In business circles, calculating ROC seems like a very easy calculation. So why is measuring the impact of your practice’s website and social media efforts so challenging?
Ever try calculating the Return on Investment (ROI) of an investment? In business circles, it seems like a very easy calculation. In the old days, we called it the “bottom line.” Calculating the bottom line was easy. Just compare the cost and return of one purchase to another, in dollars and cents.
Modern business-savvy practices, however, now speak in terms of ROI. Measuring the ROI of an investment can become tricky as the ROI equation accounts for softer variables including value, worth, satisfaction, and time.
Measuring the ROI of a retail purchase is simple and straightforward, but why is measuring the ROI of social media so challenging?
The Formula for Calculation of ROI
(Return - Cost of Investment)/Cost of Investment = ROI (%)
Buy a Candy Bar: If you buy a candy bar for $1 and then sell it for $2, the ROI is 100%. This is a good investment. This is pure simple math.
($2 - $1)/$1 = 100%
In the case of buying new expensive equipment for the office, the calculation gets a bit muddier, but once you find out the actual “cost,” it’s a simple calculation, too.
Buy a New Retinal Camera: Price tag is $50,0000. Assume we get $50 per retinal photo and we could use this 20 times per month. Easy purchase decision ...don’t buy it, way too expensive.
But when we realize that the price is amortized over five years and our monthly “cost” is only the cost of the monthly payment, say $500, it’s easier to see how the ROI is actually quite high as we generate a profit immediately.
Starting a Website: The ROI of starting a blog/website in terms of a marketing tool is much harder to do. The actual dollars to start a blog, by the way, is less than $100/year. Maybe that’s all you need to know.
On the other hand, naysayers to starting a website or blog claim that it may take too much time and we must also consider the cost of our time. Other terms such as “value” and “satisfaction” creep into the equation, seemingly making the problem even more difficult to solve.
Our time is valuable. It is very difficult to measure, but in terms of generating revenue at the office, a physician's time is very valuable. Perhaps you can assign a dollar value and plug into the ROI equation. Perhaps you can’t. Perhaps you can delegate the price, in terms of time, to a practice administrator or a junior associate. At some point, you’ll figure out the right “cost.”
Even more difficult is trying to define - and measure - is the cost of not engaging the Internet in terms of dollars and cents. It’s impossible to measure the cost of not engaging your patients or the cost of not communicating and “joining the conversation.”
The cost of not doing business, by not having a website/blog/social media, by not understanding the needs of your patients, however, is exponential. The cost of not engaging your practice to the Internet is so large that you won’t be able to put a number on it. You can’t quantify the negative impact it will have on the “returns” side of the equation (by decreasing patient volume) nor the increases the “costs” (in terms of patients that never come through your door).
No matter how you measure your ROI, the cost of starting your website marketing is miniscule compared to the losses that you’ll never see.
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