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4 Steps to Evaluate Metrics by Dr. David Wank

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Categories: Marketing;
4 Steps to Evaluate Metrics 

Discover how to track your marketing campaign’s true impact by focusing on key KPIs and ROI

by Dr. David Wank

A word about data: Vanity metrics vs. actionable metrics
In this article, we will review the key performance indicators (KPIs) you need to work with to determine the return on investment (ROI) of a marketing campaign. There are dozens of data points you can look at to measure your marketing efforts, but KPIs provide the most actionable insights.

When it comes to marketing data, vanity metrics look impressive but don’t help you make decisions, while actionable metrics guide real improvements. For example, if your website has 1,000 visitors but only 50 are local, the larger number is just a vanity metric. More useful is knowing how many actually fill out your contact form and—even better—how many become new patients, since these KPIs provide meaningful insights into your campaign’s effectiveness. (Fig. 1)
4 Steps to Evaluate Metrics
Fig. 1
Step 1: Explicitly define and quantify success
Before launching a marketing campaign, define how you’ll measure results to assess success. Two key metrics for dental practices are the number of new patients gained and the production value from those patients. Goals may differ; some may prioritize volume, while others focus on higher value per patient. To set your targets, consider how many new patients you want from the campaign, and the revenue per patient you expect. Use the following sentence to clarify your objectives.

“In this marketing campaign I want to generate ___ new patients, and I estimate that each new patient will generate $ ___ in revenue. My total estimated revenue goal is $ ___ (new patients X revenue).”

Whether you run the campaign yourself or work with a marketing partner, everyone involved needs to agree on the goal for the campaign (i.e., 20 new patients) and how to measure success (call tracking and recordings, reports from the practice, etc.).

In the following two sections, we will discuss how to determine the cost of acquiring a new patient and the average revenue we generate from a new patient. If you don’t have access to the necessary new patient data, you can keep reading.

Step 2: What does it cost to acquire a new patient?
Before starting your campaign, decide the maximum amount you’re willing to spend to acquire a new patient: the cost per acquisition (CPA). For high-value cases such as cosmetic or implant treatment plans, a higher CPA may be acceptable, while for offers such as new patient or emergency special offers, it should be kept much lower.

Calculating CPA for a new patient
The first way to help calculate an acceptable CPA is to look at the number of new patients you’ve brought into the practice in the last year (or the previous six months) and divide that number by the total revenue for the group. This calculation will give you the average production you generate per new patient (you can be even more accurate if you use the total of your net production instead of the gross revenue). Thus, if you know that your average gross production per new patient is $3,000 over the last year, you can probably comfortably spend $100-$200 to acquire a new patient.

You can calculate a more accurate CPA by using the lifetime value of a new patient (LTV). To get this number, look at the new patients who first came into the practice seven years ago (you can select a data range that works for you) and calculate a) how much lifetime revenue you’ve generated from the patient and b) how long the patients tend to stay in the practice. With this information in mind, you might find, for example, that for patients who came into the practice in 2018, the average first-year revenue for them is $3,000, and then after that it’s $500/year across the remaining six years until today. This total comes to $3,000 + ($500 x 6) = $3,000 + $3,000 = $6,000 as your average LTV for a new patient, with an average production of ($6,000/7 = $857) per year for this group of new patients. With this information in mind, you might be willing to spend a CPA of $100-$200 to acquire a new patient because you can be confident—based on real data—that you’ll generate $6,000 in income over time from the investment.

Step 3: ROI, projected revenue and campaign costs
Now that we know how much production we want to generate from the campaign, we need to determine the campaign’s cost and whether it supports the expected results. This calculation is known as the return on investment, or ROI, and in its simplest form, it tells us the profitability of an investment or marketing campaign: ROI = (net return/cost of investment) * 100.

Example: Let’s say we ran a Google Ads campaign that cost us $10,000 and brought in $15,000 gross revenue (we spent $10k to generate $15k, for a net profit of $5k). The calculation is:

ROI = ($15,000/$10,000) * 1,000 = 50%.

Let’s return to our Step 1 statement and add our new data to it:

In this marketing campaign, I aim to acquire ___ new patients, and I estimate that each new patient will generate $_____ in revenue. My total estimated revenue goal is $_____ (new patients x revenue).

The campaign will cost $____ and the average cost per acquisition per new patient will be $_____ (campaign cost/new patients).

The ROI for the campaign will be _____ %.

In summary, before launching any marketing campaign, estimate your target number of new patients, expected revenue and cost per acquisition to ensure it aligns with your goals.

Step 4: Other ways of measuring campaign success
We already discussed that the best way to determine the success of a marketing campaign is to measure the ROI, a figure derived from the revenue generated by the campaign and the associated costs, along with the number of new patients we add to the practice through our efforts. But what if we don’t have those numbers? If we don’t know how many new patients we’ve generated from a marketing campaign, we can look at the next best thing. That is, what steps must someone take to become a new patient, and how can we measure this behavior?

Precursor actions
There are several main ways for someone online to become a new patient: calling from your website, submitting a contact or appointment form or calling from your Google Business Profile. If you can’t track actual new patients, measuring these precursor actions gives you valuable insight into campaign effectiveness (Fig. 2).
4 Steps to Evaluate Metrics
Fig. 2
One simple way to gauge your campaign’s performance is to monitor changes in calls, contact requests and appointment inquiries over time.

Key events and GA4
To track these interactions, you can use the freely available software, Google Analytics 4 (GA4). GA4 should already be installed on your website, and you should ask your marketing company for access to your GA4 data if you don’t have it already. (In my opinion, you should always own your own GA4 account and have full administrator access.)

The goal is to set up each of these actions as key events in GA4 (formerly conversions) so you can track the numbers over time. While the technical setup of key events in GA4 is beyond the scope of this article, you want the following key events added (if you are the DIY-type, click here to view a video that will walk you through the setup).
  • Contact form submissions (track visits to your form’s thank you page).
  • Appointment form submissions (track visits to your form’s thank you page).
  • Phone number clicks (track the number of times people clicked a phone number on your website).
The phone number click tracking is a good starting point for measurement, but it is limited because it only provides the raw number of clicks on the phone number. It won’t tell you if a call went through, and you won’t know the name of the person who called or tried to call.

For more accurate data, you can use HIPAA-compliant call tracking. It can integrate with GA4, allowing you to link who is calling you with where they came from on the Internet (organic Google search, website referral, etc.). If you know the name of the person who’s calling, you can determine if the person became a new patient, and the amount of production you generated.

What about organic traffic?
People often ask me if measuring organic traffic is a good metric for evaluating a marketing campaign, and the answer, in general, is yes. Organic traffic is the measurement of how many visitors came to your website from a Google search (or from any search engine), and obviously, the more people that come to your website, the better the chance that they will become new patients. Organic traffic—visitors from search engines—is a useful metric, but it doesn’t tell the whole story. While more traffic increases the chance of gaining new patients, the real indicator is how many of those visitors become contacts or patients. Filtering traffic by state or city makes the data more relevant, but even then, it’s less meaningful than tracking direct conversions.

Figure 3 shows a 90-day organic traffic measurement. Figure 4 represents a filtered, state-level 90-day organic traffic measurement.

4 Steps to Evaluate Metrics
Fig. 3
4 Steps to Evaluate Metrics
Fig. 4
Conclusion
In summary, the true measure of a marketing campaign’s value lies not just in the number of new patients it attracts, but in understanding the balance between costs and revenue. By knowing how much each new patient is worth and how much you can invest to gain one, you can make informed decisions and ensure that your efforts are truly profitable. Careful tracking and thoughtful analysis are essential for long-term success. 
Author Bio
Dr. David Wank Dr. David Wank is a practicing general dentist in New York City and the CEO of Short Hills Design, a digital marketing agency for health care clients. He received his DMD from Harvard in 2003 and is an authority on topics including website development, hosting, SEO, local SEO and analytics. Wank writes CE courses for dentaltown.com and is the author of the Small Business Website Owner’s Manual. He is the creator and instructor of courses including Google Analytics 4 Migration Process Training and the Local SEO Process Training (localseoprocess.com). Contact him at davidw@shorthillsdesign.com or find him running around on the Dentaltown message boards.
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