To get the most out of your advertising efforts, it’s important to stay on top of how your advertising and marketing campaigns are performing. You can do this by keeping track of the results whose numbers will provide key information regarding what’s working and what’s not, and help you make decisions to get the most out of your investment. To track information and determine the effectiveness of your advertising, follow these steps:
- Create your advertising plan;
- Capture key information using a database;
- Analyze the information collected;
- Modify your advertisements by making improvements to get optimal results.
This will provide you with a foundation for measuring your ad performance and help you produce advertising that delivers the best results for your money.
ADVERTISING IN THE BEGINNING
All advertising efforts begin with a plan. When structuring an advertising program, make sure you have clear, specific, and measurable goals. For example, the goal of a postcard you plan to mail out to gain new patients should be to “increase new patient leads by 20% in 6 months,” or the goal of a print ad announcing a limited-time promotion in your practice should be to “increase sales of high-end hearing aids by $100,000 more than last year.” Create a timeline for each goal, and include benchmarks to check on the progress of meeting your goal. If you plan on running a magazine or newspaper ad over the course of a year, you may consider including weekly or monthly checkpoints to make sure efforts are on track.
But whether you plan to advertise via direct mail, or in newspapers, magazines, the Internet, radio, or even television, do your research first and get key statistics, like how many people will see your ad and their demographics—information on who these people are. This can help you determine whether your message will be the people with the most potential to become a lead, and eventually a sale for your practice.
THE RESULTS ARE IN
Next, you need to determine what information you want to track. One of the key items you’ll want to monitor is the number of people who respond to your advertisement by doing something. This is known as the response rate. If your advertising uses a call-to-action component, this generates a trackable response. For example, if the action you want them to perform is to return a business reply card attached to your postcard, you should receive these cards back in the mail. If it’s to call a phone number the reader sees in your print ad, you can ask phone callers, “How did you hear about us?” And if it’s to find out the open and click rates of an e-mail you sent out, you should be able to view an online report from the company handling your e-mail distribution.
Once you launch your advertising, you should be able to capture the information about how well it is performing. Some critical information you’ll want to track include:
- The number of inquiries or leads the advertisement generates;
- The number of inquiries or leads that led to a scheduled appointment;
- The number of referrals received that led to a scheduled appointment;
- The number of leads or referrals that converted into sales;
- The dollar amount of technology purchased per appointment.
Create a database to collect your newfound information. The database can be as simple as a spreadsheet or as detailed as a customized software program. Make sure the information is organized in a way that makes sense to you. Remember to use labels to manage the incoming information, and headers to categorize different reports.
Now that you’ve collected the information, it’s time to analyze the initial results to see the effectiveness of your advertising. There’s plenty of valuable information you can learn by doing a few simple calculations. To determine cost per sale for your advertising effort, divide the amount spent on your ad by the number of sales that can be tied back to that ad. To calculate the cost per lead, divide the same amount spent by the number of leads for the same time period. If you run multiple ads, make a separate calculation for each ad to determine which produced the most leads or sales, and at what cost.
Another way to find out the effectiveness of your advertising is by calculating a break-even analysis. Determine the break-even point for your ad—where total revenue equals total cost. Knowing the break-even point can help you evaluate the status of the ad and its profitability. When the ad’s total revenue surpasses total cost, the ad is bringing in a profit. If cost surpasses revenue, it’s operating at a loss.
To determine your return on investment (ROI) percentage for your advertising efforts, use this formula:
Subtract the cost of the ad from the revenue that resulted from the ad, and divide that amount by the same number you plugged in for the cost of the ad to determine the ROI percentage. The higher the percentage, the better the return. To compare the effectiveness of different ads, determine the ROI for each to see which ad is bringing in the highest return. The ad that delivers the best results for your money is the one you’ll want to focus on. With these calculations, you can measure your advertising’s effectiveness and determine whether you are spending your money wisely.
By simply analyzing your results, you may discover ways for your practice to become more productive. For example, you may find you have a number of patients who had an appointment, received a hearing aid recommendation, but did not purchase. There may be hidden objections that you can address with the patient. If the objection is to cost, there may be a tipping point where the cost of hearing aids becomes too much. You can find ways to encourage these patients to take care of their hearing health and make it easier for them to overcome cost concerns by offering them a special promotion, or providing patient financing options. The numbers do not lie—by reviewing the information in your database, it can help you discover more ways to improve your business operations.
MONITOR THE SITUATION
Advertising can be a series of trials and errors. That’s why it is important to review the information in your database on a regular basis and look for trends. And by building flexibility into your ads, you can tune and tailor them by changing one component at a time and evaluating changes in performance.
For example, if you’re sending out an e-mail and see that your mailing list isn’t bringing as many leads as you expected, you can do a test to find out which component of your ad needs to be changed. It could be the subject line of the e-mail, the image used, the offer, or even the mailing list itself. To challenge the effectiveness of the subject line, change the original subject line (keeping the rest of the e-mail the same), rerun the e-mail, and evaluate the results. With the low cost of e-mail, it’s even possible to consider dividing your mailing list into groups of equal number and running a different test (where one aspect of the e-mail is changed) for each group simultaneously. To test the effectiveness of your print ad, start by changing one aspect at a time, such as selecting a different newspaper publication to run the ad, increasing or decreasing the frequency the ad appears (eg, daily, weekly, or monthly), changing the promotional offer (eg, “Free Hearing Exam” versus “No Interest Financing Available”), or even changing the size of the ad. By testing your ads this way, you can see which version brings you the best results.
Consistently measuring your advertising can be a challenge. But over time, you will be able to appreciate the value these numbers hold. And with a little practice, you will have the tools in place to be able to maximize the effectiveness of your advertising and make your efforts a wise investment for your practice.
Contributor: Paul Findly is director of marketing for audiology at CareCredit, Costa Mesa, Calif. CareCredit is a flexible patient/client payment program specifically designed for health care expenses.
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