Return on Investment for Dental Internet Marketing
Here's an analysis we did in January, 2013, based on our fees and a conservative estimate of the value of the patients attracted by a website, using our VIP. package.
First Year Costs
Assuming the client selects our most expensive design, which would be a custom design from scratch, and totally creating new content from scratch, the up-front cost would be $7495. The first year SEO and maintenance would be $625 per month, which would start at the fourth month, so that would run $5625 for those nine months. That totals $13,120 in expenses for the first year.
First Year Returns
Let's estimate that for the first three months the website brings in no patients at all. For the second three months, let's estimate an average of 4 new patients per month. For the next three months, let's estimate 7 per month, and for the final three months of the year, 11 per month. These are typical numbers that we see. That would be 66 new patients for the first year. Let's take a conservative value of those patients of $1300 production value per patient. That computes to an added production value to the practice of $85,800.
Dividing the return by the investment, that gives us a return on investment for the first year of 6.54:1, which isn't that great a return. A good rule of thumb for marketing expenses would be that you would want a 10:1 ROI. At least an 8:1 ROI as a minimum. So we're well below par for the first year.
Second Year Costs
The math for the second year is very different, because the costs of designing and building the website are behind us. So the ongoing cost for this VIP website is $625 per month. That works out to be $7500 for the year.
Second Year Returns
The second year returns are also very different. We have been building a reputation in Google for a year, so the rankings are better. We have established links around the Internet, and these continue to increase, drawing in more and more traffic. The website has been tuned and tweaked to perform better. Let's take a conservative estimate of 15 new patients per month over that second year, or 180 new patients for the year. At our figure of $1300 per patient, that works out to be $234,000 in production value for the practice.
Dividing the return by the investment, we come out with an ROI of 31.2:1 for the second year.
Understanding this will help you have realistic expectations for your website performance. A lot of the work is done up front - planning the marketing strategy, building the website, writing the content. And the returns start as a trickle. It can feel like you're pouring money down a black hole. This is the nature of what we call "organic" search engine optimization, or attempting to get patients through natural search results. But all this time, your reputation is building. You're investing in a relationship with the search engines.
The results start to pay off in the second year.
And, we might add, the third year is generally even better. Websites maintained by Infinity Dental Web will improve year after year. Our business strategy is to develop excellent long-term relationships with loyal clients, and our goal is to make sure that every year is better than the year before. So with that VIP website, we would expect to attract at least 20 new patients per month that second year, maybe as many as 30, and continuing to increase to 40 or more. We have clients who have been with us for several years who are getting well over 100 calls per month from their websites.
Possible Variations from These Results
We need to point out that the most predictable variations from these numbers will be with practices that are seeking to attract a more exclusive clientele. The higher the dollar value of the patient that is sought, the lower the conversion rate. Rather than getting one patient for every 40 or 50 unique visitors, you may be getting one out of every 100 or 200, depending on how exclusive you are. But the compensating factor will be that the value of each of those patients will be higher. In some of those cases, the value of each patient will be in the five-figure range. So these numbers will vary. But the principles remain the same.