Category Archives: Addiction Treatment Marketing

Drug Rehab Centers Marketing Budgets – Out of Thin Air

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First I must tell you I usually need a calculator to add 2 + 2, or if I use my fingers that works too. OK, now that I have your attention let’s talk about marketing and figuring out what a marketing budget should be. I can go and find any financial genius and they can give us all kinds of strategies for coming with the perfect number probably down to the exact penny.

The owner of the business, the CEO usually has the last say in what gets approved and nixed. So let’s say we have a services business, a drug rehab, a hair salon, a consulting firm, an accounting firm, law offices or a graphic designer or you name it, pick the SIC code we want to figure out what it will take to market our business and do so profitability so we can continue to stay ahead of the curve.

Marketing is the Engine that Pulls the Train

Let’s face it, marketing is the engine that pulls the train and sales is the conductor. Without profits we are screwed. So in my world our revenues must exceed our expenses. If that is not the case we are bleeding red ink and if we bleed red ink we probably don’t have a license to print money or do something called “quantitative easing” we are in trouble. So as a benchmark I have come up with a minimum starting percentage of revenue to determine a marketing budget.

Side note on sales, these sales guys can get expensive fast and in my experience it seems like the top 5% will generate about 80% of the profits, another number I pulled out of thin air. They drive expensive cars, eat at expensive restaurants and love ringing up their expense accounts to the max because they deserve it and are entitled, or at least some think so. My point here is marketing should be giving these guys high quality leads ALL the time so we can boost the ~5% top sales producers to a greater percentage, however in my experience accounting is usually has pressure on them to “cut expenses in sales” via marketing and the company winds up sucking wind in the long run if they cannot sustain a steady pipeline. I know this first hand because I lived it.

This percentage is based on my experience and NOTHING else. So I am pulling this number out of thin air, however it seems to work well for a starting point. We need to spend at least 20% of our current monthly revenue on marketing if we are going to get any real measurable results in the first 3-4 months. This marketing budget includes admissions, marketing assistants, VP’s, 800’s, web designers, ad agencies, consultants, market research, social media, SEO, traffic generation, PPC, article writing you name it.
If after spending 20% on marketing and you are getting too much business, start to spend less. On the other hand if you are not making a profit with a 20% marketing budget it is time to do two things, either spend more so you do get enough business to make a decent profit or stop what you are doing and change fast, for example hire a website consultant or a competent internet marketing consultant and start to test other methods of getting revenue going where your expenses do not exceed your revenue.

This is where the rubber meets the road

OK, so some dude (me) who wrote this on the internet says 20% is the good starting number what the heck does he know? He knows very little in the grand scheme of things, but has 30 years experience in business. However what he does know is if you spend for instance $10,000 per week on marketing and you can generate $40,000 per week in revenue that is called a 4:1 MER or media efficiency ratio. (This number HAS TO WORK or we MUST make it work. We must generate more revenue than we spend, period. So what happens when we increase that weekly spend to $100,000? It should generate $400,000 in weekly revenue. Depending on your profit margin this is either a good ratio or a bad ratio. Hopefully you have enough margin it is a “good ratio.”
So let’s say if we have a treatment center that has 100 beds. If we are at a 30% capacity for 30 day stays we have 30 people or 30 residents. If we charge let’s say $15,000 per month for treatment we are currently generating $450,000 per month in current revenue, however we really want to be at $1.5 MILLION per month at $15,000 per head in bed times 100 beds. There are two ways to look at this, are we going to use the 20% marketing spend for the 100 or the 30? Let’s assume that money is really tight since we only have 30 people in a 100 bed facility. If we don’t spend something significant i.e. 10% -20% of the monthly $450,000 we are fooling ourselves that we are really making an impact to get results, the even harder part is we are going to have to spend this kind of money for 3-4 months to begin to get out of the hole.

The thing that we have going for us should we want to generate leads and admissions from the internet is that we can track ALL of our spending and our results. So we will learn very quickly what works and doesn’t work, however we have to be prepared to make at least a 10% – $20% commitment, on the $450,000 we discussed earlier, which can be really painful financially. We have to do something different and do it well if we are going to get a different result.

When I find treatment centers in difficult marketing situations I do my best to explain what is required: web site access, web site tracking, adding content, link building, article syndication, 800# tracking, videos and I could go on. Most centers do not have the experienced technicians and writers and a team that can do this, (I do) or when I tell them what is required they attempt to get it done themselves often, and what I find is I’m waiting around for weeks, to get answers so I can help them. This is NOT acceptable, especially if there is a strong need to boost census from a lowly 30%, or maybe 70 empty beds is ok?

If you are spending 5% of your monthly revenue on marketing and not getting your admissions results, but the marketing you are doing is working why not spend more? Oh, the CFO says we have to “cut back.” Well let’s cut back and we can cut ourselves out of a job too. I will also tell that CFO s/he is not in business to make money and help people and this thing he calls “work” is something of just a “pet hobby” and not a business and he is sucking others into his “pet hobby.” (We can’t help many people with addiction if we are broke). If we operate out of fear of failure chances are we will get there, it’s happened to this search marketing consultant, I speak of personal past experience.

On the other hand, if we boost a 5% monthly marketing budget to 20% and start to get the results and the profits then let’s do more of it and refine the marketing efforts even more. Test different offers, different calls to action, different media….testing……testing…..testing…..success…..roll out! I know this is an over simplification rant of sorts but if we are “going to play it safe” let’s do that in shuffle board and curling, if want to play it safe let’s play it safe when we retire.

When it goes wrong – Change Thinking

So if we aren’t getting the results we want we have to know why. I’ve basically stopped asking these questions to new treatment centers clients since I have found only a handful of centers actually know, how many leads did they get last month, how many did they close, what their cost per lead is and what their cost per admission is? And I must admit, it is not easy to sometimes calculate this stuff since some of the admissions come in on referrals and sometimes the admissions person just plain forgets to ask the person while on the phone, or maybe they just get and answer like, “I found you guys on the Internet.” Tracking the keyword phrase from a telephone number is critical. Did they call us by typing in “Florida drug rehab” or was it something like “treatment centers in del ray beach, Florida that accept insurance?” (We have the technology to do this today, many successful treatment centers are using it).

When we are spending as much as we can on marketing, let’s say 40% of our monthly revenue and we can’t keep our customers and we can’t make a profit it is time to reevaluate the whole business situation. Ask why? How can we do it better? Are we going after the right customer? Do we charge enough? Should we close? As Einstein said, “We can’t solve problems by using the same kind of thinking we used when we created them.” So do something, pick up the phone and call a website consultant or a internet marketing consultant, or do nothing and “play it safe.”

Marketing Psychology 101 – Pain of Discipline or the Pain of Regret?

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This principle could be applied in almost anything in life. The pain of getting an education early in life or the regret later in life of not getting an education, the pain of staying clean and sober or the regret of being addicted or in our case the pain of addiction treatment marketing the regret of having to “double down” on a marketing effort to fill the beds back up.

When you were in high school or college did you ever wait until the last minute to study for the exam? I know I did many times. The pain of discipline of studying a few weeks in advance for the exam was too much to bear, so what did we do? We waited until the night before, talk about the pain of regret! I was the classic student of using this failed strategy year in and year out.

We are now in the 2010 summer and the “party” is on, (addicts are using) meaning treatment center web traffic slows down as it does in December, I know this because I review scores of industry web site analytics every day. While I was at the NAATP annual conference and the West Coast Symposium a couple of months ago business was fairly brisk for many treatment centers even in a very tough economy and this was great to see.

I had several conversations with clients and recommend to them to continue their marketing (pain of discipline) during the flush times to keep the pipeline full. (Better yet create a waiting list). Now, two months later I’m getting stressed clients looking for leads to fill their beds, in some cases it is pure panic. When the beds are empty it becomes even more uncomfortable to spend the money to develop the inquiries that was when thing were flush. This becomes a classic case of pain of regret. Woulda, Coulda, Shoulda.

So instead of waiting until you have beds to fill to do something it is much more effective to put a plan in place and execute on it on a monthly basis. At least 10-20% of your annual revenue MUST go into marketing, online and offline.
For the Pain of Regret Folks – Fastest Immediate Results in Addiction Marketing
Here is the recipe of getting inquiries into beds immediately.

This is might be a little uncomfortable:
Step # 1 Crack open the wallet
Step # 2 Prepare your admissions staff for “incoming”
Step # 3 Set up Google PPC and run ads on Google Adwords (You want traffic, Google has it but it ain’t cheap and it requires professional skills to get it right, while you can get the traffic immediately sometimes it takes months to fine tune PPC campaigns)
Step # 4 Send out an e-mail to your list (if you don’t have a list talk to Josie Ramirez-Herndon of Recovery View who seems to have the addiction treatment’s largest e-mail list of well over 100,000 names) one of the most important marketing concepts you can do is build a list of prospective clients as well as past alumni and target mailings to each. (More on that in another blog post).
Step #5 Get a featured listing on 11,000 + pages of TreatmentCenters .Net and About Drug Rehab (These are addiction treatment pages that are the most relevant to your business)
Step # 6 Buy banner ads on Sober Recovery (probably the most heavily trafficked site in addiction treatment)
Step # 7 Buy Traffic on Google’s Content Network (You can see an example of this on the Google Ads on Treatment Centers.Net .
Step # 8 Call people in your rolodex
Step # 9 Write for Addiction Treatment Publications like http://www.behavioralhealthcentral.com/ and Recovery View to boost your visibility among professionals for possible referrals

There are several more ways to market immediately however these are the first few that come to mind and you can get some immediate results/inquiries over the next 24-72 hours.

In a perfect world we would like a steady flow of clients coming into the treatment center and better yet a waiting list. The way to do this is to build a strong foundation first. I talk about a lot of these techniques in my blog on click the link below in my bio. If you are still stuck in generating leads give me a call and we can come up with ideas together that might fit for your situation. So, I guess the pain of marketing discipline is what needs to be considered so that we have the steady results. Another way to look at it is the more people we can assist in recovery the more people we are actually helping and making the world a better place as well and helping our businesses grow.

Here is a short video from a regular automobile professional guy, Jim Kristoff talking about the Pain of Discipline and the Pain of Regret. A quote from the infamous Jim Rohn, “We must all suffer from one of two pains: the pain of discipline or the pain of regret. The difference is discipline weighs ounces while regret weighs tons.”

My Bad Experience in Marketing – Hire Professionals

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In addiction treatment marketing it is all about testing. Do what works and do more of it, and do it better than you have before. If it does not work, do less of it or cut it all together, or make some major changes so you can test and track it. The name of the marketing game is testing and tracking. If you aren’t able to measure what you are doing, get help fast, really fast.

Over the years we all have probably had a few bad experiences in marketing. I’ve got a story that is about 20 years old so I feel OK about publishing it now. When I was a print broker (I bought and sold large printing contracts in my own company, Peake Graphics, Inc.) I had several large clients one of which was a large pharmaceutical client, household name. They gave me an order of 72 Million coupons to print for them, or 36 million each of 2 versions.

The client and I flew out to the Midwest printing plant and did the press check which was standard operating procedure. I “managed the client” and the printer “managed the press run.” Needless to say this was a lot of paper, more than you can fit into a single 18 wheeler tractor trailer. The client was focused on “print quality” things like color and registration. I was focused on things like getting the client signature and flying back home to New York.

The printer furnished us the “blue line” which is a technical term for “this is what you are going to get before we print it do you want it?” (Once a client sign’s off on this, they own it). Sure thing, the client signed off on it and I was half to way planning my next flight home. The client was so focused on the color (which really didn’t matter because this was nothing but junk mail and not an annual report) he forgot to take a look at the “whole coupon” and actually cut it out of the sheet (and so did I) and was not focused on the “other side of the sheet or the coupon” that he approved the blue line. Long story short, the one version of the 36 Million coupons did not back up correctly the artwork was flopped, hence we created another 36 Million $0.35 coupons unbeknownst to us. But we got the color approved and flew home, meanwhile the presses were running at 1,800 feet per minute. So we had 108 Million coupons being run instead of 72 Million.

For me as the print broker I had only run about 100 jobs before this so I was not the most experienced, but I had all the right intentions, get the client to sign and I was going to see a pay day.

Back in New York, I got the call the next day. “Jim, are the presses still running!?” Yes they were, 24/7 these big web presses never stop unless there is a web break, many of the plants I ran in were 365 day per year shops, forget about seeing your family on Christmas Day. He shouted to me “stop the presses!” (He never used foul language, I definitely would have). I called the plant and told them the problem. But it was too late. 85% of the job was run and in the bindery being cut and ready for shipping to the fulfillment house. Meaning, what the client signed off on was now owned by him. We now have a huge headache on our hands managing the coupon clearing houses in El Paso, Texas some coupons with barcodes and others without and politics of the client and not to mention the $100’s of thousands in dollars lost. (BTW, I still kept the client after this project).

I bet many of us can relate to a similar SNAFU probably just not to the same magnitude, please share some of your own stories in the comments below. In 2006 as I was building my own internet publishing business called My Success Gateway I made many similar mistakes but this time as the client. I wanted PPC for my web products; I wanted SEO traffic for my web site, etc. I hired 3 firms and each time it was a total disaster, I mean financial disaster. I’ve made all of the mistakes that I still see clients making every day, I’ve been there and done that and watched Google vacuum out as much as $4,000 in one day on a single PPC campaign which netted me nothing but a goose egg. The numbers actually get worse but I really don’t feel like going there, I think I’ve made the point.

The Secret of Letting Go

I had to let go of the past. Do you see any parallels here to drug addiction treatment? (Guy Finley, my mentor wrote a book called “The Secret of Letting Go” a fantastic read). I finally figured out that if I was going to hire someone I was going to have to know what the heck I was doing and know what were the right questions to ask. I had to learn this business for survival, because I was not about to enter the oil business, as I had an opportunity to do so and live the rest of my adult life on the road. One of the things I realized was, many of the vendors I found didn’t know what they were doing, however they believed that they did now what they were doing. So they weren’t really trying to dupe me, they were just as clueless as I was which was a really bad combination.

I’m an experiential learner so sitting in a classroom was not going to do it for me. I had to learn from people who actually knew how to do SEO. I stopped doing PPC because it was just too tedious and I had a couple of friends who were masters at it and I’d just use them because for their monthly fee to manage the campaigns it was much safer and cheaper. My point here is I took the time to learn SEO and to be totally honest it is not that difficult. I can teach someone the full basics of SEO in an afternoon.

So in my Internet Journey I’ve had to really learn how to master Internet Marketing, I have spent a lot of time and worked with the very best to master my craft. As a client, I had to learn it or else I was screwed. I realized this as a consultant. My clients must be coachable and trainable and learn how to do this as well, if they are going to get the optimal results. My whole premise is that I must be able to “teach” my clients to fish for themselves. If I do my job right they will become better at this than I and hopefully refer a few new clients along the way.

Do Your Homework and Hire Professionals

On the flip side there are just some either lazy or unscrupulous folks out there who are looking to make a fast buck. I found a company the other day that was marketing themselves as a “Google Certified Company.” I asked my friends at Google, “is there such a thing?” Answer, NOPE.

They can rest assured they might contacted by Google about this “certified company” practice because there is no such certification, usually it is a death sentence in Internet Speak. I can also tell you that every day I am still learning, no one knows it all. What I can tell you is that if I don’t have an answer for it I probably know where to go get the answer, we all have that ability.

So where do we go from here? We chalk up all of our bad experiences to our “informal education.” Probably more expensive than a Harvard Education, but hey, at least we now know what NOT to do. Here is a good question to ask your internet marketing vendors if you are seeking to grow your business. “How many leads in the drug addiction treatment space did you generate last month?” Ask to see some of them. If you like their answers hire them, if not keep searching for the right folks otherwise you will be paying for their education and yours. If they change the subject or go off on another tangent bring them back to this question if you are looking for results, do not let them off the hook.

Finally, I’ll leave you with one of my favorite quotes. “If you think it is expensive to hire a professional, wait until you hire an amateur.” Red Adair

Addiction Treatment Referral’s Lead Generation Holy Grail?

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Quick, what the hottest form of lead generation in the addiction treatment marketing space? Word of Mouth? Internet? TV? Social Media? E-mail? Pay Per Click Advertising? While I don’t have the exact answers for you and it is different for each treatment center and the one common method I keep hearing over and over again is REFERRALS.

Referrals come in many different forms and sizes. They can be word of mouth and Internet and all of the above, but they are referrals nonetheless. Remember back to your first few dates? The dates that were introductions were probably more successful than the picks up’s at the local watering hole, or for Jim Peake, I even picked up a gal on the New Jersey Turnpike Toll Plaza coming back from a weekend at the beach. (It did not work out for very long, that was 20 years ago). I think that because of the “accountability factor” and referred date tended to be a little more responsible.

And in the drug addiction treatment field it is no different than the dating arena, there are stakes involved, big stakes for both the referrer and the referee. So if the stakes in referrals are high why not learn from someone who wrote the book on it and pick up on the nuances so that we can get better at it? I read John Jantsch Duct Tape Marketing for Small Businesses a few years ago and he recently came out with The Referral Engine, Teaching Your Business to Market Itself.

I decided to investigate the book to see if there might be any possible fits in the treatment center arena and Jantsch did not disappoint. At the same time his advice is also relevant to my own consulting business in the treatment center space.

Referrals are the Life Blood of Treatment Centers

To quote John Jantsch in Chapter 1, “There is a tiny part of the brain, the hypothalamus, that – among other things – helps regulate sexual urges, thirst and hunger, maternal behavior, aggression, pleasure, and, to some degree your propensity to refer. The hypothalamus likes validation – it registers pleasure in doing good and being recognized for it, and it is home to the need to belong to something greater than ourselves. This is the social drive for making referrals.” Does this sound familiar?

In my time in working in the addiction treatment field I have noticed that the referrals practice is alive and well in recovery as it is in addiction. (Remember we all knew who had the good weed?) I am seeing referral everywhere for example; therapists referring to treatment centers, on ground marketers sending in leads to treatment centers, treatment centers referring to other treatment centers, Google referring PPC ads, Directories referring leads etc.

Referral leads tend to be much better qualified than cold leads coming in off Yellow Pages or the Internet or anywhere else for that matter. On a side note, if you take for example a keyword search on the phrase “drug rehab” which is searched on 1,138 times per day and “Georgia drug rehab” which is searched on 42 times per day which one do you think will refer and convert a higher quality Internet lead/person to the treatment center in Georgia? So even internet referral leads have different quality scores and admission rates and so too the warm hand off between individuals.

Referrals as a Form of Survival?

Like the keyword example above the same goes true in all the other facets in marketing to treatment centers. So if not all of these referral sources are created equal would it not make sense to treat them differently so that we can obtain the optimal results from each? That is what this Referral Engine book is all about, putting referral systems in place. It is about taking referrals and systematizing them so that the maximum results are gained. With that said, there are time and money resources that are involved in making these referrals easy for the referrers, the easier they are the more we will get.

Why do we do referrals? What are the referrers looking for? In some cases some people want nothing other than a warm thank you. In other cases they have a strong desire to help people especially the ones with the addiction. They want a sense of community, a sense of belonging. Others want money which opens up an ethical can of worms. “Some people just make referrals because they need to and others refer as a form of survival. “ (Page 4)

What?! Holy Toledo! Referrals as a form of survival? Really? I don’t believe it, or I can’t believe it but I continued to read on. Jantsch does seem to support this pretty well throughout the book. He also says that “we refer to connect with other people and to build our own form of social currency.” That seems pretty straight forward and logical and I can get my head around that.

What systems do “we” have in place to manage addiction treatment referrals?

Jantsch did an informal survey with several thousand small businesses and found that 63.4% of them got their business through referrals! Wow, this number goes back to my instinct in the beginning of the article that referrals were big in the treatment business but this is the small business sector. (Slightly different) I would think that the addiction treatment business the 63.4% number is probably much higher just because of the nature of the business and most of us are small businesses to boot.

What was even a bigger glaring statistic (page 11) that 79.9% of the small businesses “readily admitted they had no system of any kind to generate referrals.” I’ve got to admit, that I too don’t have a “system” either for my consulting business. I don’t get my leads from SEO or the internet; I get them from word of mouth. So I too have warm hand off’s from the referrer to client and myself.

So I too need to take some of John’s advice and put my referral systems in place. While The Referral Engine is not a unique book in its topic, it is up-to-date (2010) and can serve as a perfect blueprint for helping treatment centers manage our referrals and improving the lives of many addicts.

Adwords Blame Game

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After coming back from the West Coast Symposium and NAATP one of the things that came to light was the blame game. Treatment Centers blaming other treatment centers for their internet practices like buying keywords on their branded names, which is legal according to Google. I can buy a Google Adwords keyphrase that has the name of another treatment center. What I can’t do is use their NAME in my Google Adwords Ad. (In most cases)

So let’s set the record straight. Stop blaming and start learning. I picked two keywords “beachside” and “mountainside” since they are both descriptive and could both appeal to a treatment center customer. When I punch them into Google you will notice Promises.com comes up first on the example below.

Why? Because they bought the keyphrase Treatment Center. They did not buy the name Beachside Treatment Center. Notice how Google highlights the two words Treatment Center. If you don’t like this practice call Google and complain to them and stop blaming and accusing. They set the rules, Promises or any other paid Google Adwords treatment center does not.
Now if you really want to have some fun type into Google Jo Blow Treatment Center, or better yet Cancer Treatment Center. What do you get? Do you get SOMEONE trying to rippoff their names? Hell no!

The same thing happened to Apple.  They bought the keyphrase Games and Apps and their PPC ad showed up for Sex Game Apps!