Where is your practice going in 2009?
In this month’s issues of The Chiropractic Marketing Newsletter, I’m covering the 7 most important numbers you must track in your office…and what you should be doing to improve them. This newsletter is an 11 page ‘seminar-in-a-box’ mailed right to your doorstep every month. It’s only $29.97 per month, can you cancel at any time (but I don’t think you’ll want to when you see the valuable information that’s revealed.)
This issue mails out on March 9th at 10AM CST. If you want to receive your issue in the mail, make sure you subscribe by then.
Here is an excerpt that covers #5 out of 7. The newsletter goes into much more detail about how to improve each of these 7 numbers to bring more growth and profits to your practice.
#5. Case average.
Case average is a number that represents how much money a new patient will generate over time in your practice. You will sometimes hear it referred to as “lifetime value of a patient.”
You figure it by taking your collections for the month (or quarterly, yearly) and dividing by the number of new patients during the month. And make sure to use the new patients defined as in #1 above, not just the number of patients who started care.
Some chiropractors don’t like to figure this number, because they say you’re putting a dollar value on the patient’s head. But let’s face it, you’re running a business here. There are two parts to running your own practice… a clinical aspect and a business aspect. This newsletter is about the business aspect. (I trust you’ve got the clinical side figured out.)
The biggest reason to determine case average in your practice is to make good marketing decisions. Combine it with your conversion rate and you can really drill down on your marketing
Let’s run through an example…
An ad costs you $1500 to run. The last two times you ran it you got 13 new patients. You’re thinking about running it again, but your not sure if its really worth it.
But because you read this newsletter, you’ve been keeping track of your numbers for awhile. You know that every new patient that walks in the door will equal an average case of $1500. And you know that if a new patients comes in, you have a history of converting about 60% of them to care.
So if the ad produces 13 new patients, you’re going to convert 8 of them (13 x .60 = 7.8 rounded up).
8 new patients times $1500 case average is $12,000.
So now back to the question. Should you spend $1,300 on an ad to get $12,000 in return?
If you said “NO”, you need to go back and reread the above paragraph until you get a yes.
As a side-note….
This is the problem with judging your marketing solely on the number of new patients. Some chiropractors think…”13 new patients, well gosh Dr.. Beck, that’s not very many. Dr. Joe Blow said he got 187 new patients from an ad!”
That’s great for Dr. Joe. But I wonder what his conversion percentage is? And what’s his case average? Because if he really did get 187 new patients and converted most of them, he’s got a million dollar a year practice.
This bring us to our next number you must be tracking…