Tom Orent, DMD
Most advertising is an art. Follow Madison Avenue and you'll see awards given for the best print, radio, and television ads. Like an actor receiving an Oscar, the ad designers' value increases upon receiving an award. No question advertising is an art. The only question is ... are you in the market for some expensive, useless art?!
Sure, that sounds harsh, but it's the truth. I've got dozens of personal stories of award-winning gorgeous (useless) advertising that was done on my behalf during my earlier (naive) years in practice. My favorite was my $8,000 full-page ad in Boston Magazine. It was a gorgeous ad ... a striking piece! The photograph was of a beautiful model. The designed used plenty of "white space," and it was very "professional" in appearance.
In my newsletter, I recently went into great detail on misconceptions about ROI (return on investment). To determine whether or not an ad helps increase practice profitability is more complex than knowing a simple ROI ratio. If your lifetime value per patient is high enough, ROI could be lower than you might otherwise tolerate. It's all math. Of course, you would think there would be some ROI in this case! So what was my return on my $8,000 Boston Magazine ad? Nada, zero ... the Big donut hole.
So, if all those awards and beautiful ads are borderline useless, then how do the big ad firms survive? And why would big, huge corporations use them? Simple!
Look closely at most Madison Avenue-style advertising. There is no way to measure the response from any given ad. It's called "brand" or "image" advertising. It's supposed to eventually make you so familiar with a brand that you'll be persuaded to buy that brand when you are ready to purchase. Does it work? Sure ... if you're Coke, Pepsi or Lexus!
But if you are a small company (under $10,000,000), you're hemorrhaging money wasting it on brand advertising. As solo dental practitioners, we can't afford the kind of money it would take to build a brand name sufficiently to make it a profitable way to go.
Direct response marketing
Well, doesn't brand recognition help? Sure. But I'd not spend a dime on it directly! However, indirectly, you can benefit from it without paying for it. If you spend your ad dollars on "direct response marketing," you can (by definition) measure the results of every penny you invest in advertising. Yet, every time you put an ad out there, you also are building brand recognition. The difference is that you never spend ad money on brand recognition just for the sake of image or brand.
Assuming that you have calculated your "Average Lifetime Value per Patient," then you know what you'll bring in long-term from x number of responses to an ad. From this, you can judge effectiveness of your ads solely based upon the math.
The second reason the big firms use a lot of brand and image advertising is because their motivation to advertise is quite different than ours. They have other folks to answer to, each of whom has a different agenda. Both Wall Street and a company's Board of Directors have great interest in seeing image and brand built fast and furious ... even at the expense of resulting sales. That doesn't mean it's wrong or bad, it just means we have different agendas.
In a small business every ad becomes a salesman for your practice and, as such, every dollar you pay for this must result in directly measurable returns. Know your math and you will make far more meaningful, profitable decisions. If a particular ad doesn't work, modify or eliminate it altogether.
Enjoy a distinct, competitive advantage
If you want to build a handsomely profitable practice, study and apply the principles of direct response marketing. Each of my next several articles will focus on the science of marketing, beginning with the "A/B Split Test." As we explore the science of maximizing your ads' effectiveness, you'll begin to enjoy a distinct, competitive advantage for building a fabulously profitable practice!
Dr. Tom Orent, the "Gems Guy," is a past president of the New England Academy of Cosmetic Dentistry. He has presented his "1000 Gems Seminars™" in five countries and 48 U.S. States. He is the author of five books and hundreds of articles from practice management to "Extreme Customer Service." To receive a free half-year subscription to Dr. Orent's "Independent Dentist Newsletter" (normally $297 per year), send request with doctor's name and address to [email protected] or fax to (508) 872-0020.