I used to just ask myself this and just choose a number and as long as it is less than the revenue I generated, then I was OK with this.
Spend $400 on marketing. Get one new patient
Spend $250 on marketing. Get one new patient
Maybe even spend $1000 on a radio ad. Get a patient or 2.
but I had no reasoning why I picked this number.
Now, there has to be a better way to figure this out. Let do it better and maximize efficiency!
1st step: How much is your average revenue per patient?
You need to know this number before you ask yourself how much you want to spend.
My current average revenue per patient is $1181 this year.
What is your average revenue per patient this year? (you must know this)
2nd Step: Set a new standard and optimize customer acquisition cost per patient
Lets shoot for 20%!
Knowing my average revenue per patient is $1181, I am willing to spend roughly $230 on marketing in hopes of getting one new patient.
WHY DO THIS?
Because when you start a paid marketing campaign you need to ask yourself this question when deciding on how much is worth spending on a marketing strategy
At a worst case scenario, how much money are you willing to spend if your marketing strategy only generated 1 new patient.
Problemed Solved! My new standard is 20% for paid marketing strategies (the lower the cost per customer acquisition the better!)
As you fine tune your marketing and show better conversion rates, the next question is how low can you go?
How low can you decrease your customer acquisition costs and still get results with a paid marketing strategy?
Now its time to execute and make it happen