Attracting new customers is a costly and time-consuming exercise, requiring significant marketing investment. This isn’t made easier by the fact that acquisition costs have increased nearly 50% over the past five years.
Calculate your customer acquisition costs and lifetime value
First, calculate how much it costs your practice to acquire each new client. The easiest approach is to divide the amount you spent on acquiring new customers by the number of customers acquired over a specific period. Therefore, if you spent $50,000 over a year and gained 50 new clients, the acquisition cost is $1,000 per client.
Whether this $1,000 acquisition cost is worthwhile comes down to the client’s lifetime value: the total amount of revenue they bring into your clinic. The higher the lifetime value, the more cost effective the initial acquisition cost becomes.
Ideally, aim for a lifetime value to cost of acquisition ratio of 3:1. So, for a client that cost $1,000 to acquire, they would need to spend at least $3,000 for it to be a worthwhile acquisition.
In addition, the other key factor is your customer churn rate. For the average veterinary practice, 20% of clients are considered lapsed, meaning they haven’t visited the practice in 18 months. This impacts both the customer lifetime value and the acquisition costs on your practice profitability.
Explore how patient recapture can help
Invest in recapturing lapsed patient to maximize your customer acquisition and lifetime value ratio.
Our results show that practices implementing a patient recapture program see approximately 164 patients return, resulting in $30,907 of additional revenue.
Therefore, patient recapture costs are often a fraction of the cost of acquiring a new one. For example, with the Covetrus recapture program, you only pay for patients that return to your practice. Compare that to usual acquisition activities, where you pay for advertising and marketing whether it brings in clients or not.