Is your dental marketing paying back?

A quick calculation to help validate your marketing spend.

Whilst many dentists are very close to the “numbers” for their business, perhaps surprisingly, lots aren’t. Maybe this is due to focusing on clinical aspects, lack of experience or simply coming out of dental school with limited training in business skills. This has become increasingly apparent over the last few years when I’ve been discussing the cost/benefit of marketing for dentists looking to increase new patient acquisition at their practice.

Often the dentist would comment that the monthly fee, let’s say £350 for SEO for illustration purposes, seemed excessive and could not really be justified from their budget. However, when we proceeded to dig into the cost/benefit a little further, it would become clear that they had limited idea on how to calculate the return-on-investment for that spend and consequently the opportunity being missed from failing to proceed. The overriding factor appears to be that people see the ‘£350’ as an absolute fee and dismiss it, but without factoring it against the value of the new patients it delivers.

Additionally, there is still a tendency for some to believe that online marketing is ‘easy and quick’ and perhaps limited appreciation of the hours of work and experience which are brought to bear to achieve success. In reality, bespoke marketing campaigns take time and diligent application to deliver results.

So how do you calculate the return-on-investment for your marketing budget?

Let’s start by saying that the following illustration is quite simple and will vary from business to business. However, it will allow you to see if your dental marketing spend is working effectively.

First off, let’s be clear that we need to talk in “profit” terms – not revenue terms. Some dental marketing companies make a big play of how they provided an additional £50k of revenue to a client over ‘x’ number of years and use this in their pay-back calculations. Of course this is fundamentally flawed – whilst we all like to track the revenue generated by our respective businesses, it is of course the profit which is critical and dictates whether we are successful or not. So if you spend £10k on marketing each year to generate £50k of revenue, is it actually worth it? You only really know when you look at your profit margin.

A rule-of-thumb illustration

I reiterate that these numbers will vary, possible quite considerably, from practice to practice, but if you follow the same principle you will get a reasonably clear idea if your marketing spend is working.

Consider that the average dental patient in the UK delivers around £200 of revenue per year – some will be a less depending on the patient mix, some will be a lot more (particularly for those dealing with more lucrative treatments), but on average, that’s not far off. Practices tend to operate at a net profit margin of anything between 15% and 30% so for illustration purposes, let’s take 22% as a reasonable average. So each patient is delivering around £40 to £45 of profit per year in this example. We also need to consider how long that patient will be with the practice and continue to deliver this profit – a concept known as “lifetime value”. Purely for this illustration, let’s use a very conservative 3 years.

Now let’s say that the practice is spending £350 per month on web marketing which delivers 10 new patients to the practice – a cost per acquisition of £35. Here we can see that the marketing spend per patient is easily covered within year one and that based on a lifetime value of 3 years, the return-on-investment outstrips the initial acquisition cost several fold. Of course many patients stay with the same practice for much longer than 3 years and the initial cost of acquiring them becomes a much smaller proportion of the profit they contribute over their time with you. Even if your initial acquisition cost is pushing up towards £100, chances are that this will still pay back handsomely.

In reality most web marketing campaigns have excellent return on investment and well in excess of the break even point. However, it’s easy enough to get a good idea of the potential by plugging your own financial figures into the simple calculation above. Whilst it doesn’t take into account net value of funds, it’s a very good “rule of thumb” to follow.

This does not take into account all of the peripheral benefits delivered from having a solid and growing patient list – additional word-of-mouth referrals, treatment up-sell opportunities etc.


When considering marketing spend, please do not treat the monthly fee quoted in isolation as a big, scary number. It is very important to factor in the new patient delivery and how this looks in terms of return-on-investment.

If you would like more information and a discussion around the true potential of web marketing campaigns for dentists, please call the Dental Media team on 01332 672548 or complete the contact form.