Think about an investment portfolio in the stock market for a minute. Imagine your portfolio containing a mixture of safe long-term dividend paying, global dominating stocks, and some smaller more volatile stocks that could potentially pay off huge.
Whether you invest yourself or have a broker, you understand the importance of tracking your investments and watching how they’re performing over time. After all, this is your hard-earned money and you want to make sure it continues to grow, right?
And if you’re a savvy investor, there’s specific metrics you watch. You will want to know your return on each investment, how much profit you’re making, etc…
What if your brokerage account only reported your returns after you sold your investments? Would you continue to invest without being able to watch their performance over time?
Most likely not. You might as well go to the casino and put it all on black. There you know you at least have a 50/50 chance of winning.
Marketing is just like a stock portfolio…
Senior Living Marketing Must Be Viewed as an investment.
Let’s say you invest $10,000/month in marketing and you get 5 new residents from that budget. Those residents are going to be worth more than $2,000 apiece.
Just like your investment portfolio, you need to track your marketing investments and make sure they’re performing well.
Every Marketing Medium Needs To Be Tracked.
When I say every marketing medium, I mean the avenue you’re choosing to send out your message. Whether this is yellow pages, a referral company, internet marketing, etc... those are your various investments and you need to track them as closely as possible.
There’s many ways to track your marketing efforts.
There’s phone call tracking where every marketing medium gets its own unique phone number so you can track how many calls it produces. Most of these phone call tracking services will record the conversations you’re having for training purposes and report back to you metrics about your phone calls.
If you’re working online you can track with unique forms and analytics to ensure all your various online marketing efforts and even offline to online marketing efforts are being individually tracked.
You can use special promotional codes that allow you to track your marketing efforts. If you’re running a yellow pages or newspaper ad, you can place a specific promo code on there and instruct people to use this code when calling.
Or you can use the low tech way of “asking for Shirley” when they call. This is a call to action to ask for a person named Shirley when they call. Whoever picks up the phone and hears this knows the call is coming from a special promotion and will make a record of it. You can also ask for the person to bring in the ad piece when they come for a tour.
There’s many ways to track your marketing efforts and really it’s really not that difficult, but is very important that you do.
The Two Most Important Marketing Investment Numbers To Watch Daily.
After you start tracking your marketing investments what do you do with the information you gather? What’s important to look at?
I’m glad you asked…
The two most important metrics you need to know are your lifetime resident value and your cost per acquisition.
Your lifetime resident value is the amount in dollars that a resident is worth to you. You simply take the average stay in months and multiply that by average monthly rent. If you determine the average stay is 15 months and the average rent is $3,000 your lifetime resident value is $45,000. This gives you a foundation to work upon, by valuing your residents.
The next important metric is your cost per acquisition. This is simply how much it costs you to acquire a new resident. Using the example I gave earlier in the article, lets say you have a monthly marketing budget of $10,000 and you acquired 5 new residents from that investment. Your cost per acquisition is $2,000 per new resident. Ideally you want to know this number by the different marketing mediums you're using, but using global numbers like I did in this example is a great start.
Cutting Marketing Expenses. The Real Power Of Tracking Your Marketing Investments.
So now, we're tracking all our marketing efforts and we’re beginning to gain insight into how our investments are performing. This is where the rubber really meets the road.
Going back to the stock market analogy, if you were closely watching your stocks and you noticed the riskier high volatile investments were starting to tank on you, you would want to cut your losses and allocate those resources to better performing stocks.
Well the same is true of your marketing investments. Let’s say you’re running marketing campaigns across 5-6 different marketing mediums. You notice that your newspaper inserts are getting a poor return on your investment and they’re costing you $6,000 to acquire new residents which is triple cost of every other medium.
You can now allocate more of your marketing budget into a better performing medium. This is called leveraging your existing marketing budget.
A seasoned investor is always looking to maximize the performance of their investments. With this in mind, we learn a valuable lesson to increase marketing efficiency, cuts expenses and increases profits for our senior living communities.