The Beginner's Guide to Healthcare Patient Acquisition

The Basics of Patient Acquisition

What is Patient Acquisition?

Patient acquisition (referred to as 'customer acquisition' in a more general sense) is the process of bringing new patients or clients to your business. It’s the combination of marketing and sales strategies you use that help turn a stranger into a customer.

It’s important to make a distinction between lead generation and patient acquisition at this point because while they both attempt to attract new visitors to your business in the hopes of turning them into patients or clients, they are two different strategies.

Lead generation, as a strategy, is suitable for businesses that have a long buying cycle, offer a high-priced product or service, or require a sales team to actually make the sale. 

Patient acquisition can be used in conjunction with a lead generation strategy, where you implement strategies across multiple channels to help nurture the leads you’ve collected towards becoming a client, or it can be implemented as a stand-alone tactic, where your aim is to take people from a stranger to a patient without the need for them to become a lead first.

Another way to think about the difference between the two is in terms of dollars.

A lead is someone who has indicated they want to hear from you further. They might have signed up for your newsletter, or downloaded a resource from your website, or reached out to your sales team with an inquiry. Capturing this information is the goal of your lead generation activities.

From here, a patient acquisition strategy steps in and seeks to turn this personal information into revenue by nurturing the relationship, building trust and positioning you as the solution to the lead's problem.

• Lead generation = personal information
• Customer acquisition = revenue
•  

As you’ll soon see when we discuss patient acquisition channels and strategies, most businesses will find success with a combination of lead generation tactics supported by a patient acquisition plan. 

Measuring Customer Acquisition

Like anything in business, you want to be able to calculate the cost of bringing in a new patient or client. To do this we use a concept formula called Customer Acquisition Cost, or CAC for short.

Side note: For the sake of simplicity, and to align the content of this guide with the wider marketing and business community, we will use the term 'customer' here to mean patient. Since these metrics are universal, we will stick to using the most commonly used terms.

CAC is an important metric as it directly ties revenue back to marketing costs, and is usually calculated per campaign or over time, usually a financial year, but sometimes quarterly or even monthly.

To work out your CAC is quite simple, but it does require access to plenty of data. The formula is:

CAC = MC/CA

Where MC equals ‘marketing costs’ and CA equals ‘customers acquired’

Let’s use an example:

Say you spend $10,000 in the first quarter of the year on ALL marketing costs and in that time you acquired 100 customers, then your CAC is $100 - it costs you $100 to acquire one customer.

Working out how many customers you acquire is easy, but figuring out how much you spent can be trickier. CAC only works when you include ALL marketing costs, so the full formula would look like this:

CAC = (MC + W + S + OS + OH) / CA, where:

- CAC is customer acquisition cost

- MC is marketing costs

- W is wages for marketing and sales

- S is marketing and sales software

- OS is outsourced services

- OH is overhead for marketing and sales

- CA is customers acquired

Many businesses get caught in the trap of thinking that marketing costs are only those related to advertising spend, but it actually goes much deeper than this and knowing your true costs will help you greatly improve your customer acquisition efforts (not to mention better understand and forecast cash flow and business health!)

CAC is a good metric to show you how much you spend versus how much a customer brings in, or how much they are worth to you. However, you need to use it with other metrics, such as lifetime value, because:

A. It doesn’t show how much a customer spends with you, or how frequently they make a purchase. It might cost $100 to bring in a customer, but over their lifetime (which we’ll explain below) they might spend $10,000 with you. In this case, you might want to increase your marketing spend as $100 in exchange for $10,000 is pretty good, and

B. It doesn’t take into account a long buying cycle. If you spend $10,000 in Q1 but those customers don’t purchase until Q2 your CAC for that quarter will be skewed. While this is not necessarily a bad thing, understanding this will improve the quality of your reporting and help you make more informed decisions.

Customer Lifetime Value

Customer Lifetime Value, or LTV, is another important metric you should be looking at when reviewing your customer acquisition success. A customer’s LTV is the estimated net profit that an individual or business will provide over their lifetime as a paying customer.

Calculating LTV requires understanding your average purchase amount and purchase frequency, but it isn’t a difficult metric to work out. Here's how:

1. Calculate your Average Purchase Value (APV) = total revenue / number of orders
2. Calculate your Average Purchase Frequency (APFR) = number of purchases / number of customer
3. Calculate your Average Customer Value (ACV) = APV x APFR
4. Calculate your Average Customer Lifespan (ACL) = total customer lifespans / number of customers
5. Calculate your Customer Lifetime Value = ACV x ACL

CLTV Example*

This example comes courtesy of HubSpot, who go into detail in a blog about customer lifetime value, using coffee as an example: 

1. Find the average purchase value (APV)

If you're anything like me, you drink A LOT of coffee. At my local cafe, a large cappuccino costs $4.50. 

2. Find the average purchase frequency (APF)

Again, I like coffee so I buy 2 cups a day = 10 coffees per week.

3. Calculate the average customer value (ACV)

For my local cafe, I represent a value of $45 PER WEEK

4. Work out the average customer lifespan (ACL) 

Working this metric out is tricky, and may require some educated guesses, but let's say I'll continue to use this cafe for 2 years, before I move office and need to find a new favourite spot. 

Once you've figured out the lifespan, make sure the time period matches what you have from part 3. If we are using weeks to measure how much I spend, then break down two years into 104 weeks.

5. Calculate CLTV

Putting everything together, we get:

Customer value ($45 per week) x average lifespan (104 weeks) = $4,680

* It's important to note that this example only uses 1 customer. At each step, you should use all the customers you have data on, or at least enough to come with up an average that is representative of the majority of your customer base. A good way to do this is to export customer and purchase data into a spreadsheet and calculate the averages.

CAC and CLTV

Now that we know how much we spend to acquire a new customer (CAC), and how much the average customer is worth to us (CLTV), we can make a very informed decision about how much our marketing budget should be.

I promise that if you perform these two calculations you will be lightyears ahead of your competitors, most of whom are simply guessing at what they should be spending and how much they are getting in return.

When you combine CLTV and CAC you get a complete picture of how much it costs to bring in a customer, and what that customer is worth to you. In the above example, if the cafe knows its CLTV is $4,680 they have a benchmark to improve on. They can look to upsell to increase this number, try to get me back for more coffee each day, or try and get me to refer some friends and colleagues.

When you look at this metric with CAC, you also give yourself a guide for how much you should spend to acquire a customer, and how healthy your marketing efforts are for your bottom line.

Let's say the above cafe brings in 100 new customers in that 2-year period, so revenue would be $468,000. It also costs them a total of $150,000 to acquire those 100 customers. 

So their ratio of CLTV to CAC is approximately 3:1, which represents a very healthy business. They are spending enough money to bring in new business, and in theory (if their pricing strategy is good) they should be profitable.

They now also know that they could afford to spend a bit more in marketing to try and increase the number of customers they are closing.

One final note: CAC and CLTV, while very good metrics, do not take into account any costs involved in servicing a new customer. They only consider what you spent to acquire them.

Going back to the above example, the cafe has a healthy CLTV:CAC ratio, but it will have other costs that need to be paid. Wages for chefs and baristas, electricity and gas, food and drink - these are all expenses that aren't directly tied to acquiring a customer but are needed to service them. So a healthy CLTV:CAC ratio becomes meaningless if all the other costs associated with running the business are too high.

Minimising Your Customer Acquisition Costs

Having the ability to achieve more with less is a vital skill for any marketer and business owner. And while you may think your results now are great, chances are there is always room for improvement.

Using CAC as a measure of success is a great tool, as it gives us an indication of where we are now and can provide motivation to find ways of getting better. If you're using CAC to measure your efforts, here are a few ways you can lower your acquisition costs:

1. Boost your conversion rate

Getting people to your website is only half the battle - turning them into leads or patients is the other half. For many health and wellness businesses, improving your ability to convert visitors is the quickest way to improve your CAC and lower costs. After all, you've already spent time and money getting people to visit you, so if you can improve the number of patients you get for the same amount of marketing costs, you'll see an improved CAC.

2. Increase your CLTV

Another way to improve your CAC is to increase the value each patient represents to you. Maybe you can find a way to upsell them to a new product or service, or get them to refer new patients and clients to you? We'll cover patient retention as a conversion strategy in more detail in a later section of this guide.

3. Improve your current strategy

Sounds obvious, but when was the last time you took a deep dive into your current efforts and the results you're getting, in the hopes of finding opportunities for improvement? In our experience, prioritising testing is one of the best things any business can do to grow faster and cut back costs.

Developing a Customer Acquisition Strategy

Right, so you want to get started with some deliberate patient acquisition attempts, but don't know where to start. Let's go over some actionable steps you can take to come up with a plan:

1. Identify Your Persona(s)

The first step is to figure out who your ideal patients are so that you can target your efforts towards them. If you haven't built your customer personas yet (sometimes referred to avatars) check out this handy guide on creating buyer personas.

If you do already have your personas worked out, awesome! Use these to figure out who you'll target and what you need to know about them. 

2. Identify Your Goals

When it comes to patient acquisition, your usual target is more patients, and more revenue, but this isn't always the case. For some businesses, you might be looking for trial users to help you work out the 'kinks' of a new service before it is available to the public (gyms and personal trainers do this to test new workout and fitness programs with a small group).

3. Calculate Your Key Metrics and Benchmarks

Before you get started planning your strategy you should take the time to work out your CAC and CLTV, as well as any other benchmarks that may be useful in not only planning your acquisition approach, but also in monitoring performance and understanding when things are going astray.

Once you work out your starting points, note them down somewhere for future reference - you should be checking performance against benchmarks on a regular basis, most likely monthly, to get a feel for how things are progressing.

4. Pick a Channel

You might need to circle back to this after we go into more detail on the specific channels and tactics below, but you should at least have some idea of where you want to spend your time, effort and money. Be aware of your customers and where they spend their time online, and how they find and consume information.

If you haven't already, read our beginner's guide to lead generation for healthcare businesses to get an understanding of how to find your ideal patients and clients online and what channels you can use. 

5. Develop a Strategy for Each Channel

Once you've chosen a channel, you'll need to plan out how exactly you plan on using it to acquire customers. After all, how people behave will vary from channel to channel and platform to platform. Not only that, but their relationship with you also changes, and you'll need to keep this in mind when using each channel.

For example, if you want to use social media you'll need to figure out what content your audience is looking for, and come up with a plan to create it. 

If you decide to run paid ads on Google you'll need to figure out what information your audience searches for, and the terms they use when searching for it. You'll also need to develop ads, build a specific landing page and so on.

6. Plan to Track Everything and Monitor Performance

It's important that you carefully monitor the performance of your efforts as you would any marketing activity. You should be monitoring your total spend and results per channel, and ensuring KPIs are being met. You also need to regularly calculate your CAC and compare with your benchmarks to ensure you're efforts are actually providing a positive return.

Customer Acquisition Channels and Tactics

HubSpot offers a simple way of defining customer acquisition channels:

Customer acquisition channels are methods, platforms, and strategies through which companies attract new fans, readers, and leads. The best channels for your business will depend on your audience, resources, and overall strategy.

Below are some of the more common channels small businesses can use to acquire new customers and nurture existing leads. 

Email Marketing

Possibly one of the most powerful channels available to health and wellness businesses, email marketing has been shown to return $38 for every $1 spent. Not only can it help generate revenue, but it is also a great way to stay in touch with leads and customers and can help achieve business goals other than revenue, such as positioning the brand as a thought leader by sharing blogs you’ve written, or by building an online community by promoting causes your business is involved with.

Email marketing is also a great way to gather intelligence on your target audience. By tracking link clicks you can start to gauge what topics your subscribers are most interested in. By tracking open rates you can start to determine how often they want to be communicated with and what piques their interest, as determined by your subject line’s ability to get them to open your email. 

When it comes to acquiring new patients through email, the key is to provide value to your readers in every email. Remember, they handed over their personal information for a reason, and this level of trust needs to be repaid. Here are some quick and easy ideas you can implement immediately:

- Are you publishing blogs? Email your subscribers and leads to help them solve their problems and showcase your knowledge.

- Are you launching new products and services? Tell your leads about it, you never know who will be interested in buying it. 

- Are you taking on new patients or clients? The majority of your emails should be helpful, but you should also be regularly sending 'sales' emails where the goal is to get the reader to take the next step towards becoming a patient or client.

Content Marketing

Content marketing is a great way to acquire patients as it serves many purposes: it helps you get found online when your audience is seeking information and answers, it showcases your knowledge and builds trust, and provides multiple teams with information (content can be hosted on your blog, shared across social media, included in emails, and used by your sales team).

Content marketing usually comes in the following formats:

- Blogging

- Lead magnets/content offers

- Video

Blogging is a great lead generation and patient acquisition tool that every business should be looking to use. It allows you to showcase your knowledge and expertise, provides useful content for sharing across social media and emails and provides value for your subscribers and customers.

Creating lead magnets is a way to further capitalise on blogging, adding a way for blog readers to become leads by offering high-value additional resources in exchange for their personal information. These leads are then nurtured by your patient acquisition strategy.

Finally, video gives you access to a new medium to share your story and knowledge. While your content may begin life as a blog, there's no reason it can't become a video for you to share with your audience.

Now, it may seem like content marketing is more of a lead generation strategy, and while it certainly is great for attracting visitors to your website, it also plays a crucial role in acquiring customers. 

Content marketing allows you to provide ongoing value to leads while asking for nothing in return. By consistently showcasing your expertise and helping leads solve a problem, you position yourself as the go-to provider when they are ready to buy.

Partnerships

Partnerships are another tool for acquiring new patients. Here’s how they work:

Firstly, you want to find an existing business that has a decent patient and/or subscriber base and think about how you can help their customers even further.

For example, let's say you're a physiotherapist and you specialise in sports rehab, specifically in back pain. Your ideal client is an amateur, yet avid, sportsman who plays regularly in organised competitions. While they will never earn a living, their chosen sport is a big part of their lives and the ability to play well and for a long time is very important to them. So much so that they are willing to pay good money for rehabilitation and preventative physiotherapy.

Now let's imagine you've just found a golf podcast with a decent following. You reach out and ask if they are looking for new guests, and explain how your specific knowledge related to treating and preventing back pain (a common complaint amongst golfers) would make you a perfect guest for the show. Back pain is a complex issue, and with so many muscles involved in a golf swing, helping break it down in simple terms could really help the show's listeners.

The hosts agree, and you come on to talk about the importance of proper warm-ups, what to do to prevent injury, and some at-home techniques for treating minor injuries. You've provided great value to the podcast listeners (a win for the hosts) and also gotten yourself some exposure amongst your ideal clients (a win for you). The next time they have back pain, hopefully, they remember you and book in for a consultation session.

This is just one example, and partnerships can take many shapes and forms - the important thing to remember is there must be an equal exchange of value between the two partners.

Events

Events are an underutilized patient acquisition channel, especially for small healthcare businesses. Having worked in the events industry for some time I understand the hesitation - event involvement, particularly paying to be a sponsor, can seem like a large investment (both time and money) for little return.

Usually, this preconceived notion of little to no return on investment is unfounded, and businesses that get involved in the right way often see great results.

There are three ways events can help acquire customers.

The first is simply attending an event. Events are great networking opportunities that a lot of large businesses use very well. 

Secondly, you can become a sponsor. This is a good option as it gives your business exposure to your target audience. 

Finally, you can host an event. While this definitely isn’t for everyone, for those businesses that can put together an industry event, the potential to generate revenue directly from the event, or from the new prospects that come out of it, is hard to dismiss.

Referrals

Referrals remain a strong acquisition channel for businesses of all sizes. A lot of businesses disregard referrals and instead choose to pursue the ‘flashier’ tactics like Facebook advertising and complicated Google Ads.

That is not to say these channels don’t work, but leveraging existing, loyal customers as a way of bringing in new business is something every business owner and marketer should be doing.

Social Media

Organic social media is often viewed as a ‘vanity’ channel, something that looks nice but doesn’t impact the bottom line. In fact, 13% of marketers have said social media is a waste of time.

But organic social media can play a part in customer acquisition, provided you use it properly.

Organic social media is a great way to build brand awareness, delight and educate your followers with helpful, branded content and is a powerful channel for showcasing your brand personality. It’s also a great way to leverage your followers to help bring in new customers.

Going viral is considered the holy grail for social media marketers. Having your content shared over and over, reaching tens of thousands of people (or more, if you’re lucky) is a huge win for any brand using social media.

Search Marketing

You might not think of SEO as a customer acquisition strategy, but in reality, it can be one of the most effective tools in your arsenal for attracting visitors and closing customers. 

Think of it like this: when someone in your target audience is searching for an answer, and that question relates directly to a keyword you want to rank for, wouldn't it be great if your website showed up on the first page of the results? 75% of searchers only ever view the first page of Google, so if you can get yourself on page 1, you'll improve your chances of acquiring customers.

Google Ads

Running Google Ads, for those who can afford it, is an easy way to ‘pick the low-hanging fruit.’ When someone is actively searching for a product or service you offer, Google Ads gives you the chance to get your brand and message in front of them at the crucial moment.