Every clinic owner, regardless of the size of his / her practice, needs to review 3 basic metrics in order to get an intimate understanding of the success of the practice and an opportunity to find solutions for any problems that are discovered. Taking the time to determine the cost of acquiring new patients, as well as the potential long-term profit margin for specific patients groups, can help you fine-tune your pricing. It can also streamline operations and zero in on your most successful marketing avenues, culminating in increased profitability.
1. New Patients per Month: Suppose you are monitoring the number of new patients that enter your practice on a monthly basis. Your practice enjoys a 12-15% new patient a month / total existing patients seen in the practice each month. You monitor this metric and find that for three consecutive months your new patient to existing patient ratio falls below 10%. You look into your new patient numbers and you find that the new patients entering your practice from patients referred by existing satisfied patients are stable, but new patients from your website have sharply decreased. Knowing this one detail will mean you can make immediate improvements to your website conversions.
2. Cost per Acquisition: Marketing and advertising are integral expenses for medical cosmetic practices, and more media and marketing agencies than ever before are fighting for your budget. Most small businesses use a combination of guesswork, the amount of funds available and gut feeling to set their marketing budgets. However, understanding the lifetime value (LTV) of a patient and the cost to attract a new patient provides a more concrete view of the most and least successful marketing avenues. Customer acquisition costs (CAC) are calculated by dividing acquisition expenses by the total number of new patients.
3. Profit per Patient: Once you’ve determined the CAC, you need to know if that cost justifies the profit realised per patient. If one new patient costs £250 to acquire and they purchase £1200 in treatments and services at a profit of £400, you have identified a successful campaign. You spent £250 and made £400. Because medical aesthetic patients are often repeat visitors who come to your practice every three to six months for injectables, facials or IPL treatments, you also want to consider the LTV of new acquisitions when examining costs. In order to determine the LTV, you need to compute the gross profit margin expected to result from that customer over the lifetime of the relationship.