How to Measure Marketing ROI in Your Weight Loss Practice
— By Karol Clark, MSN, RN
Does it ever seem as if you are spending a fortune on marketing costs, yet you don’t feel as if you are getting the results you desire? Measuring the performance of your marketing campaign can provide necessary insights for smart decision-making.
Return on investment (ROI) is the measure of profitability for an investment. When it comes to marketing, it is the profitability (or other specific goal attainment) resulting from the money you spend on your marketing and advertising efforts. Your calculated ROI is commonly used to provide financial accountability and guide your current and future marketing budget allocations.
Unfortunately, attaining an accurate ROI can be complicated due to the many touchpoints that usually occur before a new prospect becomes a paying patient — especially when it comes to weight loss. A few of these various touchpoints may include pay-per-click advertising, a search engine optimized (SEO) blog or video, Facebook campaign, Instagram post or reel, mention by an established patient, discussion with a PCP, webinar, and any other contact in between that created awareness of you and the services and products you offer.
Such paid and non-paid touch points can make it difficult to discern exactly what marketing effort was the deciding factor that motivated your new patient to reach out to you and your practice. This is why it is recommended to verbally ask your new patient how they found you and document/track their responses. Obtaining their identified referral source is a great validation of any online and offline statistics you may obtain. No matter what, data is critical to ROI measurement. And, this cross-check validation can make a big difference as you evaluate and modify your marketing strategies.
What is considered a good marketing ROI?
When it comes to your marketing ROI, you want to make as high of a return as you can for every dollar spent on marketing. Although statistical sources can vary, in general, you want to strive for at least a 3:1 ROI with a 5:1 or higher ROI preferred. And while there are variations, the standard return on investment calculation is below:
For example, if your marketing campaign cost you $1,000 and resulted in $4,000 of generated revenue, your ROI would be 3:1 [($4,000 – $1,000) / $1,000 = 3]. Thus, you brought in three times more money than what you spent.
Steps to Effectively Measuring Your Marketing ROI
It may sound simple enough, but there are some critical steps to ensure accuracy while maximizing the marketing ROI in your weight loss practice. These detailed steps are outlined below:
- Establish Specific Goals: Before you begin efforts on an advertisement spend, it is important to identify your primary campaign goal. This can vary over time such as increasing brand awareness, generating qualified leads, boosting engagement, increasing revenue, increasing website traffic and more. Most commonly, the goal for weight loss practitioners is generating qualified leads and increasing revenue. It is hard to hit a missing target so be sure to be specific. For example, obtain 60 new qualified leads over the next 60 days with a 5:1 ROI.
- Determine Costs: In order to measure your ROI, you need to know how much money you have invested in your marketing campaign. Such expenses may include the cost of advertising, contracted services, social media posting, e-mail marketing, or any other marketing strategy you choose to utilize.
- Set-Up Tracking Methods: If you are working with an advertising agency, you will no doubt receive reports that monitor the performance of your marketing campaign(s). Even so, if your goal is additional revenue or new qualified leads, you will want to ensure the numbers reflect this data as well and are validated internally. It is important to maximize the use of data from your Google Analytics for your website as well as any tracking tools within advertising campaigns such as Facebook. The more direct the tracking method showing where the new lead came from and their journey to your door, the better. It is not enough to just track the data, analysis is critical to improve performance and maximize your ROI.
- Measure New Leads Generated: Record how many new leads (as well as qualified leads) were generated as a direct result of your marketing campaign. You can track this through dedicated landing pages, phone numbers and/or opt-in forms. Additionally, it is not enough to attain a qualified lead, it is your team sincerely nurturing them and confidently converting them to a paying patient that results in revenue goal attainment.
- Determine Your Conversion Rate: Conversion rates are critical to understand because they are usually a direct result of your team efforts with regards to consistently following up, building trust and guiding qualified leads every step of the way. Determine how many of your new leads actually converted into paying customers (i.e. weight loss surgery or new medical weight loss patient). This is the ultimate proof of a successful campaign.
- Identify Average Revenue/New Patient: Identifying the average revenue per new patient will also help qualify your actual ROI. When a new lead becomes a patient, what is the average revenue you typically see (i.e. average surgical reimbursement or medical weight loss program revenue)?
- Calculate Your ROI: Utilize the calculation above and if calculating for revenue per new lead, insert the average new patient revenue. Thus, subtract the cost of your marketing campaign from the revenue generated for each new patient times the number of new patients attained, then divide the result by the cost of your marketing campaign. For example, 60 patients x $1,000 (average revenue) would be $60,000 – cost of marketing campaign (let’s say $10,000), divided by $10,000 = 5 or a ROI of 5:1 In summary, you earned five times what you spend in marketing costs.
- Complete Analysis & Identify Adjustments: Analyze the effectiveness of your marketing campaign. If you have a positive ROI, make any efficiency tweaks and continue to implement and monitor. If your ROI is negative, you need to adjust your strategy to improve your results.
As an added step, you can reverse engineer your results (paid or non-paid) to create key performance indicators (KPIs) for your team. For example, if for every 100 leads you receive, 50 of them become a patient and you want 100 new patients, you know you will need 200 leads since your conversion rate is 50 percent. You can also enhance your results by working on increasing your conversion rate.
If you are spending money on marketing, it is imperative that you are able to not only gather this important data, but analyze and implement prioritized measures to maximize your return on investment. The steps outlined above are a great way to make this happen in your weight loss practice.