Without a doubt, I can quickly look at 2 different metrics (numbers) within your chiropractic practice, and predict – with relative accuracy – your future level of profitability as a chiropractor.

The two metrics I’m referring to are: Cost of New Patient Acquisition (COA) and Lifetime Patient Value (LPV).

COA tells us the average amount of money it currently costs you to acquire a single new patient. Whereas, LPV tells us how much the typical patient is worth to your practice over the lifetime of their care with you.

When COA is subtracted from LPV we can quickly see the average amount of gross profit your office is generating per patient.

For example, if you spend an average of, let’s say, $1,000 per month on marketing… and, on average you acquire 5 new patients… your COA is $200 ($1,000 divided by 5). If the average patient in your office is worth $700 over the life of their care with you… your gross profit per patient, in this case, would be $500 ($700 LPV minus $200 COA). In this case, acquiring $700 new patients at a cost of just $200 each is well-worth your time. It’s a highly profitable marketing process.

But, for most chiropractors their numbers are no where near the above example. Really worse; most chiropractors don’t even know their numbers. Or, at a bare minimum, most only know LPV without knowing their cost to acquire a single new patient.

Without intimately knowing both of those crucial marketing metrics, how can any chiropractor make an educated marketing decision? They can’t. Just like an investor can’t make an educated decision about a rental property without knowing the cost of the property and how much the tenants are worth to them. Even if they know one of those numbers it’s still not good enough. They need both. Just like you.

Armed with both metrics you can easily make decisions about whether you should continue, or forgo, a particular marketing campaign. You’ll be able to look past response rate – a poor assessment of a chiropractic marketing campaign’s profit value to your office – and see whether you’re losing money, breaking-even, or generating a profit, irregardless of response rate.

Response rate only tells you what percentage of people responded to your marketing and became a paying patient. It doesn’t tell us whether that response rate – good or bad – produced a loss or a profit. Only knowing COA and LPV does that.

So, make a commitment today to review your LPV every month. And, anytime you spend money on marketing or advertising, be sure you calculate the COA for that campaign. If you’re running multiple campaigns (i.e. advertisements) in a single month, be sure to calculate the COA for each campaign separately. Lumping them together dilutes the accuracy of the numbers significantly.

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