Investing in Client Continuing Education Pays Off in the Long Run
Posted Jul 06, 2011 in Marketing
Sponsoring continuing education programs can have a significant impact on client retention and acquisition, customer engagement, cross selling and business growth. I advise laboratories to look at continuing education as an investment in marketing rather than as a short-term profit center.
If you're overly concerned about charging enough tuition to cover your costs, you might limit the attendance. If you try to recoup the cost of a program from tuition, you're making a profit center calculation.
However, if you look at the program as a marketing expense and measure the investment return, you may be able to charge tuition that doesn't cover your costs, but entice more dentists. With this approach, you may "lose" money on the event in the short term, but you'll be counting on the investment paying off in the future. Here's a specific example from a laboratory I worked with on a continuing education program. I was the presenter and my topic was improving case acceptance. The owner wanted to measure his return on investment and the execution costs related to my role in the program. I felt the heat of the seat indeed.
The total cost for the program, including staff, marketing, room, food, handouts, and my travel and honorarium was $5,400 dollars. The lab didn't charge tuition (however, my recommendation is to charge at least something because it defines some value). Of the 15 dentists who attended the program, 12 were existing clients and three were prospects. During the year after the program, the laboratory followed up with the clients with a monthly newsletter; telephone sales calls; and personal sales calls to deliver a CD of the program, bagels and donuts.
Here were the results:
- One of the prospects began sending work one month after the program and his workload grew to $3,500 per month, making his first 12-month average just over $2,000. So, his work generated $24,000 the first year and should total $42,000 annually moving forward.
- Cross selling was successful with two existing customers. One hadn't been aware of the quality of the lab's all-ceramic and esthetic work and started to send some of his anterior crowns. The other was a removable client who began to send C&B work. Each client's workload increased $1,500 per month; when adjusted for incremental growth, that's an increase of $36,000 for the first year.
- Overall, the revenue from the 12 existing accounts was up. On average, the monthly revenue per doctor (adjusted for the cross-sold work from the two customers described previously) increased $300 per month, a total increase of $43,200 for the year.
The first-year results after the seminar and additional follow up: $24,000 from the new acquisition, $36,000 from the cross-sold clients and $43,200 in simple growth; that's a total return of over $103,000 for a $5,400 investment or about a 5% cost to acquire the new and incremental business.
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