In the fast-evolving landscape of healthcare, CEOs face the constant challenge of making informed decisions that drive their companies forward.

Two metrics stand out in this quest: New Customer Acquisition Cost (NCAC) and Marketing Efficiency Ratio (MER).

Understanding these can be a game-changer. These are relevant for both B2B and B2C healthcare companies. Let’s break them down and explore why they’re crucial.

New Customer Acquisition Cost (NCAC)

Definition: NCAC measures the cost associated with acquiring a new patient or customer. It’s a critical metric for healthcare companies to understand their marketing and sales efficiency.


NCAC = Total Marketing Costs / Number of New Customers Acquired

Advantages for CEOs:

  • Budget Optimization: By understanding NCAC, CEOs can optimize their spending, ensuring resources are effectively allocated to both marketing and patient acquisition strategies.
  • Strategic Planning: NCAC provides a clear picture of the investment required to grow their customer base, aiding in long-term strategic planning and goal setting.
  • ROI Analysis: Helps in evaluating the return on investment of different marketing channels and campaigns, leading to more informed decisions on where to invest in the future.

Marketing Efficiency Ratio (MER):

Definition: MER is a measure of how effectively a company is using its marketing budget to generate revenue. It’s a broader, metric compared to ROI as it accounts for total revenue generated, not just profit.


MER = Total Revenue / Total Marketing Costs

Advantages for CEOs:

  • Comprehensive Marketing Insight: MER offers a bird’s-eye view of the overall effectiveness of marketing efforts, beyond just individual campaigns, providing CEOs a holistic picture of marketing performance.
  • Guided Resource Allocation: Understanding MER enables smarter allocation of marketing resources, ensuring that dollars are spent where they yield the most revenue.
  • Performance Benchmarking: MER allows for benchmarking against industry standards, helping CEOs gauge where their companies stand in terms of marketing efficiency and where there’s room for improvement.

For CEOs steering healthcare companies, metrics like NCAC and MER are not just numbers—they are insights that drive smarter, more effective decision-making. Whether you’re running multiple clinics or providing specialized B2B healthcare services, these metrics offer clarity amidst the complexity of healthcare marketing and operations. Embracing these metrics means embracing a path to a more data-driven, successful future.

Engaging Questions:

  1. How do you currently track your marketing and sales performance, and how might NCAC change your approach?
  2. Have you calculated your company’s MER? If so, what insights have you gained?
  3. What other metrics do you find vital in managing and growing your healthcare business?