How to Measure and Improve Patient Acquisition Cost for Your Weight Loss Practice
— By Karol Clark, MSN, RN
Patient acquisition cost is an important metric that helps you make informed decisions when it comes to measuring the effectiveness of your marketing strategies.
Have you ever invested in a marketing strategy that sounded like a “home run” only to find that it turned into a “learning experience” with minimal or no return on your investment? This is frustrating, to say the least. It also happens more often than many would like to admit. In fact, some weight loss practitioners may not even measure outcomes. Rather, they choose to continue a marketing campaign or initiative because it seems to be working for another competitor, or previously produced results.
In an industry where there is constant change, it is imperative to not only measure your patient acquisition cost, but continuously work to make improvements so you are maximizing any marketing dollars spent. Whether you use an outside marketing agency, or handle marketing in-house, this information will help guide your decisions and marketing spend.
What is Patient Acquisition Cost?
Patient Acquisition Cost (PAC) refers to the total cost incurred to acquire a new “paying” patient for your weight loss practice. This metric considers various expenses associated with attracting, converting and retaining patients. The goal is to understand how much money is spent on marketing, advertising, outreach, and other activities to bring in a new patient.
It is important to note that your patient acquisition cost is different from your Cost Per Lead (CPL). Your PAC is the cost to acquire a new paying patient and your CPL is the cost to acquire a new lead interested in what you offer. While obtaining quality leads is very important, the obvious goal is to turn ideal leads into established patients — also called lead conversion.
How Do You Measure Patient Acquisition Cost?
The first step to measuring your patient acquisition cost is to compile a list of all relevant costs associated with patient acquisition. This includes expenses for online and offline marketing efforts, wages for team member time for such efforts, website/landing page development, advertisement spend, and any other investments made to attract and convert potential new weight loss patients.
The formula for calculating patient acquisition cost (PAC) is uncomplicated. Your PAC equals your total marketing and sales expenses over a period of time divided by the number of new patients acquired.
PAC = Total Marketing and Sales Expenses/Number of New Patients Acquired.
Your patient acquisition costs can vary across different marketing channels. Your goal is to keep your PAC as low as possible and ensure a positive return on your investment.
Tracking this metric consistently and over time can provide valuable insights into the success of your marketing campaigns. In fact, while it is important to track all expenses for patient acquisition overall, it may be easier to track your PAC for a specific campaign or marketing channel to determine which are performing best. This data is extremely important for making smart decisions regarding allocation of time and money now and in the future.
Challenges for Weight Loss Practices
There are a number of challenges for weight loss practices that can impede your ability to accurately measure your patient acquisition costs and/or quickly adjust to the many changes occurring specific to the weight loss industry.
- Lack of Experience or Reliable Resources: During medical training, marketing is not a topic generally covered in any detail. Thus, it is something that you may not feel qualified to address. Yet, it is an important and necessary part of any business. In addition, depending upon the size of your weight loss practice, you may not have access to reliable resources for effective marketing. Or, you are bombarded by many “sure thing” marketing options by outside vendors. In the end, all of these factors can make it difficult to determine what is best for your situation.
- Extended Patient Journey: Unlike other specialties, weight loss (particularly weight loss surgery) involves a more extended patient journey and decision-making process. This requires measurement of the cost for patient acquisition over months. This can complicate your measurement, especially as marketing initiatives are modified.
- Regulatory Compliance: Particularly in health care, it is important to ensure that your marketing, advertising, and sales content follow industry rules and standards as well as any laws in place for protecting patient information.
How to Improve Your Patient Acquisition Cost
Improving the cost per acquisition for any medical or surgical weight loss practice requires staying mindful at the various stages of your patients’ journey and responding quickly to keep you and your practice top of mind. When they are ready to say “yes” — if you are the practice in front of them and the practitioner(s) they know and trust — you are much more likely to be the one they will choose. Here are some ways to improve your patient acquisition cost:
- Metric Measurement: Set into place specific metrics that are measured and analyzed at least monthly. Determine not only where your leads are coming from, but track this through to where your new patients are coming from — their lead source. Measure your return on investment for each marketing channel/campaign to ensure you are doing more of what works, and less of what doesn’t.
- Targeted Marketing Initiatives: Make sure everything about your communication to prospective patients is specific to the demographic you want to attract most. Think about the patients you enjoy working with the most. Focus on why they chose you and how you uniquely help them attain their goals. Use this specific information in your content, messaging and marketing campaign. Also, be sure to market on the platform or medium they prefer and are most likely to utilize when seeking what you offer.
- Advertise in the Most Cost-Efficient Manner: For any paid advertising initiatives, test platforms and channels to find the most cost-effective options to reach your ideal patients. Monitor the cost per lead and conversion rates to optimize your advertising budget.
- Maximize Search Engine Optimization: Be sure to work with your webmaster to optimize your website content and blogs to include relevant keywords your patients use for their search. Use these keywords in your content marketing plan and be sure to address their primary concerns and questions.
- Create a Patient Referral and/or Ambassador Program: A patient referral or ambassador program is a great way to showcase the success of your patients and attract others who desire a similar outcome. Be sure to gather their testimonials so you can showcase them in many ways online and in your office, and encourage them to complete a five-star online review.
- Collaborate with Partner Businesses: Gaining exposure to the audiences of other practitioners who also serve patients with obesity is a great way to gain trust and attract new patients. When you collaborate through joint marketing efforts and cross-promotions, you can lower your client acquisition cost while increasing your reach.
Optimizing your patient acquisition cost is an ongoing process for any weight loss practice seeking sustainable growth and financial stability. Through systematic measurement, continual analysis of your metrics, and refining your strategies, you can work towards lowering your patient acquisition costs, while improving your overall patient experience.