Customer Acquisition Cost: The Hidden ROI

As published in the January 2023 issue of Ophthalmology Business Minute. To subscribe, visit their website.

We’re back with another perspective shift! In ophthalmology, it can be difficult to find resources on this subject, so we are excited to tackle this one with you today. 

Let’s talk about customer (patient) acquisition cost: the amount of money your practice spends to get a new patient. If you’re like most of the practices we work with, your number one goal is patient acquisition: you need more patients! Analyzing your patient acquisition cost is one of the most important measurements to determine how efficient your marketing efforts are, where you can optimize your patient journey structure, how to budget for expansion, and strategically map out a growth plan to achieve your goals. 

How do you measure your patient acquisition cost? The overall cost is easy to calculate. The problem is, most practices lack the granular data to analyze the breakdown of acquisition costs – and even if they do, they are missing key hidden measures of ROI that have a massive impact on growth and patient acquisition. Traditionally, you would be measuring the sum of all costs that bring new patients into your practice: Advertising, SEO, Social Media, Patient Success Strategies, Promotions & Giveaways, Content Marketing, Events, Marketing Technology (CRM), Website Maintenance and Landing Pages, Marketing/Sales Staff Labor, etc. and divide this by the number of patients acquired during this time period. 

Where is the hidden ROI? What is essential for an ophthalmology practice to further identify is the breakdown of channels, campaigns, patient types, staffing efficiencies, satisfaction ratings, and ‘second-hand’ ROI to effectively optimize their investments. Knowing your overall patient acquisition cost is important, but also your individual source/channel/process cost and results are where you can really improve your ROI and the number of new patients coming into your practice. 

Consider patient value. For example, if you’re spending $10,000 total per month on Google SEM advertising with $5,000 that targets general patients and $5,000 that targets LASIK, your patient acquisition cost is probably a lot lower for general patients than LASIK; however, your LASIK patient value is vastly higher, so this is a large factor in optimizing your spend for maximum ROI. 

Don’t forget about ‘second-hand’ value. Other hidden factors include aspects such as the patient conversion journey, patient satisfaction, and quality of care. If your staffing costs for ‘sales’ professionals, such as patient counselors, are low but the quality of care or conversion rate is also low (or even ‘standard’) due to inefficiencies, lack of training, or understaffing, you will lose untold amounts of revenue in conversions, passionate patient advocates, and word-of-mouth. 

If your social media profiles and organic content are neglected or amateur because you’re lacking a trained staff member to manage this vital aspect of your practice, it affects your brand, your online community, and your online reputation – which counteracts the marketing costs you are already spending. Increasing your spending on training and staffing may bring this aspect of patient acquisition cost up initially, but will produce substantial long-term results. Your ‘second-hand’ ROI here creates an online community of advocates, validating your brand to potential patients from other channels of marketing, and works them ‘down the funnel’ to acquisition over time. 

Evaluating and optimizing your ROI and patient acquisition cost is essential for growth. To successfully use patient acquisition cost to improve your ROI and increase the number of new patients in your practice, you must consider the following:

• Total Cost per New Patient

• Cost per Patient Type, Value of Patient

• Cost per Investment/Spend by Lead and Patient

• Cost per Campaign/Initiative/Ad by Lead and Patient

• ‘Second-Hand’ ROI (how does this investment affect patient satisfaction, loyalty, brand awareness, build trust, and foster interest down the consideration funnel?)

Investing in your brand, awareness, market share, lead generation, conversion pipelines, patient journey, satisfaction, outcomes, staff, culture, and training all contribute to the bottom-line growth of your practice. We must be willing to spend, but also be prepared and committed to accurately measure our results to achieve and exceed our practice goals.

Christine Scarlett & Lauren Weaver

Co-Founders, The Patient Whisperers & upSKILLery