Healthcare Marketing ROI

Man drawing healthcare marketing ROI graphics on a clear screen | Vanguard Communications | Denver

Why healthcare marketing ROI (return on investment) is the must-have metric for success

Just a decade ago the “must have” for most medical practices was a website, five years ago it was a social media presence and Web 2.0. Today the hot topic is medical marketing and practice promotion. This is a topic where most doctors and office managers feel out of their comfort zone.  

A marketing program is necessary to increase the number of new patients and help maintain the loyalty of existing patients. Unfortunately, most physicians have few or no skills to determine the effectiveness of a marketing program. This article will unveil the mystery of how to determine the return on investment (ROI) of healthcare marketing.  

Most practices that engage in a marketing program find it difficult to track the results of their efforts. Unless you are able to track the revenue generated by every single marketing activity, you have no idea which of your marketing efforts have accomplished something for your medical practice.

Measurement is vital to successful marketing because it is the only way to truly evaluate the effectiveness of your healthcare marketing activities. One of the biggest mistakes practitioners make in their healthcare marketing efforts is that they have no idea how their marketing strategies are helping them, and they have no clue which marketing activities are generating the best results.

By tracking the results of marketing, you can objectively see what works and what doesn’t work, allowing you to tweak your marketing efforts. If something is working and producing results, you will probably continue on the path of your marketing plan, which we discussed in a previous post.

On the flip side, if the marketing results aren’t what you anticipated, then you can make adjustments in your marketing plan and then determine your new direction. For instance, if you know that community seminars are the best strategy for attracting quality patients to your medical practice, then you can look for ways to add additional programs to integrate that particular activity into your healthcare marketing plan.

Monitoring, monitoring, monitoring (the ROI of your plan)

Vanguard Medical Advisor Neil Baum, MD on healthcare marketing ROI | Vanguard Communications | Denver, CO | San Jose, CA | Jacksonville, FL
Vanguard Communications’ on-staff medical and practice management advisor Neil H. Baum, MD

The advice for real estate developers is location, location, location. The advice for medical marketing is monitoring, monitoring, monitoring. There are a variety of ways to monitor each of your healthcare marketing activities, depending on the type of marketing you do. For instance, if you conduct an email campaign, the best way to track the number of leads generated is by using call tracking. Call tracking is a low-cost and precise way to identify whether or not your marketing efforts are paying off. By using call tracking, you can determine which marketing activities generate the most leads. As a result of using call tracking, you can calculate the revenue generated by the marketing activity and your ROI.

Perhaps the easiest and least expensive tracking method is Google Analytics; it’s free and available at Whether you are tracking online leads using Google Analytics or tracking leads via call tracking, monitoring is important for the success of your healthcare marketing campaigns. Google Analytics will provide you with data that there is an increase in the number of incoming phone calls. This is translated as your marketing is working, however, it does not say that you are getting a good healthcare marketing ROI. That only happens when those incoming phone calls are converted to patient visits and an increase in income to the practice.   

There are several tracking metrics that are important for any marketing program. These are the key indicators of the success or failure of any marketing program.   

Acquisition cost per patient

This is a metric where the rubber meets the road. This is probably a number that most doctors who are embarking on a marketing program can get their arms around. If you know your cost per acquiring a new patient and what that patient generates in income, you can have a huge handle on your healthcare marketing ROI.

Mostly, this cost tells you how much money is being spent for every new patient acquired. The older antiquated method was simply to divide all marketing costs by new patients acquired in a specific period. The better approach that we recommend (for healthcare marketing ROI tracking) is to calculate the cost per acquired patient for every marketing channel, which include paid ads, website, social media and other marketing channel factors that contribute to your marketing efforts. This lets you know which marketing activities are most effective and which ones require a more aggressive approach.

Calculating your acquisition cost per new patient is simple. These tools allow you to track which marketing channels your patients are coming from, and then decide the importance and effectiveness of each channel. This will help you efficiently develop a digital healthcare marketing strategy.

Leads vs. new patient acquisition

A new lead is a person who could become a new patient. New patient lead cost is marketing expenses divided by number of new leads. Suppose the marketing expenses are $5,000 and 50 new leads are generated. That’s a cost per lead of $100. New patient acquisition cost is the income received for an actual new patient who schedules an appointment and keeps that appointment.

What’s the difference between a lead and a new patient?

The real marketing metric, the one that really counts, is how much practice revenue value is produced from these new patients as a result of what your practice spends on that marketing campaign. If you want to get a real handle on the healthcare marketing ROI, you calculate long-term value for you practice or lifetime value of each new patient that becomes part of your practice. The lifetime value also adds to the value of your practice if you ever consider selling your practice.  

Any potential buyer of your practice wants to know that the practice is viable and growing and not stale or contracting. Demonstrating the number of new patients added to the practice makes your practice more attractive to any buyer. For example, one of us (NHB) had a marketing program that attracted vasectomy patients as we positioned the practice to be on the first page of Google if a prospective patient typed in “vasectomy + New Orleans.”  As a result, we generated 2-3 new patients every day who made appointments, and the majority of the men made a decision to proceed with the vasectomy.

Here’s an example of calculations for leads, new patient acquisition and lifetime value of a new patient. Let’s assume that $2,000 was spent on marketing, which generated 20 leads and five new patients who made appointments, and that the lifetime value of the patient is estimated to be $1,500. The acquisition costs would be:

  • $2,000/20 leads = $100 per lead.
  • $2,000/5 scheduled appointments = $400 per new patient acquired.

Assume a $1,500 lifetime value per patient. Therefore, five new patients produced from that campaign @ $1,500/new patient = $7,500 increase in revenue. If you subtract your marketing cost of $2,000 from your revenue of $7,500, your practice will net $5,500. Divide that by your marketing cost of $2,000 and your healthcare marketing ROI is 275 percent.

Most marketing experts will tell you that a minimum benchmark should yield 3:1 or 300 percent. If you can consistently produce $3 for every $1 spent, your marketing plan is successful. If your healthcare marketing ROI is > 3:1, then keep on keeping on! And perhaps set new goals. However, if the ROI is <3:1, it is time to change directions and tweak the marketing plan to increase your ROI.

Bottom line: Marketing is an effective method of generating new patients. In order for a program to be considered successful, each practice needs to measure its program’s healthcare marketing ROI. Only then will the practice understand where the marketing dollars are going and what is the return on this investment. It is relatively easy to do and will help the practice determine the benefit of the marketing program.  

Want to guarantee your ROI?

We guarantee a 15%-30% increase in new patient visits in the first year of working with us, or we’ll work for free (in nearly three decades, we’ve never had to work for free).

Our new patient guarantee Contact us