Everyone loves a neat number. That’s why MER gets adopted fast—and calculated wrong even faster.
A team pulls revenue. A team pulls ad spend. Someone divides one by the other, calls it “the marketing efficiency ratio,” and starts making scaling decisions like the universe just handed them the truth.
In telehealth, that’s a quick way to scale confusion.
Because how to calculate MER isn’t the hard part. The hard part is deciding what counts as “revenue,” what belongs in “marketing spend,” and how to interpret the result in a business where conversions can lag, approvals can delay revenue, and retention is half the model.
If MER is going to be your business-level scoreboard, you need to calculate it like you actually plan to trust it.
The MER Formula Explained
Let’s start with the clean version:
MER = Total Revenue ÷ Total Marketing Spend
If you spend $200,000 on marketing and your business produces $600,000 in revenue during the same period, your MER is 3.0.
That’s the moment where most teams stop.
But “3.0” only becomes useful when it means the same thing every month. If your revenue definition shifts, your spend definition shifts, or your timing doesn’t align with business reality, MER becomes a mood—not a metric.
MER works when it’s consistent. It becomes dangerous when it’s convenient.
Determining Total Revenue in Subscription Models
In a typical e-commerce flow, revenue is fairly direct. Someone buys. Revenue books. The marketing story is clean enough to survive a dashboard.
Subscription healthcare is not built like that.
A patient might click today, start intake tomorrow, get approved later, and only then generate the revenue you’re counting. After that, the real economics often show up through renewals, refills, add-ons, and follow-up cycles—depending on the care model.
So the first decision you make is not the formula. It’s the revenue boundary.
For MER, the most defensible approach is:
Use revenue realized inside the reporting window.
Not projected lifetime value. Not “expected” renewals. Not what you hope the cohort will do later.
Realized revenue. In the period. Clean.
And because telehealth is a real-world operation (refunds happen, chargebacks happen, support issues happen), the responsible version is:
Use net revenue where possible.
If your marketing scales and refunds increase due to downstream strain, MER should notice it. Otherwise, you’ll congratulate marketing while the business bleeds out quietly in operations.
That’s not measurement. That’s denial with better formatting.
Determining Total Marketing Spend
This is where teams accidentally flatter themselves.
Some businesses calculate MER using only paid media spend. That’s the “looks amazing in a slide deck” version of MER.
But if your growth depends on more than ad invoices—and it does—then MER should reflect the real cost of producing demand.
A simple test:
If the cost primarily serves to drive acquisition or conversion, it belongs in the marketing spend.
For most telehealth growth teams, that means “Total Marketing Spend” isn’t just Meta and Google. It’s also the costs that make those channels work:
- creative production and iteration
- agency or specialist retainers tied to performance
- influencer/affiliate payouts and management costs
- conversion tooling that directly supports acquisition campaigns
No, you don’t toss in clinical payroll and core engineering and call it marketing. But you also don’t pretend acquisition is “just ad spend” when everyone knows the machine has more moving parts.
This is one of the biggest gaps between marketing efficiency ratios, e-commerce norms, and healthcare reality: e-commerce brands often keep MER “media-only” to quickly compare channel efficiency. Healthcare growth is more complex, more regulated, and more operationally sensitive. Undercounting acquisition costs doesn’t make you efficient. It makes you uninformed.
What Is Blended MER?
Blended MER is the version leadership should care about.
Because channels don’t operate as independent islands. In telehealth, they collide, overlap, and often rely on each other to do the job:
Content builds trust that improves paid conversion.
Creators normalize the journey, which reduces hesitation.
Branded search eliminates the need for other channels.
Email and lifecycle messaging change repeat behavior, which in turn affects revenue per acquired patient.
So if you try to “assign” revenue cleanly to one channel and call that truth, you’re going to make the wrong calls with total confidence. That’s the most expensive kind of wrong.
Blended MER solves that by moving beyond the attribution debate. It measures the system:
Total revenue output versus total marketing input.
That’s why blended MER is the KPI you use for scaling decisions, while channel metrics remain diagnostic. Channel ROAS tells you where to tune. Blended MER tells you whether the engine is improving.
MER in E-commerce vs Healthcare Models
The formula is the same, but the behavior underneath is not.
In e-commerce, MER mostly reflects near-term transaction efficiency. The purchase cycle is shorter, the operational chain is simpler, and attribution windows catch a larger slice of reality.
Healthcare brings two factors that distort naive MER interpretation:
Time and friction.
Time: conversions and revenue realization can lag because clinical review and fulfillment don’t move at the speed of “add to cart.”
Friction: regulatory and operational steps introduce drop-off points that marketing cannot “optimize” with a new headline.
So in telehealth, MER doesn’t just reflect marketing performance. It also reflects whether the business can convert and retain the revenue generated by marketing.
That’s the platform-level insight most growth blogs skip.
If MER drops after you scale spend, it may be due to traffic quality. But it might also be that your intake flow can’t handle the volume, or that support response times have slipped, or that fulfillment delays have increased refunds. Telehealth growth is a system. MER is one of the cleanest ways to see whether the system is holding.
Real Calculation Example
Let’s do this in a way that actually resembles a telehealth business.
Say you’re evaluating MER for one month.
Your realized revenue includes:
- $700,000 from new patient purchases
- $380,000 from renewals and refills
- $70,000 from add-ons
Total realized revenue: $1,150,000
Now your marketing spend includes:
- $310,000 paid media
- $45,000 performance/agency support tied to acquisition
- $25,000 creative production and iteration
- $15,000 influencer commissions
Total marketing spend: $395,000
MER = 1,150,000 ÷ 395,000 = 2.91
Now you have a number that actually means something—because it reflects the system, not a channel.
If you increase spending next month and MER stays stable or improves, you’re scaling efficiently. If spending rises and MER declines, the business is getting less efficient—and the next move isn’t “increase budget harder.” The next move is diagnosis: traffic quality, funnel friction, operational capacity, retention signals.
That’s what MER is for.
Actionable Takeaway
If you want MER to be decision-grade—not a vanity metric—do one thing before you ever use it in a scaling conversation:
Write down your MER rules.
Define (once) what counts as revenue in the period, and define (once) what counts as marketing spend. Keep those rules consistent month to month. That consistency is what turns MER into a trustworthy trend line.
Then use MER the way telehealth leaders should:
Not as a number to celebrate, but as a signal to investigate.
Because in telehealth, growth doesn’t usually break in marketing first. It breaks at the seams—intake, review, fulfillment, support, retention—and the dashboard doesn’t always warn you.
MER does.
References
- Shopify. (n.d.). Marketing efficiency ratio (MER): What it is and how to calculate it. Shopify. https://www.shopify.com/blog/marketing-efficiency-ratio
- Northbeam. (n.d.). Marketing efficiency ratio (MER) vs ROAS: What’s the difference? Northbeam. https://www.northbeam.io/blog/marketing-efficiency-ratio-mer-roas