How to set your dental marketing budget for success
First up, a quick quiz. Do you know:
A. What you’re spending on your dental marketing?
B. How much each new patient is costing you in marketing dollars?
C. Which marketing tools are actually working and bringing more patients in the door?
No? Then straight up we’ll tell you this: you need a dental marketing budget.
And you’re not the only one: many dentists out there don’t have a defined dental marketing budget. Every so often, they might do something that sounds good without any strategy, spend figure or return in mind.
This is just one of the common dental marketing mistakes we see.
But you’re too busy for this, right?
We understand what it’s like – you’re juggling patients and the day-in, day-out running of your practice, so your dental marketing slides to the bottom of the business ‘to-do’ list.
You’re lucky if you get to it late one night. Even then, it’s reactive marketing (like replying to that advertising sales rep), rather than proactive marketing.
If this sounds like you, then you’re a sitting duck for any smooth-talking ad guy looking to scoop up your entire marketing budget (if you have one, that is).
Your vision is probably that they’ll take the budget and do all the work so you can greet lots of new patients, but often this isn’t the case.
So why do you need a dental marketing budget?
The downside of not having a defined dental marketing budget is that you’re not proactively planning and regularly measuring the activities that’ll bring in the best return on investment (aka ROI).
This means you can’t ‘compare apples with apples’, so you have no real way of figuring out whether each of those activities that you tried actually worked or how to prioritise where to spend your money in the future.
The 5% rule
Most dentists want their marketing budget to be as little as possible while bringing in lots more new patients. If only!
Getting real, you probably need to be spending more than you are at the moment. Rather than thinking of your dental marketing as a cost or expense, see it as an investment – it’s a legitimate business-spend category, just as much as staffing, equipment, leasing and training. You are investing in your future income.
Although there is not a ‘one-size-fits-all’ budget a good rule of thumb would be that your marketing budget be approximately 5% of your current revenue, more if you are aiming for growth.
3 take-aways to do now
1 Work out your current dental marketing spend
Write down where you spend money on marketing and how much (monthly or annually).
As a part of this cost, include time spent either by your team members or yourself: calculate an hours x $/hour value. In many cases, if the managing dentist is also doing all the marketing, this figure can actually be quite high.
2 Calculate your patient lifetime value (LTV)
This is the average spend across the lifetime of any patient of your practice.
To help you crunch the numbers, you’ll probably need to work with your practice management software, practice manager and accountant.
Now you can work out a return on investment for each activity against your patient LTV to compare and select your future marketing activities.
3 Decide your dental marketing budget
Now figure out if you want to keep your budget the same as your current marketing spend, increase it or tweak it a little. The activities that should dictate this are the market and economic climate, seasonal changes, and your growth or consolidation plans.
What to do next: budget health check
Review your budget each quarter when you start off. Later you can stretch this out to every six months, but at the very least you should be checking in on your marketing budget annually.
If you’re getting a good ROI for your current budget, why not increase it to try some new marketing activities and compare them to the ones that are working for you.
Burning budget questions?
You can talk to us any time about assessing your dental marketing budget. Contact Connected Marketing so we can help you get more bang for your buck!