Diving into the business side of your practice can feel intimidating, especially if you’ve never received any formal marketing training before. And while you don’t need to take on the job of a large-scale marketing department to stay profitable, measuring just a few marketing metrics can go a long way in ensuring your practice succeeds.
One key metric to get acquainted with is your cost per lead, or CPL. The CPL describes the cost to for someone to complete a explicit action that shows interest in becoming a patient at your practice. It could be the web surfer who reads a helpful blog post on your website, then enters their email to receive more information from you or the prospect who clicks a Google AdWord for your practice and comes in for a free consultation on an elective procedure — for example, veneers from a cosmetic dentist — before making the final decision to go forward with a procedure.
These leads are the lifeblood of growing your practice. The goal of your marketing is to create a steady stream of these, since some of those people will become loyal patients and add significant revenue to your bottom line.
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Why is it important to measure your cost-per-lead?
Even if your practice is already doing a great job at generating leads, taking the time to calculate your CPL gives you worthwhile insight into how your business works. Your CPL is truly valuable when it comes to understanding the effectiveness of your marketing strategies. It’s a great indicator of what’s working and what’s not, helping you make choices about how to focus your efforts going forward. If you’re ignoring your CPL, you’re essentially taking a blind guess as to how effective your marketing is, and likely sinking money into inefficient methods (or ignoring the ones that are performing best).
The way you can glean these performance-based insights is relatively straightforward. If your Google AdWords campaigns have the lowest CPL of all your marketing strategies, you’ll likely want to prioritize similar ads in your marketing budget going forward. On the other hand, if running an email newsletter has a CPL that’s much higher than your other marketing methods, you may want to look further into its results to find out if it’s a worthwhile investment in the future.
How to measure the cost-per-lead for your practice
The most straightforward way to measure CPL is to divide your marketing budget by the number of leads it brought in. If you brought in about 315 leads with your $10,000 marketing budget, for example, your overall CPL was $32.
You’ll get more precise insight into your marketing, though, if you measure the CPL separately for different marketing streams. Technology can help make this easy. Major advertising platforms — Google Adwords, Facebook and Twitter — calculate the CPL for your campaign for you, and email marketing platforms like MailChimp easily integrate with Google Analytics to make it easy to track your CPL.
Calculating the CPL of non-digital marketing, such as a direct mail campaign, takes a little bit more work but it’s still manageable. Let’s look at an example. Say you’re a cosmetic dentist and spent $1,500 on a small direct mail campaign advertising in-office whitening. Through tracking your results — by training your staff to ask how prospects found you or requiring people bring the mailer in for their free consultation — you find that 40 people call for more information or ask for a free consultation to find out if they’re a good candidate for the procedure. Dividing 1,500 by 40, you’d find that the CPL for the campaign was $37.50. You can follow a similar process to calculate the CPL for blogging and other web content, dividing your writing costs by how many leads found you via your blog.
Interpreting and evaluating your cost-per-lead
Measuring your CPL has one other major benefit — you can compare your marketing results with industry benchmarks to find out how your marketing results stack up. Industry experts report that CPL in the medical and health industry generally ranges from $26 to $50. You can expect some marketing streams to cost more than the average, though — the average CPL for health and medical companies using Google AdWords is about $125.
Ultimately, though, you should keep in mind that your CPL is just one metric to help track your success — it doesn’t tell the whole story. Some leads may be more valuable than others, so a higher-than-average CPL might be worth it to advertise more expensive procedures, while some marketing methods might have a higher CPL but be more efficient at turning leads into paying patients.
Look at your CPLs in combination with other marketing metrics — like the cost to acquire a patient, and the long-term value of each patient — to get a well-rounded look at your marketing and make informed decisions for the long-term financial health of your practice.