Explaining attrition in your lead-funnel and the need for realistic budgets
One of the key questions we often hear when dentists enquire about our pay-per-click marketing services is how much to budget for the click costs paid to Google or Facebook. This is a great question and one which needs to be investigated and understood if a PPC campaign is to get the required traction and yield results.
The actual budget required is frequently under-estimated, often by a long way. For example, recently I spoke with a potential client about setting up an running dental pay-per-click campaigns only to be advised that his budget was £50/month for click costs. As I’ll demonstrate below, this is highly unlikely to get you the meaningful traffic and patient enquiries that you need.
Before moving on, it’s worth noting that we have no vested interest in recommending budget levels for Google and Facebook ad campaigns – this is the money you pay directly to those networks and not to us. However, as we’ve noted before in this blog, please watch out for PPC management services which pay the monthly click costs out of a total fee you pay to them. This is prone to skimming i.e. the agency always maintains their profit margin and reduces the click fee paid to the networks, irrespective of performance. So if you are using PPC, please make sure you pay click costs direct and then you’ll have full transparency.
Attrition – impressions, clicks, enquiries and treatments
Understanding the full chain of events whereby a potential new patient sees your ad and (hopefully) ends up on your treatment chair is important. This is because at each stage of the process there is a significant level of attrition i.e. drop-away. So unfortunately every click won’t result in an enquiry and for those that do, there is another level of attrition before treatment is confirmed. But what are the levels of attrition at each stage and how does this reflect back into the budget you need to allocate? Let’s do so simple sums.
For the purposes of this explanation, the first area to look at is the number of times your ad is shown (on Facebook or Google) compared to the number of times it is clicked, i.e. the user actually goes to your website or landing page. The very best campaigns will have click-through rates (CTR) of 20% or more but it’s not uncommon to see DIY campaigns with CTR below 2%. The average for the dental sector is around 3% – so only 3% of those who see your ad actually click if we are looking at averages. Fortunately, most campaigns are run whereby you only pay when someone clicks your ad, so from a cost perspective, a low CTR is not going to drain your budget. However, unless you click bids are high enough to ensure your ads are prominent, you aren’t going to get the traffic you need anyway.
Now let’s assume that you actually get 3 visits to your landing page for every 100 times your ads are shown. We now also have to consider the conversion rate for these visitors i.e. the ratio of visits to actual enquiries. This typically averages around 4%. We do have high-performing landing pages where the ratio is double this or more, but for illustration purposes, it is sensible to use averages. So in this scenario and working backwards, you need around 1000 ad impressions to generate 30 page visits and 1 enquiry.
Now we also need to look at the number of enquiries which result in treatments. Our data from the close work we do with our dental clients, suggests that the best practices can convert approximately 30% of their enquiries, whereas those with less sophisticated approaches convert less than half of this. For illustration purposes, let’s use 20% as the average enquiry to treatment conversion ratio.