How To Determine The Perfect Marketing Budget
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- Michael Harrington
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1 How To Determine The Perfect Marketing Budget Find out where your practice is wasting money on marketing, and then discover what an optimal marketing budget for your practice looks like.
2 Table of Contents Are You Wasting Money On Marketing? Is Your Practice Ready For Marketing? Why You Must Spend Money To Make Money Determining How Much To Spend Prioritize Your Strategy For Ultimate Growth Why You Must Track Your Efforts For An Optimal ROI Utilize A Stair-Step Approach To Climb To The Top
3 Are You Wasting Money On Marketing? Marketing and more specifically how much to spend on marketing is a big topic for most dentists. It can be confusing and overwhelming to know if you re on track with your marketing budget, and unfortunately, that means many dentists end up estimating incorrectly. That said, the most successful practices out there the ones that are smashing it against corporates and showing better growth overall are the ones who know how to set the perfect marketing budget. There is immense power when you know and feel confident in the amount of money with which you market. Even better, an optimal marketing budget results in a sizable return on investment, which means more patients and more income for your practice. In this Insider Guide, we ll help you discover where you re wasting money on marketing, as well as determine what an optimal marketing budget for your practice looks like. Whether you re taking a do-it-yourself approach, or you re getting hands-on help from an outside company, this is powerful information you re going to want to use to determine the perfect marketing budget for your practice.
4 Is Your Practice Even Ready for Marketing? There are countless ways to market your dental practice. From Google Ads to direct mailers to TV commercials, how does a dentist even begin to choose how and thus how much to market? At Firegang Dental Marketing, we look at which marketing platforms result in the highest return on investment. Right now, that is clearly online marketing. According to Yelp for Business Owners, 85% of people use the internet to find local businesses. If nearly nine out of ten people are searching for your practice online (including those high-value cases), then this is sensibly where the bulk of your marketing budget should go. But what s the magic number? How much should you actually spend on your online marketing budget? Before we hone into what that exact number should look like, it s important to set the foundational elements. Specifically, we want to ensure your practice is marketable before we begin investing in SEO or Google Adwords. When we talk about the foundational elements, we are referring to aspects such as: the new patient experience the professionalism of the front office staff your practice's strong reputation success with word-of-mouth marketing
5 Is Your Practice Even Ready for Marketing? Without a strong foundation for your dental practice in place, you will not see the highest possible return on your marketing investment. Take a look at how all the pieces of your practice fit together, or call in the experts to look at the big-picture of your office and offer suggestions for growth if needed. Then, with the foundational elements in place, it s time to look at an optimal marketing budget for serious growth and transformation. Just like a house with a poor foundation, your marketing efforts will collapse if your practice has not invested its foundational elements.
6 Why You Must Spend Money To Make Money You want to grow your dental practice, and you want to do it for as little money as possible. We get that. It s not just smart, it s good business. But here s the thing. Your dental practice cannot reach its optimal success for free. For one thing, nothing in life is truly free. Even if you plan on only marketing your practice through word-of-mouth marketing, you still must invest in training your staff, providing a convenient location, and offering a five-star new patient experience. Often dentists tell us they have a friend or family member who is not experienced in online marketing, but is willing to help out as a favor. Ultimately it is up to you if you trust the expertise of that individual, but like everything in life, you get what you pay for. Think about your dental patients. They might choose a lackluster dental practice down the road if it means they get to spend less money today, but we all know what happens in just a few months time. The filling falls out or there are problems with the implant, and that very same patient is then calling your office for an emergency appointment. In the long run, this patient spent more time, money and stress on a problem that could have been entirely avoided by doing their research and investing in a top-quality practice from the get-go.
7 Why You Must Spend Money To Make Money The same is true of dental marketing. You can try to cut corners and save today, but in the long run, you will be better off in investing an appropriate amount to a marketing budget that actually works. What s more, your practice only has a finite way to grow if you are not willing to invest any money in your marketing. If you are serious about scaling your practice, then you will not want to be limited by these free options. Max out and utilize low-cost marketing avenues to their fullest, but don t depend on them to skyrocket your production alone. So now that you know you need to spend something on dental marketing, let s get into the nitty-gritty of just how much.
8 Determining How Much To Spend Now you know it is crucial to invest in marketing if you want to reach your goals and have your ideal dental practice. Whether your ultimate lifestyle means reducing the number of hours you work, no longer accepting emergency cases, or anything else, knowing how much to spend on your dental marketing is what will help you to turn this ideal into a reality. So what do the experts suggest for the marketing budget of a mature dental practice? The Small Business Association suggests 7-8% of your revenue should go towards marketing, if revenue is less than 5 million. Firegang recommends that in order to stay competitive, dentists must spend at least 5-7% of revenue on a strategic marketing budget.
9 Determining How Much To Spend For example, if your revenue is less than $500,000 annually, your practice should be spending a couple of thousand dollars a month, up to $2,500 for strategic marketing implementation. There is of course no one size fits all answer to the question. If competition is increasing, patients are slowing down, or the average age of your patient base is increasing, then you might consider investing more in your marketing. If you want the money you spend on marketing to actually scale your practice, then of course you do not want to blindly throw your money on marketing that is not going to result in a significant ROI. Let s look at how to prioritize your marketing budget so that it brings in results that work for your practice.
10 Prioritize Your Strategy For Ultimate Growth If your practice is bringing in $500,000 in revenue, then how can you possibly compete with a multi-million dollar practice? Your marketing budget will be inherently smaller than that of the larger or corporate dental practices if you are following the 5-7% of revenue rule. The answer is prioritization. Go through all of your marketing options with a strategic approach, and then choose the right strategy for your practice. Don t be one of the many dental practices to get this wrong by not looking at the big-picture approach. Prioritize your marketing strategy for a plan that actually works.
11 Prioritize Your Strategy For Ultimate Growth First, there are marketing tactics. These are the little things, such as purchasing ad space on Yelp or engaging with patients on Facebook. But a marketing tactic is not a strategy. As a dentist and business owner, it is crucial to think about the overall marketing strategy that will allow you to meet your ultimate lifestyle goals. For example, maybe you want to work with less insurance companies and instead offer premium, spa-like service to an upscale clientele. Your strategy would be to uplevel your marketing strategy to successfully attract premium service clients. One of your tactics to achieve this might be redesigning your website to convey a boutique, high-level brand. Go through all of your marketing options with a strategic approach that is focused on helping your practice to reach its ultimate goals. Though in the beginning your budget might be smaller than the competition, that does not mean you cannot scale and grow with the resources you have. We ll talk more about where to specifically allocate your budget in a moment, but first, let s go over a fundamental step in any marketing strategy: tracking the results.
12 Why You Must Track Your Efforts For An Optimal ROI You might think that a certain strategy or tactic will be the best use of your marketing budget, but if you are not tracking the results to see what is working (and what is broken), then how will you know for sure? At Firegang Dental Marketing, we know that the only thing that matters is getting more patients in your chairs. And if you aren t getting more quality patients, then something isn t working. Properly tracking your results will tell you exactly what tactics of your marketing strategy are working, and exactly where you are wasting money. You ll discover the best places your marketing budget is working for you. And at the end of the day, tracking equates to knowing precisely how many new patients you re getting from your marketing strategy, whether that number is growing or shrinking and (if you work with a reputable marketing company), what you should do next. Typically it takes around a year to accurately measure results. There are no overnight results with marketing, so it is important to consistently analyze marketing results before changing strategy too quickly.
13 Why You Must Track Your Efforts For An Optimal ROI After a year, we suggest removing budget allocation from what is not working and investing it into the strategies that are. Not tracking where your marketing budget is going and how well the strategy is performing is akin to throwing a dart while blindfolded and hoping for the best. The smartest dental practices track everything and as a result, they are beating out the competition, time and time again. Don t be like this man blindly throwing a dart and hoping for success. Track the results of your marketing strategy and then adjust where you spend money according to what works.
14 Utilize A Stair-Step Approach To Climb To The Top If you re not a two million dollar practice, is it still possible to succeed with a limited dental marketing budget? Absolutely. The most important thing to remember is that there is no one-way solution. Determine your strategy based on your goals, and then implement a stair-step approach. It would be difficult to completely overhaul your dental marketing and try to master every marketing approach all in one month. It s also highly unlikely you would get the results you want. However, by utilizing a stair-step approach, you can come up with a strategy that works for your practice over time. If your dental practice is bringing in less than $500,000 a year, start by allocating your marketing budget towards your internal marketing. Then, tackle your website, the foundation of everything else you will do. We guarantee that potential patients are going to start with your online reputation and website, so this is where the bulk of initial investment should go. Once your website is strong, then it s time to get in front of new patients. You already know these patients will have a great experience with each and every interaction of your practice, so let s drive qualified and targeted traffic. A few methods to consider are: Pay per click advertising Remarketing SEO Facebook Ads
15 Utilize A Stair-Step Approach To Climb To The Top Begin investing in these additional tactics once your practice size has reached around $1,000,000 a year. As your practice continues to grow due to your increased marketing budget, you will be able to continue to climb the stairs and add fuel to the fire. At around two million in revenue, your practice can look at YouTube ads, Twitter ads, Social Media contests, one-on-one consultations...the possibilities for growth are virtually endless! An example of what a stair-step approach to marketing might look like for your practice.
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