Three Hidden “Leaks” Driving Up Your Cost Per Admit

When I ask treatment providers how their client acquisition is going, responses run the gamut.

“Badly,” one owner told me flatly.

Others are more confident:

When I ask the follow-up question – “if you had to tell me your average cost per admit, could you?” – far fewer can answer confidently.

Still fewer can say it’s less than a thousand dollars.

Below, I’ll outline three insights we discovered recently from working with treatment centers. But first, let’s make sure we’re on the same page speaking about what cost-per-admit actually means.

What Is Cost Per Admit?

Say you’re paying for advertising. That could take multiple forms – print, TV, radio, etc – but let’s just take our specialty, PPC, or “pay per click”, because it’s comparatively easy to track.

If you’re getting treatment clients from the web, they have to click to your site before they can become your clients.

Let’s say a click to your site costs you $20 on Google Adwords. (Typical cost-per-click can be much higher, but let’s just use $20 because it’s a round number.)

Next let’s say a typical-of-the-industry percentage is getting on the phone with you once they hit your website. Let’s say 5%.

That means that for everyone who has a conversation with an admissions rep, you’re got to get 20 to your website. If you’re paying $20-a-click, that means a lead costs you $400.

Make sense?

conversion-and-traffic.jpg

Now let’s say that the number of leads who become admits (called the “lead conversion rate”) is typical of what we’ve seen in the treatment industry: 20%. (Actually, that’s far higher than we’ve seen from some centers, but, again, round numbers.)

If two-in-ten leads become admits, that means your admissions reps have to talk to an average of five leads – at a cost of $400-per-lead – to get an admit. For a grand total of $2000-per-admit.

Before we speak about where centers are typically under-converting web-to-admit, let’s quickly outline the reasons many don’t even know their cost-per-admit.

Why It’s Opaque

Say you get a new admit. Awesome! In-patient clients can invest between 15 and 50 thousand dollars for treatment.

Now: could you say for 100% sure how much this client cost you to acquire?

Here are the three reasons many treatment centers couldn’t say:

  1. Some don’t know which lead sources their best clients come from.Sure – some centers have call tracking and dedicated 800 numbers, so they can tell that a particular client found them through a TV spot or a web ad. But even if they do…
  2. They don’t know how much they paid for the click. Many have multiple web ads with multiple keywords, and are also ranking for a number of free keywords that allow clients to find them in Google. If you’re not sure if you paid $17 or $65 for the click, you’re not sure if this client is profitable, nor if you should be shifting resources from other web marketing to “double down” on this campaign.
  3. They don’t know their true conversion rates.  Even if you know how much you paid to get a client to your website, do you know how much you paid to get him on the phone? Or what percentage of leads become admits? Many web campaigns we’ve looked at have “janky” conversion tracking.

Now, let’s talk about the admissions funnels we’ve seen in real life, the “three leaks” we discovered, and the surprising place most centers were losing most of their potential clients.

Leak Number One: Click Through Rates

There are typically three stages to an admissions “funnel”.

If you start at the top with the total number of people searching for you on the web, that may be a relatively large number.

A comparatively smaller number will find you on Google and click through to your site…

A still-smaller percentage will get on the phone with your admissions reps…

And a yet-smaller percentage will become clients.

Pictured visually, it looks like a funnel, hence the metaphor.

Funnel-1.jpg

The first stage is what percentage of people who see your ad click to your site, or “click-through rate”.

A good click-through-rate for the treatment industry is 2.5%.

Many funnels of real-life treatment centers, however, are doing less-than-half-that.

 

Why?

When we looked more closely at centers’ real-life ad campaigns, we identified three culprits:

  1. Poorly organized campaigns. Instead of tight coherence from keyword to ad headline to landing page, many different categories of keyword were “hodgepodged” together into one ad. As such, instead of instant confirmation that she’s found what she’s searching for, a potential client sees a generic ad without the keyword in the headline, and ignores it, or clicks the ads of competitors.
  2. Low “quality scores” are the result of that lack of relevance, and mean google displays your ad farther down the page, or not-at-all.
  3. Poor use of exact match and negative keywords means you’re paying for clicks from searchers with zero intent of investing in treatment, and sometimes clicks from searchers not even looking for information about treatment at all.

With new clients, we typically reorganize campaigns to improve the relevance, and switch over to exact-match keywords, then watch both the click through rates and quality scores improve. (Read a real-world example.)

Leak Number Two: Conversion Rates

Once prospective clients are arriving on your website or landing pages, how many of them are becoming leads, and how many are abandoning the site without-looking back?

A good conversion rate for a PPC campaign is 15% or higher.

Many centers who run traffic to their homepages enjoy only 2.5% to 5%.

That means, controlling for lead-quality, they could be paying up to six times too much for an admit.

We explain in greater depth in this article how to improve conversion rates, but there are three rules of thumb:

  1. Make sure every ad category has its own dedicated landing page, with the keyword in the headline.
  2. Make sure you’re giving the visitor just one action to take above-the-fold: usually to enter his/her email address in as-few-steps-as-possible, then pick up the phone. (Most homepages give visitors between 13 and 16 different choices.)
  3. Make sure your results or differentiators are clear within a few seconds of landing on the page. A typical visitor will be looking first for confirmation that you solve his problem, then for why he should trust you, and not the competition. Testimonials, typical results, and “unique advantages” (for instance, that you’re the only center certified in a particular therapy), are all good candidates.

Leak Number Three: Lead Conversion Rates

I’ve had center owners tell me they have lead-conversion rates in excess of 50% only to discover, looking at the real numbers, that they’re converting at less than 10%.

It’s a simple calculation: how many leads did you get in the last month?

And how many admits. (We help clients make this calculation for the specific leads we provide from PPC.)

What’s a good lead-conversion rate? We typically shoot for 25%-and-above.

Most everybody we talk to assures us they have a robust phone-follow-up protocol. So why are so many centers converting so badly from leads to admits? Two reasons:

  1. Badly qualified leads. A prospective client is worth zero to you if he/she doesn’t have the means to pay for treatment, either through insurance or self-pay. Another side-effect of bad web ads is attracting unqualified leads, who eat up admissions-reps’ time, and your budget.
  2. Poor follow-up. In direct-response marketing there’s an adage that only about 6% of your site visitors are ready to become a client right now. But many centers aren’t following-up systematically with prospective clients who have one conversation with an admissions rep, and are qualified, but who don’t decide to invest in treatment, especially after the first week. The decision to seek treatment can be a complex one, and if you’re not staying on people’s radar in a systematic way with helpful content and proof elements like success stories, you’re likely to lose them to competitors.

How to Slash Your Cost Per Admit

Now let’s look at the difference in cost-per-admit of a typical treatment center based on clients we’ve worked with, versus what they should be paying to get a client.

Let’s take a hypothetical center who’s paying $5000 per admit. (We’ve had clients who were paying even more.)

Remember the first leak? Click through rate? What happens if, instead of converting at 0.7%, they’re converting at 2.5%?

The cost-per-click will typically decrease by around 30%. (We reduced one recent medical client’s by 33%.)

That $5000-per admit is now more like $3300.

Next, what if they’re converting 7.5% of their site visitors to a particular page into leads, and we double that to the 15% benchmark? Controlling for lead quality, that $3300 per admit now looks more like $1600, since they only have to get half the number of clicks to get the same number of leads.

Finally, what if, instead of converting even 15% of their leads to admits, they convert more like 30%?

That’s the final straw to drop cost-per-admit from the original $5000 +, down to $800-and-change.

What’s Next?

Maybe you’ve been reading this, nodding to yourself, thinking “I’m crushing all these benchmarks.”

If that’s the case, congrats. You’re among the small minority of centers doing it right. But I’d still double-check your numbers. Don’t ask your marketing manager just “how well are we doing?”. Ask for the specific numbers we’ve outlined in this article.

But more likely, you’re starting to realize either you don’t know your exact cost-per-admit…

…or, if you do, it’s too high.

If that’s the case, why not let us help?

If you’d like a quick strategy session in which I tell you how your specific treatment center can start getting better results in just weeks just click here.

(I promise zero sales-pitch unless you ask me for one. Many people do;)