a short time I’d have a 100% referral practice.
Then I woke up one day and realized if there was a 1 magic ad that brought in 100 new patients, everyone would soon be using it, and it wouldn’t bring in 100 new patients anymore.
I realized I would have to use multiple marketing strategies to grow my practice. But which ones? And how should I proportion my marketing budget out?
Then it came to me. Measure the ROI, return on investment, of each strategy. Put more money into the ones with the highest ROI. If it shows a 6 or 12 month decline, readjust the money into other high ROI marketing. Simple really.
The best thing about this strategy, was that I wasn’t relying on just 1 thing to grow. If the newspaper ad didn’t bring in a 100:1 ROI for me, no sweat. I’ll take a 5:1 ROI because I’ve got 7 other streams of new patient generation methods.
In other words, I didn’t put all the success on my practice on one thing. Even if that one thing works, I’ll need other streams of new patients so I can pay the bills, right?
Are you measuring your ROI? Are you putting the full load of your practice success on 1 ad or marketing strategy, or are you spreading your marketing out evenly over many different ads and other strategies?