Back in 2003 we used to send out postcards to create web development leads. Or at least that’s what we thought the postcards would do. We were sending out about 30,000 postcards per month with the hope of attracting some new clients. From all the postcards sent over a 3 month time frame, we picked up one $60,000 web project — and we spent about $30,000 doing so. Was this campaign a success? I called it a complete failure and we killed the experiment. The one project we picked up was a great project for a great company but since it was the only sale from the campaign, I considered it a fluke and we moved on.
The same types of closed loop reporting is needed in your medical inbound marketing efforts. The beauty behind most web marketing campaigns is that they can be brainstormed, tested, analyzed, improved or cancelled all within a short life cycle. But this only happens when you have the right ROI calculations in place to quickly determine success.
So in inbound marketing, what calculations are used for ROI?
Unlike our postcard campaign where we could only measure inquiries and completed sales, inbound marketing allows for measuring many more data points along the marketing and sales cycle. For instance we can measure:
Social Media Activity
Building brand awareness and social influence doesn’t require a visit to your website. When your brand is mentioned or shared on social media, there is a resulting effect. Twitter, Facebook, G+, and other social sites allow for easy monitoring of activity that includes your brand. This is the first data point for calculating ROI when social media is integrated into your campaign.
There are many systems available for collecting and reporting on your social media activity. Even Google Analytics has made some significant improvements in this area last year. Below is an example from our own social tab in our Insights tool set. Regardless of which system you use, you will want to make sure the data is regularly available and being reported on.
Traffic to a website is probably the first data point anyone collects online. Some of us might remember the days of hit counters showing the number of visitors to a page. Those days are long gone ever since Google bought Urchin back in 2005. Now that quality web analytics is available to everyone, there is no excuse for not measuring traffic to your site.
Hit counters died because they gave almost no insight into what was really going on with a site and behavior of the visitors to the site. Knowing how many visitors viewed one page on your site is one thing. Tracking pageviews, time on site, traffic sources, visitor flows, unique visitors, return visitors, etc is of infinitely more value.
Website Conversions and Visitor Profiles
Website conversions are when an anonymous visitor converts into a sale or more commonly a visitor profile by providing some data about themselves. Visitor data is incredibly valuable and also very hard to place a value on. To help in placing a value on this data, we ask the question:
What is it worth to your business to find new people interested in your products and services who match an optimal buyer profile?
If you can’t answer this question, don’t feel bad because most businesses can’t. The answer is a learning curve and generally starts with a best guess which is refined over time and through experience. The value of these new patient leads also increases considerably if you have a high rate of patient retention. When putting values to conversions (patient leads) we always start with $100 per conversion at a minimum. If there isn’t at least $100 in value in having a new patient lead express interest in your services, you are going to have a difficult time justifying the cost of acquisition.
The insight you can gain from the data collected through website conversions and building visitor profiles is incredible. Imagine the value of knowing a patient lead interested in Botox has been spending a lot of time looking at your CO2 Laser Treatments. Would this be the right time to send them a special on CO2 Laser Treatments? Maybe it’s just the nudge they need. Now multiply that profile data across thousands of visitors to your site and you start to see the possibilities in building visitor profiles.
In our Insights tools we integrate social media data with the visitor profile data for our clients. If there is an opportunity to connect with patient leads through social media, we want our clients to know about it. When you see that a patient lead has a high Klout score, you can creatively find ways for them to share your promotions through social media thinking they are helping out their followers. In the end its a win for everyone.
So the patient lead has interacted with you on social media, they have been to your site and you’ve built a visitor profile around their interests. Now its time to nudge them through the buying cycle using email marketing and measuring their interactions via email. Are you losing prospective patients after the first consult? Maybe it’s time to look at the email drip campaign you have for following up after consultations. Are your Botox patients returning as regularly as you would like? Let email help. Getting patient leads through your door is often the role of email. Building lifelong patients is also the role of email. When measuring Inbound Marketing ROI it is important to include the value of email interactions and how much you have to gain from lifelong patients.
So what does the ROI calculation look like?
This is the complicated part and this is where experience really helps. It is very easy to undervalue leads and traffic. Do you remember when Google bought the 11 month old company YouTube for $1.65B back in 2006. YouTube made no money and was running on credit card debt. Google didn’t come up with the $1.65B figure by some earnings multiple — the value was completely in the visitors. Stories of Internet giants spending billions are great but the real world of clinic marketing is different. After all, you have bills to pay and converting leads into patients pays bills. I’ll give you a real world clinic example to help blend both worlds.
Of the 4 ROI data points, Social Media is still the hardest to define. And instead of overvaluing it, we would rather err on the side of undervaluing. And remember in our Social Media ROI calculation we are only dealing with social media mentions for your brand regardless if they turn into website traffic. Social Media mentions affect search engine rankings as well as driving direct traffic and helping to promote your brand online. Since I want to keep the calculations simple, we are going to rely on the freely available Klout score. Some might argue that Klout alone does not measure brand awareness on Social Media but we disagree. Your social media profiles should be built around your brand and therefor the more Klout your social media profiles have, the more your brand is being shared on social media. And Klout is a really easy measurement to use.
If you don’t know your current Klout score, you can head on over to klout.com and find out. While Klout scoring isn’t perfect, it is an easy way to measure influence across social media. And for this example, we are all about easy.
Above you can see the Klout score of 49 for our MDWebPro account. Now Klout score is a logarithmic scale so it is much easier to move from 20 to 30 in your Klout score than it is to move from 70 to 80. Keeping that in mind, we use this formula for calculating Social Media ROI using only a Klout score:
The formula I prefer when only using Klout score is: .04*(KloutScore^3)
In this formula we are basically applying $.04 of value to every power of 3 increment in Klout score. The table above shows how these values would play out as your Klout score increases. Basically a Klout of 10 would be worth $40/mo, a Klout of 30 is worth $1,080 per month, and so on. If the numbers above don’t “feel” right to you for your business, you can adjust the dollar value to make them match your gut feelings.
Now obviously this value is worthless outside of your comprehensive marketing strategy. If you are tweeting about Justin Bieber to grow your Klout score but never building a social media presence around who your actual buyers might be, then the numbers are worthless. These numbers only work when you are intentionally building your reputation and brand in social media with the intent to ultimately gain some new patients.
Website Traffic follows closely with social media in that if you are doing your job in publishing targeted content to your site around your products and services, targeted traffic will follow. But it is very easy to fudge your traffic numbers by taking advantage of traffic trends that don’t necessarily help you sell services. For traffic numbers we go straight to the source and use an average Google AdWords PPC value to purchase the same amount of traffic. However we do triple the number because once the system for generating traffic is in place, there is more of a perpetual effect than with AdWords where traffic stops when you don’t pay the bill.
Value of website traffic = PPC Value x 3
Conversions are much easier than Social Media because we can usually see the monetary results more clearly from website conversions. In the world of conversions we always start with $100 value for a marketing qualified lead and $150 value for a sales qualified lead. A marketing qualified lead fits your ideal patient demographic. A sales qualified lead fits your demographic and has expressed interest in your products or services.
Value of MQL = $100
Value of SQL = $150
We don’t assign any value to email open rates because today it is very difficult to get accurate numbers in this area. We also don’t apply any value to all those email recipients on your list that see your email but don’t click through to your site. We know there is value left on the table here but we have not yet come up with a consistent method for measuring these effectively. Instead with Email Interactions we plug the click through numbers right back into our traffic numbers to finalize our ROI calculation.
The big takeaway from all these ROI calculations is to have a system in place to make this data readily available. We include ROI numbers based on all of the above data points in the dashboard view of our Insights software as seen below.
Whether you subscribe to a tool or manually enter the values into Excel, you can’t improve on what you can’t measure and as we have found, it is a great feeling to know for sure how your inbound marketing is performing through well defined ROI calculations.