What Is Marketing Growth Multiplier in Healthcare?
Growth in healthcare organizations is important, but so is growth rate. Do you know where you currently stand?
In an increasingly competitive and rapidly evolving healthcare landscape, healthcare providers must constantly work to attract and retain patients to ensure continued revenue and growth. Healthcare marketing is crucial in achieving this goal, but apart from creating an effective marketing strategy, your marketing efforts need to generate a positive Return on Investment (ROI) to justify the resources allocated to them.
This is where tracking metrics such as Patient Acquisition Cost (PAC) and Lifetime Value of a Patient (LVP) become essential. By measuring the cost of acquiring and retaining patients, you can see if your marketing efforts are really paying off. However, to gain an even more comprehensive understanding of the ROI, you should consider using another critical metric — the Marketing Growth Multiplier.
How to Calculate the Marketing Growth Multiplier in Healthcare?
The Marketing Growth Multiplier in healthcare is a ratio that compares LVP to PAC. In other words, to calculate it, you need to divide the LVP by the PAC to determine how many times the revenue generated by patients exceeds the cost of acquiring them.
A high Marketing Growth Multiplier in healthcare shows that the revenue generated by patients is significantly greater than the cost of acquisition, indicating a positive ROI. By contrast, a low Marketing Growth Multiplier in healthcare indicates that the revenue generated is less than the cost of acquiring patients, highlighting the need for improvements in your marketing strategy. Therefore, tracking the Marketing Growth Multiplier in healthcare helps you gain valuable insights into the cost-effectiveness of your marketing efforts and make evidence-based decisions to improve patient acquisition and retention efforts.
Let’s use an example to explain this calculation process. Suppose a dermatology organization invests $15,000 in a combination of social media ads and direct mail campaigns to attract new patients. From these efforts, they successfully acquire 15 new patients.
The organization estimates that their average LVP is $30,000 by taking into account factors such as the average revenue each patient represents, the frequency of visits per year, and the average length of the patient’s relationship with the organization. To calculate the PAC, they divide the total marketing investment ($15,000) by the number of new patients acquired (15), resulting in a cost of $1,000 to acquire each patient.
The next step involves calculating the Marketing Growth Multiplier by dividing the LVP($30,000) by PAC($1,000). In this example, the Marketing Growth Multiplier is 30x. This means that for every $1 spent on acquiring a patient, the dermatology organization can expect to earn $30 in revenue from that patient over the course of their relationship with the organization.
A high Marketing Growth Multiplier indicates that the dermatology organization’s marketing efforts are generating a positive ROI. This means that they can focus more efforts on maintaining the quality of patient care while continuing to refine their marketing strategy to ensure it’s as effective as possible.
However, they can’t stop there. Through continuous tracking of the Marketing Growth Multiplier in healthcare, the dermatology organization can identify areas for improvement in their marketing strategy, make data-driven decisions, and ensure they’re producing favorable ROI.
How to Improve the Marketing Growth Multiplier in Healthcare
In general, every healthcare provider should aim to achieve a Marketing Growth Multiplier of at least 3x, indicating that the revenue generated by patients is at least three times higher than the cost of acquiring them.
However, if the Marketing Growth Multiplier is below 3x, it’s time to consider some changes in the marketing mix. This isn’t necessarily a cause for concern, as there are plenty of things that can be done to improve the ROI of marketing efforts.
To extend the example from above, if their Marketing Growth Multiplier was lower than 3x, the dermatology organization would have to take a closer look at their current marketing efforts and see if there are any areas for improvement. They can experiment with different ad formats, content, or targeting options to see if they can generate better results but also consider lower-cost marketing channels to attract new patients.
For example, 46% of all Google searches are performed by users looking for local information. Using local keywords and optimizing your website for local search help you increase your visibility in search results and generate more traffic to your website. This can be an effective way to attract more potential patients to your practice without spending a lot of money.
To increase visibility in local search even more, you have to optimize your Google Business Profiles (GBPs) with relevant keywords, accurate contact information, and detailed descriptions of your services. Providing accurate data, such as your hours of operation, services offered, and address makes it easier for patients to find and contact your practice and improves the overall patient experience.
In addition to this, 84% of people trust online reviews as much as a personal recommendation and your GBPs can provide an opportunity for you to engage with potential patients. By responding to reviews and answering questions from potential patients, you can show that you’re attentive to their needs and committed to providing quality healthcare services.
Social media platforms are another popular source of health information for lots of people, with 41% of consumers claiming that it affects their hospital choice. By consistently creating and sharing engaging content on social media, you can increase your reach and visibility, and attract potential patients who may not have found you otherwise. What’s more, social media ads can be a cost-effective way to generate more patient leads. If you target specific demographics and interests, you increase the chances of reaching potential patients who are most likely to be interested in your services, thus ensuring a positive ROI from your advertising spend.
Acquiring and Retaining Patients More Effectively
The importance of tracking the Marketing Growth Multiplier in healthcare can’t be overstated, as it enables you to identify areas for improvement in your marketing strategy, make informed decisions, and continually optimize your efforts to acquire and retain patients more effectively. This way, you can gain valuable insights into the ROI of your marketing campaigns and justify the resources allocated to them.
Tracking metrics such as the Marketing Growth Multiplier in healthcare and developing effective marketing strategies to attract and retain patients in a competitive market can be both confusing and challenging. However, the easiest way to stay on top of this is to rely on SocialClimb and its range of intuitive and easy-to-use tools.
SocialClimb offers you a range of features such as online reputation management, local search optimization, and patient acquisition tracking to manage your online presence, engage with patients, and improve your ROI. This allows you to monitor the effectiveness of your marketing efforts in real-time and obtain data-driven insights to optimize marketing campaigns and improve patient acquisition and retention.