Calculating Google Ads ROI

/Calculating Google Ads ROI

Calculating Google Ads ROI

Google AdsI’ve mentioned in previous articles that Google Ads, formerly Google AdWords, is one of the best platforms online for your aesthetic practice to advertise on.

Before you get started with Google ads, it bears mentioning that you really need to think through your strategy with your ad campaigns…

  • Which procedures are you targeting?
  • What symptoms or concerns does your ideal target market have related to these procedures?
  • Where in the awareness spectrum does your target market lie? Do your ads reflect this?
  • What’s your USP (unique selling point)?
  • What’s the call to action on the landing page you’re driving them to?

These are just a few of the questions you need to ask before you even start to create your campaigns.

You also need to map out your goals. Like any investment, your goal should be to bring in new patients, and in order to track ROI, you need to be able to track all Google ad leads down to a name, whether they submitted a web form or called in. Then you simply need to track revenue tied to that name. Without this ability, you cannot take any of the next steps.

Once you’ve got your strategy mapped out, along with your KPIs (key performance indicators), you’ll want to…

1) Ensure you have mechanisms in place to track leads:

Lead Tracking

As mentioned above, you need to have the correct tracking tools in place to be able to evaluate ROI. This means setting up…

  • web leads and phone call conversion tracking in Analytics, imported into Google ads
  • phone tracking software that can track call-in leads down to the source
  • a singular Google document where you can track both form submission and call-in leads, displaying each name with the lead’s contact info and the source, medium, and keyword they came from. Ideally, this document is dynamically populated with each web and call lead via a Zapier feed

2) Know your average value of a patient per year:

Whether you run a plastic surgery center, dermatology practice, or med spa you have the ability to add up your revenue and divide by the number of patients you saw to come up with the average value of a patient this past year. This data is more valuable if you can calculate the average value of a patient for the first 12 months after they come in for a consultation since simple calendar year evaluations will inevitably include patients who just started their relationship with your practice.

Average Value Per Patient

Many plastic surgery centers earn $6,000-10,000 or more for one patient treatment. That’s a solid number, but if you only offer surgery then your practice is unlikely to generate more revenue from that patient (at least in the next year). That’s not to say that patient doesn’t have more value; they absolutely do. They can become a brand advocate and refer others to you, for starters.

On the other hand, a med spa might only earn $300 in the first patient’s visit, but if they get that patient on a plan they can get them to spend $500 every 2-3 months, as well as possibly one $2,000 laser treatment series. In that example, the patient is suddenly worth $5,000 or more in a year!

If we’re talking patient value it doesn’t make sense to focus solely on revenue generated from the first treatment. Just because your Google ads promote CoolSculpting and you know the average CoolSculpting patient spends $3,000 on a set or treatments doesn’t mean that’s the extent of the monetary value of that patient. If you have the proper patient retention strategies and tactics in place that patient is worth much more than $3,000.

Front-end vs. Backend Marketing

Marketers call this foot-in-the-door sale “front-end marketing.” For most practices, the profit is made on the backend. In other words, you invest a dollar amount to drive new patients, and even if you break even on that initial transaction that’s fine because that patient is worth so much more in the long-run.

You not only should know the average value of a patient per year, but also the average value of a patient for two years, five years, ten years, and more! You should know the lifetime value of a patient!

3) Calculate ROI: 

Calculate ROI

Let me give you a completely hypothetical example. You run a breast augmentation campaign with a $2,000/month budget. After one month you’ve generated 10 leads, resulting in $200/lead. Of those 10 leads, you got ahold of 7, and 4 came in for a consultation. Of those 4 leads, 1 converts into a new patient, or booked surgery. That 1 lead resulted in $6,500.

You earned $6,500 and spent $2,000, that’s a $4,500 ROI, right? Not quite. That’s your gross profit. To determine your net profit you need to subtract your procedure expenses. Let’s ballpark $1,500 for implants and $2,000 miscellaneous surgery costs, such as surgery center fees, anesthesiology, post-surgical garments, and other minor expenses. That results in a net profit of $1,000.

If you factor in your “surgeons fee” you might then dip into the negative. So does this mean your Google ads lost you money? Absolutely not. If this is how you calculate ROI then there’s a disconnect with how you’re evaluating ROI.

Calculating ROI for Aesthetic Procedures

Is breaking even a failure?

If you’ve run the calculations and your final result is $0, you’ve broken even.  Does this mean that your campaign was a failure? Absolutely not. Think about, if you use the example above – assuming your net profit was $0 – and extrapolate out 12 months. While you might not have made any additional profit you’ve added $72,000 in revenue for the year for free! More importantly, you have a new patient that you can market to on the backend to generate even more revenue.

On top of this added revenue, you also have 12 new brand ambassadors that cost you nothing! Even if you run a surgical center and these patients don’t end up spending more money with your practice their value extends well beyond anything monetary. You can leverage these brand ambassadors to…

  • generate more reviews
  • generate referrals
  • showcase their results and/or a testimonial on video
  • build up before & after gallery

This is why “break even” is a fine objective. It increases the number of patients, and revenue, you’ve brought in, FOR FREE.

Should you settle for break even? Not necessarily. You really shouldn’t “settle” for anything. Part of being a successful digital marketer is constantly pushing for better results. The key thing to understand is that marketing isn’t just about quick wins or front-end sales. You need to know the average lifetime value of a new patient and how you can maximize that value and increase it with patient retention (backend) marketing.

Ready to take the next step with your marketing?

We’ve got a collection of articles about Google ads that you can check out here. You can also take the next step and schedule a consultation to learn about how Google ads, or a more comprehensive marketing strategy, can help your aesthetic practice by simply dropping our team a note here or calling us at 877-673-7096 x2.

By |2018-10-09T14:45:56+00:00September 30th, 2018|Google Adwords|0 Comments

About the Author:

Tom joined Matt in 2010, helping co-found Turbo Medical Marketing. As COO, Tom oversees all production and works directly with both the executive team and the Account Managers. Tom has helped to formulate systems and processes for sales, business development, internal marketing, service offerings, client intake, and employee hiring and training. You can get a sense of Tom's marketing knowledge, as well as pick up some marketing tips and insights, by checking out the Turbo blog that he contributes to weekly. Tom has also spoken at several aesthetic conferences in the past about topics ranging plastic surgery technology to mobile marketing. Tom received his B.A. in Business Management Economics from the University of California at Santa Cruz. He is a former collegiate rugby player and he enjoys golfing, snowboarding, hiking, and playing with his dog Yogi in his spare time. He's also a mentor with the Big Brothers, Big Sisters program in Charleston. Tom lives with his wife Lindsay in Mt. Pleasant, SC.

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