ROI: Get the Most Out of Your Advertising
Follow these six steps to put together a successful advertising campaign.
BY GARY GERBER, O.D., Franklin Lakes, N.J.
What do a great dinner and a successful ad campaign have in common? Here's a hint: Ask the chef who prepared your meal how much time and thought he put into the preparation. Then ask yourself how long it took to eat the meal.
The chef will answer that the preparation began when he first dreamed of becoming a chef 18 years ago. Then, after graduating from a culinary institute and working in several restaurants as an apprentice, he finally got his big break. He created the particular meal you ate about four years ago and he has refined it 11 times until it reached its current state of perfection. So the meal's creation took years, the actual cooking took two hours and the eating took all of 12 minutes.
The corporate campaign
Next, talk to a corporate executive about a successful ad campaign that's running in multiple markets on multiple media. The corporate executive dreamed up the idea for the ad's theme in a middle management meeting four years ago.
After multiple rounds of consumer focus group testing around the country, the executive honed down the concept so it would deliver a distinct, credible and focused message. Multiple pitches from several agencies took another six months. Once the executive chose the agency and they produced the first iteration, the company executives tested it and presented their results back to the agency. After some editing and copy changes, the corporate lawyers had to put their stamp of approval on the message. That took another two months of debate and discussion. Finally, the 30-second commercial aired on the Super Bowl -- and was a smashing success.
Preparation is the key
Now the answer to my question is: Preparation (meticulous, measured, intellectual and experienced). In this article, we'll discuss how to maximize your return on investment (ROI) for your advertising. And, as illustrated above, the single most important way to do that is through painstakingly careful preparation. Following are six steps you should take to prepare your ad for a maximum ROI.
Determine your focus
Sure, in the end you're probably advertising so you can acquire more patients or sell more glasses or contact lenses, but sometimes getting to that end point requires a few intermediate steps. Perhaps the first step is to build a relationship with prospective patients so they feel comfortable enough to actually call you. Or maybe the first step is to tell patients to "contact our office for more information" about whatever it is you're selling.
The point here is to proceed with caution and to not sell all you have to offer (personalized service, high technology, convenient hours, large selection of eyeglasses, newest contact lenses available) in one message. Instead, choose one goal and drive the prospect in that direction.
David Ogilvy, considered the father of modern advertising by many, says, "The most important word in the vocabulary of advertising is 'test'. If you pre-test your product with consumers and you pre-test your advertising, then you will do well in the marketplace."
For example, let's say you can't decide whether you should offer $30 or $50 off the purchase of a pair of sunglasses. Rather than simply aborting the project, test each offer with a small sample of patients. Then use the most successful option for the rest of the population of prospects.
Pay attention to the details
There is more of a science to marketing then most doctors realize. You need to scrutinize your ads from every conceivable angle and dimension. You also need to carefully investigate the "how and when" aspects beyond the actual message you're trying to convey. Everything from font style and size to paper stock and time of delivery can impact the ROI of your message. Sending out a "Back to School" message in February or advertising a $2,100 eyeglass frame on newspaper-quality paper stock are two extreme examples of not paying attention to the details of your ads.
Set your expectations
Before you launch your ad, come up with a predetermined, measurable set of metrics that will allow you to say, "This ad was successful -- or not." Armed with this barometer, you can answer the inevitable question of, "Should we continue this ad?" If the ad is successful, then the answer is generally to keep running it until it stops working. But you must know in advance how you'll define that "it's working." In the client practices in which we consult, this step is probably the most overlooked.
As part of our work with clients, we ask them to present us with all of the advertising they've done in their practices. Most doctors can readily produce stacks of coupons as well as newspaper and yellow pages ads. When we ask how much they paid for each of these, they can usually produce these data as well. However, when we ask to see the response rate for each piece and how much revenue each generated (ROI), most doctors stumble.
An easy way to determine the goal for your ad campaign is to first calculate what we refer to as the RVP, or residual value of a patient. Consider the following example:
Ad costs for one exposure = $300
Response to ad = 1 patient
Patient spends = $299
Was this ad successful? At first blush, the answer would be "no." Strengthening that argument is the consideration that the doctor didn't consider overhead costs in the $299 that the patient spent. If two-thirds of $299 went to overhead, then the practice would appear to have lost about $200 on this unproductive marketing effort. But this analysis consists of two other important dimensions that doctors often overlook:
1. What's the proclivity of this patient to refer in another new patient? (Again, it's something you should already measure in your practice. In this case, use the historical likelihood of the referral pattern of similar patients.)
2. How long will this patient remain with your practice and during that time, how much additional money will he spend?
These two values define your practice's RVP. So in our example, if the RVP was $2,700 over an eight-year period and your typical net per patient was 30%, then our $300 marketing investment would have yielded a return of $900 over eight years.
So once you've determined your current baseline RVP, you're ready to set concrete goals for your ad campaign. For example: "We'll consider this project a success if we see 14 new patients over the next 15 weeks."
Make it measurable
Once you've defined the goal of your advertisement, make sure you can measure the response to the ad. Most ads will have some sort of "call to action." Typically, this is a phrase or graphic message that pushes the prospect to take the next step. The next step might be to visit your Web site, to call for more information or to fill out a business reply card (BRC).
When possible, it's a good idea to try and not mix media. For example, if you're contacting prospects via e-mail, then the measurable response should occur on the Internet (i.e., "Click here to learn more" as opposed to "Call us for more information"). Similarly, a newspaper advertisement might do better with an attached BRC than with the phrase, "Visit us at www.dreyesonline.com."
Launch and repeat
Armed with a carefully well-thought-out advertisement that's measurable and has predetermined goals for success, you're now ready to pull the marketing trigger. As the advertisement progresses and you measure the response rate and revenue that it generates, you should start planning for phase two of your ad. Phase two has two branches:
1. If the advertisement is successful, as defined above, then repeat it. If you learn something from the ad that you think can make the ROI even better, then it's acceptable to change it (provided it once again goes through the same steps as above -- namely careful creation, ability to measure and pre-determined goals).
2. If the ad doesn't succeed, then should you abandon it and start from scratch or modify it and continue? Perhaps the message you chose ("affordable fees") was in the wrong medium (The Robb Report). Hopefully, you'll have gone through this exercise before you launched the ad. It helps a lot if before you launch the ad, you conceptualize the completion of the following sentence: "This advertisement was unsuccessful because _______." If your ad was unsuccessful for a different reason or for reasons unknown, then it's probably not a good idea to continue it.
Don't mess with success
Don't concern yourself about running a successful advertising campaign over and over again. It may become stale and boring to you, but if you've found one that works well, don't abandon it until it stops performing for you. No one will criticize you for running a successful advertising campaign because you ran it too long.
Dr. Gerber is the
president of the Power Practice, a company specializing in making optometrists more profitable. Learn more at
www.powerpractice.com or call Dr. Gerber at (800) 867-9303.
Optometric Management, Issue: April 2005