Marketing Benchmarking

Market Benchmarking

Using data to maximize profits.

Michelle Collie, PT, DPT, MS

Market research finds health care businesses budgeting 9 percent of their revenue toward marketing.1

Although companies are not consistent with what is included in this budget, this figure does stress the fact that health care businesses spend a significant amount of resources on marketing. The biggest question when it comes to spending resources on marketing is “What is the return on investment (ROI)?” The simplest calculation of ROI is to take revenue growth, subtract marketing costs, then divide by marketing cost.2

Revenue Growth – Marketing Cost) / Marketing Cost = ROI

Most physical therapy practices are challenged with having the time or budget to spend on marketing or are unable to confidently justify spending such resources. Time spent developing relationships with doctors, investing money in a website, email campaigns to present and past patients, community events, advertising and sponsorship; determining the ROI of the resources we put toward marketing is essential for ensuring our practices are successful.

Benchmarking is a way physical therapy practices can measure the effectiveness and ROI of marketing campaigns; for example, comparing the new patients in the third quarter of 2018 with those of the third quarter of 2019, after implementing a specific marketing campaign. With additional data we can more effectively manage marketing resources and quantify the value of our time and money on our practice’s profitability. How effective was a marketing campaign that targets gaining patients through word-of-mouth recommendations? Did a community lecture lead to new patients? Should I sponsor this road race again? Is lunch with a referral source worth my time? Answers to these questions will maximize the return of time and money spent on marketing. To effectively utilize data and benchmarking to maximize profits, we need it to be meaningful and accurate. With the input of industry leaders, the PPS Marketing and Public Relations Committee has devised a system to classify new patients who come to our practices. This system allows for internal benchmarking and in the future has the potential to allow practices to compare and benchmark with each other.

The tiered categorization system is based on primary, secondary, and tertiary influencers for why a patient came to a practice. The primary influencer is determining if the patient came to physical therapy (a) because a physician referred or recommended physical therapy or (b) the patient sought out physical therapy without seeking the advice or recommendation of a physician. The secondary influencer is based on factors that influenced a patient decision to come to this particular clinic or provider and can be categorized into: returning patient, advertising, word of mouth, location, and insurance. Many of the secondary influencers can be further broken down into tertiary influencers (see Figure 1).

Let’s consider some examples:

  • A patient is referred to physical therapy by a physician for low back pain. The patient chooses to go to the practice his wife went to in the past. The primary influencer is physician, secondary influencer word of mouth, and third influencer is friend/family.
  • An athlete is searching online for how to manage her knee pain and ends up on a local physical therapy practice’s website and decides to seek services. The primary influencer is patient directed, the secondary is advertising, and third is web.
  • A middle-aged man drives past a physical therapy practice each day, reminding him that he should go to physical therapy. He schedules an appointment with his physician to get a referral. The primary influencer is physician, the secondary influencer location, and the third is signage.

Ensuring this data is not only collected but also accurate is essential if it is to be used for internal benchmarking, measuring the effectiveness of marketing initiatives, and planning which initiatives are the most valuable to implement. The appropriate system and method for a practice to gather and organize this information will vary based on the practice’s size and resources, current processes and systems in place, and the capabilities of software already being utlized for practice management.

Integration of a categorization system for patients based on a tiered influencer system allows a practice to collect meaningful data. This data allows for benchmarking and for practices to truly understand the financial impact and ROI of marketing campaigns and initiatives. This information allows practices to make strategic decisions on spending marketing resources, ultimately improving margins and maximizing profitability.

Want to learn more? Attend the Marketing Benchmarking: Using Data to Maximize Profits at the PPS annual conference. Presentation by Michelle Collie, Scott Wick, and Darren Rodia.

Figure 1: Categorization of Patient based on a Tiered Influencer System


1Leone C. How much should you budget for marketing in 2019?

2Beattie A. How to calculate the return on investment (ROI) of a marketing campaign. 2019.

Michelle Collie

Michelle Collie, PT, DPT, MS, is the chair of the PPS PR and Marketing Committee and chief executive officer of Performance Physical Therapy in Rhode Island. She can be reached at

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