Case study
Optimizing marketing spend to maximize ROI
Dental services company generates millions in incremental contribution margin while realizing cost savings
Situation
A US-based dental services company that provided centralized support and equipment to 1,300 dentists and hygienists in 370 affiliated dental offices had experienced declining revenue. The client knew marketing spend was taking up a disproportionate share of expenses but lacked an approach, tools, or appropriate metrics to measure marketing effectiveness within and across geographic markets. They hired our team to develop an optimization model to align marketing spend with ROI.
Candela's Role
Our team evaluated working media spend within and across markets, assessed ROI by campaign and medium within each market and on a macro basis, and developed a market-by-market approach to spend prioritization that accounted for clinic utilization rates and spend dynamics. We also built a marketing optimization model which reallocated spend to the highest potential markets and the most effective campaigns within markets. Additionally, our team recommended ways to reduce the cost of specific marketing levers.
Impact
We uncovered $1.4M of cost reduction opportunities by changing vendors for key communication deliverables. The marketing optimization model identified $11M in incremental contribution margin that could be generated by reallocating existing spend within markets, plus a further opportunity to add between $19-$45M in contribution margin in the longer term through additional marketing investment.
$11M
Near-Term CM
$45M
Long-Term CM Potential
$1.4M
Marketing Spend Savings
