How Much Money Should a Dental Practice Invest in Marketing?
Marketing is an essential cost in a dental practice budget. Without it, dentists may miss out on a broad audience, thus losing potential patients. This being said, “one size fits all” does not apply to all marketing strategies.
Remember that there is no exact or unique type of marketing that perfectly fits the needs of all dentists. Likewise, the sum of money that should be invested in marketing varies widely from one dental practice to another.
Just because you’re not marketing, doesn’t mean your competitors aren’t either. That means you are going to fall off the radar of the local community and stop being noticed sooner or later. As that happens, you will be losing your patients over time.
Even though there are no exact rules for successful marketing, there are some things which can be applied to all dentists. Read on to learn how to determine your marketing budget and gain more patients without spending a fortune.
Deciding on Your Dental Marketing Budget
Regardless of the practice size, every doctor wants to spend the smallest amount of money while achieving the highest ROI (Return On Investment). Well, this is a big challenge.
When launching a dental practice, there’ll be thousands of things you must deal with on a daily basis. Some of these things are trivial. For example, picking the colour of the chairs in your waiting room will be a fairly easy decision.
However, there will also be more important decisions and more salient questions. One of those questions is: How much money should I invest in dental marketing? As you may assume, the answer will be “it depends.”
We will give some tips to less experienced dentists who have just started a new practice. These tips should help them to get a better idea of how much they need to spend on marketing.
Dental Marketing Doesn’t Have to Be Expensive
Many dentists think that marketing always costs a lot of money. This is a myth. Yes, it’s true that your marketing is more likely to yield results if you invest more in it.
Yet, smart marketing strategies are not trumped by expensive strategies. If a dental practice employs a good team, it is still possible to get value with a modest marketing budget.
The needs of each practice are different. So, one marketing strategy won’t address all the woes. The key to prosperous marketing is to come up with a solution that’s suitable for your needs, demographics, and practice.
Remember Traditional Does Not Mean Quality
The expense is by far the biggest concern for those who work on marketing with a dental practice. Many practices are habitually sold on low-cost marketing options which bring little or no results.
Keep in mind that the ineffective, cheap marketing has a placebo effect. You are feeling good while spending money and believe that you are doing something good for your business. The truth is that the results of such a marketing are insignificant.
That’s because cheap does not always mean you are getting valuable marketing. Just as with any other practice, marketing for dental practices is supposed to give you the most bang for your buck.
For doctors, nothing matters without patients. Let’s assume a cheap marketing campaign gets you exposed to a few thousand people, however, that marketing brings you only one or two new patients every month.
Now, let’s say you’ve doubled your marketing budget, but your business is exposed to fewer people than you have acquired through other dental marketing strategies. It can make you feel like you have gotten a raw deal.
But remember that this small group is likely to be more interested in your offers and services. As a result, you will get more patients out of that group.
Replace Traditional Marketing Methods with Inbound Marketing
Instead of relying on TV commercials and billboards, more and more practices are switching to inbound marketing. This marketing technique includes content marketing, email marketing, social media marketing, website design, branding, and search engine optimization (SEO).
It can help you convey your message to people who are really interested in your services. Through this targeted marketing, dentists can get high return with low risk. That makes inbound marketing more valuable than cheap methods that most dentists buy into.
Try to Find Your Ideal Marketing Percentage
It’s a good idea to create a percentage-based budget. But how to know which percentage is right for you? The answer will give you an idea of how much money you need to spend on marketing.
It’s not wise to give exact numbers since there are so many variables. Nevertheless, we will give you some numerical idea. Is your practice new? Is your business goal to attract new patients and get the name out there?
If so, an ideal marketing percentage should be somewhere between 20% and 30% of your gross revenue.
Bear in mind that this number will change depending on the local competition. If your practice is facing tough competition, your percentage needs to be closer to 30%. This means you should invest more money into your marketing.
In event of light competition, dentists can grab market share by spending 20% of their gross revenue on dental marketing. That will still do the trick.
Bonus Tip: Assess your competition and rate its level from 1 to 10. That number will help you determine your marketing budget. For instance, your ideal marketing percentage will be 27% if the level of your competition is 7.
Save a Contingency Fund
It is advisable to set aside or allocate a sum of money for promotional purposes. There will be business opportunities that are too good to miss. These opportunities usually crop up suddenly, so you need to act promptly. That’s why it is good to always have a contingency fund.
Here’s an example. Let’s say you’ve always wanted to advertise your dental practice in a popular local magazine. One day, you have found out that there is a space in that magazine available at 40% off.
What an amazing opportunity to promote your business at a discounted rate! However, this discount will only be valid for a few more days. Now, you understand why it is good to save for a contingency fund.
Factors to Take into Consideration When Creating Your Dental Marketing Budget
When running a digital marketing campaign, the marketing budget needs to be treated as a starting point. It should enable you to consistently thrive and grow, not to make you stagnant.
After setting a minimum budget for marketing, you may consider increasing it afterward. That will mostly depend on how quickly you’re growing. As you discover what works best for your dental practice, you’ll be adjusting your marketing budget accordingly.
Here are the most important factors in calculating and determining your marketing budget:
It has emerged that a properly trained and coached front office staff can increase conversion rates to 80%. Even if you have the best front office staff in the world, your dental practice will never achieve 100% conversion rates.
By the way, conversions higher than 80% aren’t desirable. That is because around 20% of people calling your office will probably not be suitable for your services. For that reason, optimal conversion rates for dental practice should be anywhere from 70% to 80%.
Therefore, it’s worth paying for conversion rate optimization (CRO). The question is, how much to spend on CRO products and services?
You also should determine how much of your marketing budget needs to be allocated to CRO. Spend as much as you can. Why should you spend so much on conversion rate optimization? Because you will get more in return.
Try to understand the operating expenses of your business. That’ll help you determine a proper dental marketing budget.
Most marketing experts regard marketing as an investment. While they are probably right, you may be investing in marketing and not achieving a notable return on investment in the near future.
The goal is to establish a marketing budget that will turn into an investment rather than being an expense.
That being said, be sure to determine your marketing budget based on your operating expenses. Many practices are inclined to determine their operating expenses and leave what is left over for the marketing purposes.
Do not make this mistake! You can avoid it by setting the annual business goals and planning your budget accordingly.
Okay, it’s good to improve your dental office with new equipment and technology every now and then. Do not overdo it though. In the case of increased patient spend, you need to spend more on improving your products, services, and dental office.
But if you’re getting more new patients, then spend more money on marketing.
What You Are Going to Do Next After Setting A Budget for Dental Marketing
You have finally set your marketing budget. What comes next?
Now that you know how much to spend on your dental marketing, it is time to make the first step and get things rolling. Create estimates for running your first email marketing campaign and for launching a website.
That’ll help you to come up with specific numbers that refer to the initial marketing costs.
It can be a daunting task for dentists to build a high-converting website. After all, doctors and healthcare professionals are not digital marketing experts, nor are they web designers.
That means they will probably have to hire an SEO or marketing agency who specializes in designing and optimizing websites for dentists. Your website should be designed based on user experience and innovative SEO techniques.
Once you have your dental website in place, you’ll be able to run a grand opening marketing campaign. One of the best ways to do this is to go with direct email marketing.
After buying email lists of people you’d like to target, get going with a campaign that involves postcards and grand opening offers. It always produces results.
Of course, you should also review other marketing options and strategies. Apart from direct email marketing and website, there are other strategies that should be included in your marketing budget.
These Strategies are As Follows:
- Dental SEO – Link building, content marketing, website updates, and so on
- Social media marketing
- Logo design/branding
- Promotional discounts
- Pay-Per-Click (PPC) marketing
- Review management
It’s necessary to have digital marketing skills for these marketing strategies, so your best bet would be to engage experienced digital marketers. The majority of these strategies will be ongoing, meaning you will have to pay a monthly fee for SEO/marketing services. How much does it cost?
Many dental practices spend from $1,000 to $5,000 per month on online marketing. Plus, they spend about 2% revenue for internal marketing, which includes rewards programs and discounts for their patients.
Logo creation requires an initial investment of about $5,500. And there are also occasional expenses related to office improvements.
Keep in mind that the amount you’ll spend on dental marketing is going to depend on a number of factors. The two most important factors are your competition and your goals.
When searching for a dental marketing agency, be sure to choose one based on the consumer ratings and reviews. This ensures that you’ll be working with a good, reliable agency and avoid getting ripped off.
For new dentists who’ve just started a dental office, the above-mentioned marketing expenses may seem very high. But if your marketing budget is small compared to your competition, it doesn’t mean your business cannot grow and thrive with current resources.
As your practice grows and develops, you’ll be implementing more marketing strategies. Marketing can’t make you successful overnight, however, once you start prioritizing your marketing strategy, you’ll be amazed at the ROI and growth you see.