Sometimes known as the cost per acquisition (CPA), there are very few metrics with the same power as the cost to acquire an appointment regarding measuring the effectiveness of medical marketing efforts. To support your practice, you need to broaden your patient base and increase office visits, which can be tricky. Even if you manage to get a steady stream of leads, there are no guarantees that patients will make appointments.
If you’re not clued up on analytics and using metrics, don’t worry because calculating the amount you pay to acquire a single appointment is relatively simple. If you have experience with cost per lead, you already have an advantage too. Below, we’re going to explain how the metric works, why it’s essential for your office, and what this means moving forward.
What Is the Cost to Acquire an Appointment?
As we know, the abbreviation stands for Cost Per Acquisition, and it’s used right across the business world. Essentially, it means the average amount you have to pay to obtain one customer during a single campaign. If you’re running marketing campaigns, you need to know that it’s working. Otherwise, you have no information on whether you’re wasting your time or whether the campaign has kept your practice in business.
In addition to this, continually reviewing metrics like CPA allows you to optimize your medical marketing campaign over time. If you make the right changes, you should see the cost per acquisition decrease, which means you’re acquiring more patients for your marketing efforts.
Bringing the focus back to your practice, your patient acquisition quotient in measured the number of appointments made. Despite popular belief and many misconceptions, this includes all appointments including patients who have visited your office previously. With the cost per lead, this calculates the amount you pay just to obtain a contact for your practice. For CPA, this is different because only the customers who bring revenue to the office are included in the calculation.
Once you have this figure, you can then calculate how big your marketing budget needs to be to stay profitable over the course of a year. If your cost per acquisition comes out at $14 and you need to book in 1,500 appointments every year to turn a profit, your marketing budget would need to be $21,000. Of course, this cost isn’t fixed because, as you run more campaigns and find what works and what doesn’t, you should be able to reduce your CPA and therefore reduce your marketing budget.
In addition to this, you also need to consider different platforms because Google AdWords might bring in more appointments than any other platform. If your CPA is low here, you might invest more of your budget in this area rather than risking a higher cost to acquire an appointment elsewhere. As you can see, this is yet another advantage of using this metric. Without it, you could focus your attention on the inefficient platforms, and this is damaging for your profit margins.
After taking your overall marketing expenditure and dividing it by the number of new appointments gained as a direct result of the marketing effort, you’ve successfully calculated your CPA. If you spend $25,000 in 2017 and it brings in 1,300 new appointments, your cost to acquire an appointment will be around $19.23.
For example: 25000/1300 = $19.23
As long as you have all the available statistics, you can quite easily compare the efficiency of all campaigns whether it’s Google AdWords, Facebook, Twitter, or any other platform. In fact, you could even ask all new patients how they found your healthcare services and this will allow you to account for direct mail ads and blogging as well.
Utilizing this Data
Throughout this guide, we’ve mentioned making your marketing campaigns more profitable but how do you achieve this? Well, the most obvious solution would be to make your marketing efforts resonate with the audience a little better. As a health service, you may need to target specific health problems and remove the stigma that comes with them – this might persuade more people to visit your practice.
Furthermore, we also recommend designing a marketing strategy that builds long-term relationships with patients. Sure, one-off visits can be helpful, but it becomes even better if they’re visiting you in the months and years to come. To do this, things like email newsletters can be a starting point.
As long as you’re willing to improve, and you keep the basics in place (i.e., having a welcoming office, high-quality service, etc.), there’s no reason why you can’t earn regular customers and use CPA to keep growing.