Public Relations is a central part of your practice, and for the sake of organization and understanding we break this topic down into public awareness and marketing. Whereas public awareness activity doesn’t have a clear ROI (return on investment), marketing activities should be done with a particular ROI in mind. What is your office’s profit percentage from last year? If you know this number, it will allow you to make improved marketing decisions in 2018.
To state what should be apparent, in any business the revenue you end up with as profit is the amount that you didn’t spend on anything else. One of a number of things you can do with your profits is to invest in marketing activities to help grow your business.
For example, if you choose to spend a dollar on an event and expect 50% profit (50% overhead), you need to make at least two dollars to pay back that dollar you’ve invested. Using this same thought process, if you target a 10% profit margin after all expenses (90% overhead), you have to make 10 dollars to recover that dollar you spent. In this 10% scenario, if you don’t make at least a 10x return on your marketing expense you’re just spinning your wheels. This is a complicated concept, but one that is fundamental; if you’re struggling with the math, or aren’t sure about your profit percentages, target a 10x ROI for any marketing activity and you’ll be fine.
Have fun while you build your practice, increase your profits, and enjoy your life!
Dr. Jeff Scholten