Anatomy of a Successful Dental Marketing Mailer
Seven Steps to Success
There are seven steps, which must be completed correctly for any dentistry marketing strategy to be a success. Due to space constraints, we illustrate this with one example: a direct mail campaign. These principles are equally applicable to other strategies.
The first step is to identify your objectives. There are two general objectives that are appropriate for the dental office. The first is to increase the volume of new patients. For example, if your office generates an average of 40 new patients per month and, based on your available capacity and other considerations, you could comfortably absorb an additional 50 percent per month your objective might be written: "Increase the number of new patients by an average of 20 per month." We use "average" to emphasize that the actual increase will probably vary from month to month. It is the average increase over time that should be the relevant measure.
The second objective is a change in the composition of your patient base. For instance, you may want to change the patient mix from 60 percent fee-for-service and 40 percent insurance-based to 30 percent and 70 percent respectively. Or you may want to attract more patients desiring a specific procedure, e.g. cosmetic or implants.
Whichever objective you choose, you'll want to make it as specific as possible, and commit it to writing because, when you do not know where you are going, any road will take you there.
Once you have agreed on your objective, you'll want to determine your budget:
a) Calculate cost per mailer (data, printing, letter shop, and postage)
b) Calculate quantity of mailers necessary to achieve your objective
c) Multiply a) by b)
Adding any one-time set-up costs, e.g. mailer design, to the result is your total program budget.
To calculate cost per mailer, you'll need to factor the cost of your mailing list, design, printing, fulfillment (letter shop), and postage. Depending on what and how you mail, your cost can range anywhere from twenty five cents to over a dollar. Let's assume it is fifty cents: Your monthly budget, then, is $2,000 (4,000 mailers @ $.50).
Let's say you want to add 10 new patients per month to your practice. A reasonable expected response rate to a mailing for new patients is about one quarter to one half percent. Therefore, (choosing a conservative response rate) the number of mailers per month you will need to send is 10/.0025 or 4,000.
Armed with your budget, you can next perform your benefit/cost calculations. This is perhaps the most often overlooked step, which is unfortunate because this exercise can show you what you may reasonably expect by way of return on investment from any strategy under consideration.
Briefly, the exercise involves determining the value to your practice of a typical patient. One conservative measure of the value of a patient is the Average Annual Patient Contribution to Overhead (AAPCO). Your management consultant may have an equally valid measure.
The following is an abridged screenshot of a program that may be downloaded from:
http://www.AmericanDentalCo.com/AWFUP/STS/AAPCO.zip
Track It!
Analysis Program
Follow the steps below to Track the effectiveness of your marketing program.
Step 1:
Calculate your Average Annual Patient Contribution to Overhead (AAPCO).
This will calculate your average annual value of a patient for your particular
practice. In other words, what a patient is worth to you on a yearly basis.
Randomly select 30 patients who have been with the practice for at least one year.
List separately by patient the total Hygiene and Non-Hygiene Revenue generated in
the most recent 12 month period (must fill in patient name field).
Patient
Hygiene
Non-Hygiene
Name
Production
Production
1
Patient One
$275.00
$675.00
2
Patient Two
$0.00
$0.00
*
*
*
*
*
*
*
*
*
*
*
*
29
Patient Twenty Nine
$123.00
$8,755.00
30
Patient Thirty
$0.00
$1,333.00
Total:
$5,227.00
$22,134.00
*Truncated Table
*.89 and .79 are average adjustment factors.
0.89
0.79
Adjusted Hygiene Production = $5,227 x .89 / 30 = $155.07
Adjusted Non-Hygiene Production = $22,134 x .79 / 30 = $582.86
Total AAPCO…………………………………
$155.07 + $582.86 = $737.93
Step 2:
Calculate the Lifetime Value of a Patient
Lifetime Value of a Patient (AAPCO x 8 yearst) =
AAPCO x 8
t National Average is 8 years.
Step 3:
Calculate Your Break Even Quantity
Enter total cost of your marketing program:
$12,000.00
Number of Contacts:
35,000
Your Break Even QUANTITY is:
16.26 i.e. 16 patients
[Cost of Marketing Program/AAPCO]
Your Break Even Percent is:
0.04%
[Break Even Quantity/Number of Contacts]
Step 4:
Calculate Ratios
Used for sensitivity or "what if" analysis to
help you select a given marketing strategy.
Enter the Number of Patients who responded to your marketing program:
175
Enter the # of appointments scheduled:
150
Enter the # of appointments kept:
115
Your Conversion Ratio Is:
85.70%
[# of appointments scheduled/# of patients who responded]
Your Quality Ratio Is:
76.67%
Step 5:
Calculate your ANNUAL* Return on Investment
PERCENT Return On Investment:
(AAPCO) * (# of appointments kept) = $84,861.95 /
Total cost of marketing program = $12,000
700%
DOLLAR Return On Investment:
(AAPCO) * (# appointments kept) -
Total cost of marketing program
$72,861.95
*Conservative measure as does not factor referral or recare.
Dividing your program cost by your patient value yields your break-even quantity, i.e. the number of patients the program needs to generate for you to be indifferent (cost = benefit) about the program. There are a number of other effectiveness calculations that can and should be performed, but these are beyond the scope of this chapter.
Now that you have a clear picture of your objectives and budget, and have chosen, based on your benefit/cost analysis, to proceed with the program, it's time to choose who should receive your mailing and how often. That is, select your mailing target and frequency.
Our company performs this task by first conferring with our client to confirm the preceding three steps. We then search for individuals and households that, based on our experience, are most likely to respond to the invitation we'll be making on behalf of the client. We use this to arrive at our mailing target. A sample (and simplified) demo-graphic report of the proposed target, which includes zip codes sub-divided by mail carrier routes, and a map of the same area showing mail carrier route boundaries, are reproduced on the following pages.
Sample Report of Proposed Target
Analysis Level: Carrier Route (duplicates not allowed)
Center Point for Analysis - 4700 E XYZ LN, Brighton, CO, 80601
Proposed Target Area: 3.4 Miles
House
Dist.
(INDEX)
Carrier
City
hold
Cumulative
To
Demand
06 Median
Route
Count
Household
Site
For
Household
Count
Miles
Dental
Income
80601R014
BRIGHTON
654
654
1.09
108
$69,432
80601C011
BRIGHTON
447
1,101
0.28
117
$69,340
80601C004
BRIGHTON
445
1,546
0.5
114
$66,231
80601C009
BRIGHTON
304
1,850
0.61
99
$52,414
80601C013
BRIGHTON
513
2,363
0.66
126
$82,750
80601C003
BRIGHTON
444
2,807
0.86
88
$47,576
80601C008
BRIGHTON
563
3,370
0.92
91
$45,192
80601C015
BRIGHTON
372
4,311
1
118
$78,125
80601C012
BRIGHTON
360
4,671
1.02
89
$47,353
80601C001
BRIGHTON
364
5,035
1.08
86
$48,106
80601C005
BRIGHTON
400
5,435
1.17
90
$47,250
80601C007
BRIGHTON
736
6,171
1.2
94
$38,844
80601C014
BRIGHTON
488
6,659
1.42
101
$58,403
80601C006
BRIGHTON
675
7,334
1.44
61
$39,716
80601C010
BRIGHTON
471
7,805
1.67
86
$46,400
80601C002
BRIGHTON
269
8,074
1.76
72
$39,231
80601R013
BRIGHTON
687
8,761
1.78
90
$56,977
80601R024
BRIGHTON
450
9,211
2.29
117
$77,679
80601R003
BRIGHTON
348
9,559
3.06
122
$62,969
80601R010
BRIGHTON
649
10,208
3.08
117
$77,560
80601R020
BRIGHTON
634
10,842
3.4
117
$77,778
Households In Radius:
10,842
Median
100
$58,539
Map of target Zip Code 80601
The approach of selecting a mailing target by using mail carrier routes as targets rather than blindly selecting entire zip codes is superior because it allows delivery to specific areas within a zip code that might be a highly desirable market for your practice, while eliminating those areas of the zip code that are not as attractive.
The next step in the process of implementing a successful direct mail strategy is to select mailer design and content. This is probably the most important step because what you send will determine more than anything else, the response to your mailer. A number of factors need to be considered, including use of color, images and photographs, degree of personalization, mailer type (envelope, post card, brochure, other), offer(s), and of course, cost.
Once you've chosen your design, the next step is to have your mailers printed. Be sure that whoever performs your design and print functions is familiar with postal regulations. More than one dentist has experienced the nightmare scenario of having thousands of mailers produced, only to learn that some aspect of their mailer violates one or more postal regulations, rendering the entire stock of mailings worthless! As a general rule, you should require that all vendors share references of clients (ideally, dentists) for whom they've performed a similar service.
The final step in the process of implementing a winning direct mail campaign is effective and ongoing program tracking and evaluation. The only way to know how well a given tactic is performing is to track the response. Simple and cost-effective tools such as tracking telephone numbers and dedicated URLs (website landing pages) make it possible to include this vital component.
Success with any dental marketing tactic requires that each 'link' in the chain be strong and connected.
Once the chain has been forged, close adherence to general marketing principles ensures a handsome return on dental marketing investment.
Questions and Answers
Avoid any relative words in advertising. Words like stronger, better, less are relative. Also avoid words indicating an extreme position like "No 1", "the best", "quickest" etc. Quantify any claim and support with a testimonial or certifying agency. Quantify quick delivery by saying how fast, most durable by saying how long. Mind can see and feel only quantified terms. So use quantified terms to make the prospects understand easily.
The most efficient use is to promote your business. Indeed, they have become a cost effective tool in your marketing arsenal.
Generating a particular variety of envelope needs knowledge of the medium, printing procedure, and tools. Recognize the fundamental procedure and components affecting envelope printing to come back up with the sought after consequence.
Even Master Marketers find the subject of writing a sales letter confusing and sometimes intimidating. There are hundreds of books and thousands of articles on the art of writing an effective sales letter, each with its own unique viewpoint.
Stop your prospects in their tracks with powerful headlines and you draw them into your sales message. Here are four proven techniques.
I consider selling to be the art of allowing someone to make an informed choice as soon as they can be shown the benefit(s) from that choice. Let's analyze that statement's elements to gain a deeper understanding of the definition.
Non-Profit dental organizations require a range of resources from professional and lay volunteers to equipment, supplies, publicity and financial support.The need for organizations to deliver dental education and treatment is now more acute than ever.
Enthusiasm is contagious. We tend to adopt the energy level of the person on the other end of the line. Obviously, this does not mean inappropriate outbursts of energy, but rather a realistic expression of the sense of pride, comfort and happiness you possess about your chosen career and place of work. (If you don't feel these things, it's time for a reality check).
There's no doubt about it. Questioning is an art. The best anyone can do to help another master this skill is present some basic guidelines. The rest is up to the person whose job it is to convert the caller into a solid patient appointment. The good news is that, to become adept at questioning, one needs to become an excellent listener because, only by listening can you learn what needs to be asked.
In our coaching team members on how to effectively connect with first-time telephone callers (in other words, the ones who are considering joining your practice but need first to be sold a bit), we've found the simplest trick in the bag is simply to get and use the caller's name.
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