Forget what it cost. Care about the return

Penny Wise and Dollar Foolish

Too many people fail to maximize on advertising and growth opportunities because they are intimidated by the upfront cost. I do not care what anything cost. I am interested in the return and the risk. . I would not give $50 to get back $45. But I would give $10,000 to get back $100,000. Seems obvious but many practitioners and business people alike are penny wise and dollar foolish. I think this point is so crucial that I need to say it again. When choosing to lay down some cash to build your practice focus on what you will get in return as the basis of your decision and not how much you have to put down.

I will share a case study to illustrate my point.

If I want to advertise a course in www.chinesemedicnetools.com then I need to first think how many people will register as a result from seeing the ad. Let say the course goes for $350. I take out a large ad for $500 in CMT. How many people do I need to register to pay for the ad. In this case only two people have to register to not only pay for the ad but also crate a profit. This is no brainer and something that has little risk and the return comes back fast.

Lets use another example. Let’s say you are a needle supplier. You sell a box of needles (500/box) for $20 and your profit is $10 per box. I assume you understand your business and know how many boxes your average customer will buy from you in a year. So how much profit will each new customer brings to you in a year? Lets make some conservative assumptions and say an acupuncturist goes through 48 boxes a year (10 needles per patient, 50 patients a week and works 48 weeks a year = 50X10X48/500=48 boxes). So if your ad brings one new customer your profit on the needles would be $480 (48*$10). You have to ask the question… how many buyers will the ad bring. Also, in this case it will take a little over a year to make your money back form the ad. If the customer stays with you for the life of their practice (say 20 years) then this as of $500 over 20 years would bring in $2400.

So in making your decision to advertise and the amount to spend you need to think how many “sales” you need to make to get your money back from your advertising investment and also how long will it take. If I think I can make my money back in a year I am usually all for it.

You can apply this to general acupuncture practices too. Just focus on the return.