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April 10, 2008

Pulling Teeth and Radio Advertising: How To Be a Rich Dentist

Ed Ridgway has a great post about marketing for dental practices. We love it because it shows yet another example of a business that can benefit from radio advertising.

Reading Ed's post, we notice that there's a bit of a knowledge gap. He advocates a lot of patience, stating that you have to lose a lot of money before radio is profitable. That may have been true before the developments in direct response radio advertising. These days it's possible to methodically test early on, which drastically cuts the upfront losses and puts the campaign in the profit-generating phase much more quickly.

This is a GREAT example of the need to understand the business model of the entity doing the advertising. Most businesses get one, two, maybe three transactions from a customer. Dental practices get LIFELONG customers who come back again and again and again -- and, they bring their spouses, kids, and friends into the practice. Therefore, the lifetime value of each customer is large, and that means the business can pay a LOT to acquire a new patient and still be very, very profitable. BUT - if the dentist doesn't know what that lifetime value is, he or she will have NO idea how to evaluate the radio advertising campaign. In that case, often the campaign will get cancelled when in fact it is producing profitable results.

Posted by Jeff Small & Brett Astor at 10:24 AM | Permalink