Rich Briddock: “The inclination is to spend less because a default position for a media agency is the want to make their cost per acquisition look good. They want their conversion volume to be high, the leads that they drive to be high. That’s where you’ve got to throw that mindset out of the window and really work with the client to say, “Where do you actually need people in the seat?” It might not always be in the place where we’re going to get the lowest cost leads, where we’re going to get the best volume.”
Announcer: Welcome to the Ignite Podcast, the only healthcare marketing podcast that digs into the digital strategies and tactics that help you accelerate growth. Each week, Cardinal’s experts explore innovative ways to build your digital presence and attract more patients. Buckle up for another episode of Ignite.[music]
Lauren Leone: Hey, everyone. Welcome back to Ignite, a healthcare marketing podcast. I’m your host again this week. This is a podcast where Rich and I sit here and we talk about everything we know about healthcare marketing so that we can help you guys grow. What we want to talk about today is goal setting. One of the biggest frustrations in this discovery process with new clients is when we are asked to put together a budget or a media plan, and I ask, “Sure, what’s the goal that we’re planning against?”
There is no goal. It’s really helpful in the process of building out a marketing strategy and letting someone build a roadmap to get you to your goal, rather than just a tactical plan of doing certain activities. Want to ask Rich, who runs our analytics and media strategy team here, some thoughts on how to go about setting a budget and a goal. What good goals look like? How better goals get you better results? Rich, I want to start with a broad, and hopefully, easy question, which is– What should the process of creating goals look like?
Rich: It’s a great question. Probably one that we don’t spend enough time thinking about. I think people hon in on KPIs, without necessarily thinking about goals. We have tons of discussions around conversions and CPAs, but what does that actually mean? Especially if they’re digital things. If we’re tracking a digital conversion, like a form submission, or a phone call, how does that tie back to the actual goal of the client, and what they’re trying to do, in terms of their business objectives?
Start at that end, start at the business objective end at the business planning end. How many patients do I need to get? How many patients do I need to get for a specific location? Then try and work your way back to the digital conversions and goals, that way. You may know, and obviously, there’s really sophisticated ways that you can do this, with tying things back into the CRMs and patient management systems, but a lot of people can’t do that. They can’t connect into their CRM solution, or maybe they don’t even have a CRM solution.
You can start in a more basic way and just say, “Okay, I know that if I drive five phone calls, I’ll get, typically, one new patient appointment.” Just operate off that premise, to take your patient acquisition goal and convert it into a digital marketing goal, and at least start there. Then obviously, there’s some refinements, depending on where the leads are coming from, how qualified the leads are, that you can work with your agency to understand some of those nuances and make some adjustments.
I would say, figure out– You know how many patients you need to drive, you probably know how many patients you need to drive per practice, and you probably know how many leads you need, to get a new patient. Use all of those inputs to then determine what you should be driving, from a digital marketing point of view. What you may find is that you need a budget way higher than you have. Then it’s like, “Okay, well, then what can I drive for my budget, once I understand how many leads I would ideally like to drive?”
Maybe I can’t get 100% of that, because I don’t have enough budget to support it this year. What could I get with $20,000 a month, or $30,000 a month? That’s where I start, is understanding how many new patients you need and then working your way back to those digital lead objectives.
Lauren: Let’s be clear, we cannot create your business goals for you, right? That is, I think, a common misconception. “Here’s my budget, tell me what I’m going to get for it, how my business is going to run, and what my patient yield is going to be,” is really not an appropriate way to be engaging with your digital marketing agency.
Rich: Correct. What we can say is– Whether the goals that are given to us are feasible, from a digital acquisition point of view. If you come to me and say, “Okay, I’ve got a practice in the middle of nowhere and I need 200 new patients a week, and there’s no search demand, there’s hardly anybody on social media, there’s hardly any display traffic out there.” We’re going to come back and say, “Well, that’s just impossible.” We can’t drive the thousand leads a week that you would need, to drive 200 patients.
You’re either going to have to modify your goal, or you’re going to have to look at maybe things like costings and understanding why you need to drive so many patients to that practice. Is there anything that you can do there to modify that need? Because digital alone is not going to drive it.
Lauren: When clients do come to us with goals, which is always much appreciated, there’s another way that we engage and help with planning. That is coming to an agency with a goal and saying– All the tactics are on the table. I’m not dictating that, “Okay, this is my goal, but you have to be on Facebook, or you have to be doing SEO, or you have to be doing email,” but that, “I have a goal, can you help me figure out the best acquisition mix?”
It may not be that all $30,000 lands on Google search buys, where it can get expensive. Maybe 10% of that is diverted over into SEO, which can offset some of the acquisition costs. How do you think about a client’s goal, in relation to media mix?
Rich: Yes, I think– Again, it’s taking some of the nodes, and from experience, we typically know that if you drive the lead through PPC, there’s going to be a higher chance that’s going to convert into a patient. Again, all these things should be tested. If you’re going to run multiple media mixes, if you’re going to run social display PPC, then one thing that you’ll want to do in the first 60 days of running those different channels, is validate the lead quality that are coming from those channels.
Actually saying, “Okay, I think that PPC leads are going to convert to patients at twice the rate of a display lead, or twice the rate of a paid social lead.” That should be validated by doing call listening or by checking form submissions that you get from those channels, against actual patients that you see in the PMs, or the EHL, and in validating those assumptions. Once you know that those assumptions are correct– You’re not going to know that upfront.
You’re operating off a lot of assumptions, probably, in the first couple months, but once you’ve validated those assumptions, then you should be able to actually define the right media mix. You can say, “Okay, I can spend $5,000 on these two display tactics and I know that four leads from display will equal one new patient.” The CPA makes sense on this $5,000, where even if I have to drive twice as many leads to turn into a patient than I do on search, the CPA’s half what it is on search.
Therefore, the cost per new patient through display, when I spend that $5,000, is the same, or even slightly better than it is on search, where maybe I’m spending $25,000. You’re trying to find out where the next best dollar should be invested, which channel it should go to, which tactic it should go to. Again, understanding how many leads it takes to turn into a patient is the key component to understanding where you should be spending the dollars.
Lauren: Taking budgeting and goal planning to a new level, thinking about capacity. This is something we get asked a lot and something we’ve also been pushing our clients to consider more, which is– Every practice may have the same capacity on a monthly basis, but some have longer wait lists, some are booked up because of local reputation, brand equity, whatever it may be. How is Cardinal, and how are some of our clients thinking about capacity, then how does that impact fluidity of budget and goal?
Rich: Yes, that’s primarily how it’s influencing the decisions that we’re making, which is around where should we be spending money. The default position on paid media, especially on the paid media side, where you’re making these decisions around budget allocation, is to spend where the lowest cost conversions are, or where the highest patient revenue is. That’s where the focus point of the spend will go.
I think it’s incredibly important that you get insight from the client, about where they actually need the dollars to be spent, to equate in new patient appointments, that are then coming in the door in those practices. As an example, we’ve seen situations in the past, where you may have a practice that’s in an incredibly populous area, that has a ton of demand. They also have an amazing provider reputation that you mentioned, but they’re only open one or two days a week.
We were able to drive hundreds of conversions to that practice, but obviously, there’s no way that they could see those leads, even if they converted only a fraction of those leads. They couldn’t get them all, they couldn’t convert them all into appointments. Whereas you have other practices, maybe in more rural areas, with less demand, that are really struggling, or maybe in a competitive area, with a ton of other DSOs or the behavioral health providers that they’re competing against, and the CPAs are really high.
The inclination is to spend less because a default position for a media agency is the want to make their cost per acquisition look good. They want their conversion volume to be high, the leads that they drive to be high. That’s where you’ve got to throw that mindset out of the window and really work with the client to say, “Where do you actually need people in the seat?” It might not always be in the place where we’re going to get the lowest cost leads, where we’re going to get the best volume.
We might have to be okay with saying, “I could get you leads for $150, or $100, or $50,” but actually, over here I’m going to get them free for 300, because that’s where you’ll have overheads. That’s where you need capacity filling. We have started doing that with a number of our clients. At first, it was quite clumsy and it was very broad brushstroke. Breaking practices into tiers based on priority of capacity, but now, we started to be more fluid.
We have one client where they will send us their capacity data by location for a two-week, forward-looking window, to say, “This is how many people we’ve got booked in for the next two weeks, and their percentage of their capacity for each location.” Then, we will adjust budgets on a weekly basis, to try and attack those locations that have a lower capacity right now, in terms of they have more rim to fill their capacity, and pull back on locations where they’re basically booked out, or they’re close to being booked out.
Obviously, that works in a scenario where you have a DSO, or something that’s controlled at the corporate level, where you can easily move funds. If you’re being bought in more on a franchise level, where each location is paying for their marketing dollars, or paying a percentage of their marketing dollars, then that’s the one area where I’d say you’ve got to be careful about just moving budget around and switching budgets without everybody understanding what’s going on.
We get calls from providers being like, “Why am I getting less leads this week?” And it turns out you’ve cut that marketing budget by 50%, so you’re not driving as many leads now. Those are the things that you just have to work through with the client, and the nuances you’ve got to understand.
Lauren: A question that just continues to get more complex. You’ve got a multi-location client, maybe they even have multiple brands, then they don’t just offer one surface therapy, they also offer psychiatry. They also have higher-cost interventional solutions, like TMS. How do you then also manage service and the cost per acquisition threshold for different services, and then the revenue that certain services drive into a business?
Rich: It’s a great question. That’s why I would say these upfront conversations with your agency, or with your in-house team, are so important. We have had conversations with people, even a dental business, where they don’t feel that bifurcated, in terms of their service lines. They don’t have separate doctors doing separate things, necessarily. We’ve had conversations where they’re saying things to us, like, “We need to grow the middle of the business. We need to do more root canals. We need to do more crowns. We need to do more bridges.”
Based on those needs, you might structure your campaigns differently. If you really need to be able to control the push and pull, in terms of budget support, for those specific services, you may have separate campaigns for them, but that’s unlikely, again, going back to the default position of agencies and in-house media teams, that is unlikely to ever be the default position. If you have this specific need, if I need to be able to support certain service lines at certain times–
The amount of spend that I move towards each one could be vastly different, then you should have those conversations upfront, because it will impact the structure, most likely. The other way to do it, in a more consolidated model, is to use Target CPA controls at the ad group level, but it’s less accurate, less reliable. You can make adjustments to your target CPA, or your target rowers, to try and increase or decrease the amount that you spend in those ad groups, but it’s much more directional and a lot less scientific.
You’re not guaranteed to spend more or less as you make those adjustments because Google might be able to find the same number of leads at a lower cost per acquisition, or may still spend the same amount of budget. Again, it’s not anywhere near as accurate as having separate campaigns, where you can just literally control the budget that’s going to them. Again, I think communication between the client and the agency, or the in-house team, is really important.
Lauren: Another thing I get asked a lot, and this is usually in the pre-sale processes– “Can you give me benchmarks? What should my CPA be? What’s everyone else doing? What are your other clients getting? Am I going to get the same thing?” Talk to me about the benefits of benchmarks, but also the dangers. I want people to understand that just a singular benchmark is a very dangerous thing to put out there.
Rich: The benefit of benchmark is that you have a comparison point, to measure up what your performance looks like against something else, that is supposedly somewhat objective. The detriment and the danger is how did you get to that benchmark in the first place? I think we have a stable of like clients in the healthcare space now, where typically, if someone’s coming in on behavioral health, or dental, we’ve worked with enough providers in the past, where we can say–
“Okay, if you have a decent user experience and you’re trying to chase this service line and you’re in these areas, you could typically expect the CPA from between x and y.” As I just mentioned–
Lauren: You already gave me three-
Rich: [crosstalk] That’s a couple of factors-
Lauren: -three factors. [crosstalk]
Rich: -that are going to really influence what your benchmark might look like. We did a lot of work with the DSO when we worked on the same account, where we had a list of factors that influenced the cost per acquisition by location, and by market. Within their stable of 150, 200 locations, they had vastly different CPAs because of competitive density, household income, the search demand that existed there, the reputation of the provider in those locations.
Rich: Exactly. Then things like, obviously, who you’re in the auction against on a search side, is really going to impact it. If you guys work in verticals where you’re up against mom-and-pop shops, some mom-and-pop shops don’t do any advertising on Google. Some of them do a lot of advertising on Google, relative to how much you’d support a single location. You may be in some markets where you’re up against five small businesses, or in other markets where you’re up against two.
Some where they have an amazing reputation, and some where they have a really poor reputation. All of these things are going to play into what you have to pay for that patient acquisition cost. I think the other thing, too, and you touched on this, another massive variable in benchmarking is what is the patient that you’re trying to get? Behavioral health is a good one. If you’re trying to get a TMS patient, do not expect a general psychiatry patient to come in at the same CPA as a TMS patient.
TMS patients are going to be more expensive. People are willing to pay more for a click on TMS keywords. It’s harder to convert. It’s a more specialized treatment. It’s a higher commitment from the person who’s looking for it. Whereas, if you’re just looking for a telepsych appointment, that’s really easy. It’s generally relatively cheap on your insurance. Again, you don’t want to have a single benchmark if you do multiple service lines. Obviously, if you get to be a health system, that’s going to be exacerbated even more.
You might be doing primary care and then oncology, as an example, so obviously, your CPAs are going to be vastly different, depending on the type of patient, the type of lead that you’re trying to drive. Then obviously, the other thing, too, is– What is a lead? That’s the other factor that goes into benchmarking. Is the CPA measuring a phone call? Is it measuring a form fill? Is it measuring an online booked appointment? Is it measuring a phone call where we know there was a booked appointment?
Again, it sounds silly. It sounds obvious, but actually understanding what the KPI is, that’s going to have a massive impact on what you should be benchmarking against.
Lauren: You mentioned something else that is extremely subjective, in many relationships with digital agencies, isn’t controlled by your agency, which is the user experience side. Can you benchmark yourself against another agency’s cost per click or quality score? Sure, but the actual conversions still is impacted significantly by what happens on that page. If, for example, your agency comes in and has feedback that that page is not going to convert, or it’s not up to the standards of other clients converting at that rate, but you’re unwilling, or unable to, at that point in time, address UX issues, you can’t expect the same performance.
Rich: Yes. I think it comes back to that triangle of fast, good, cheap, of the thing where you can have two. Ultimately, irrespective of what you say, a good benchmark is $100 CPA. In reality, your CPA is your CPA, at that moment. If your CPA is $200 and the benchmark CPA is $100, really, what your focus should be on is not necessarily getting to the $100 benchmark, it should be getting the $200 CPA down, as much as possible, as quickly as possible. If it’s about speed, getting that CPA down by doing good work, then it’s going to be expensive.
If it’s about, I’ve got a set retainer with my agency, or I’ve got a set amount of budget with my in-house team, the work to get that CPA down is going to take longer because you can’t throw all the money at the problem to solve it, but you may blow way past that benchmark. I say benchmarks are nice for durational purposes but you shouldn’t put too much stock on them, because at the end of the day, you just want to get the lowest possible cost per new patient, or cost per booked appointment, irrespective of what any benchmark is.
I wouldn’t stress out too much about benchmarks. It’s more about making progress on where you are today.
Lauren: Funny that you just said, “Get the CPA down as much as possible.” I think there’s another conversation for another day on the Cardinal podcast, about volume versus efficiency. Those two things intersect. We’d welcome you all back another time, to probably talk about that topic. We could spend 20 minutes just talking about what we’ve seen, how those things can work together, and work against each other. Thank you guys, all, for listening. Thank you, Rich, for being here. Please like, comment, subscribe on wherever you’re listening. We hope to see you guys back again next week.[music]
Announcer: Thanks for listening to this episode of Ignite. Interested in keeping up with the latest trends in healthcare marketing? Subscribe to our podcast and leave a rating and review. For more healthcare marketing tips, visit our blog at cardinaldigitalmarketing.com