Setting a Marketing Budget for your Dental Practice in 2021
Setting a proper budget for marketing and monitoring your results can provide you with a realistic path to growing your patient base and your dental practice in a predictable manner.
By sitthiphong / stock.adobe.com
How do you determine your annual or monthly budget for marketing in a small business? How do you monitor its return on investment (ROI)? Many small businesses use “extra” money at the end of the month to throw at marketing or ads. The problem is that typically means the marketing budget is the first thing to go during downtimes – when it’s needed most.
Thinking back to dental school, there may have been one lecture on marketing. Dental schools nowadays are struggling to decide what to teach and what to leave out of the curriculum - with the myriad new clinical materials, digital equipment, and techniques available to teach. Today’s dental graduates leave school in hundreds of thousands of dollars of debt and are expected to be clinicians, psychologists, leaders, financial gurus, and marketers.
In the 70s and early 80s dentists who advertised, either were thought of as not “good enough” or “ethical enough” to grow a practice by word-of-mouth alone. In the late 90s and early 2000s, dentists who put up websites were considered pioneers. Today, your dental website is one of the cornerstone pieces to your practice.
Five of the biggest marketing mistakes a dentist can make:
- They turn their marketing over to an ambitious staff or family member with 0 marketing training. This often starts with 2-3 posts on social media then disappearing, or an in-office newsletter with limited to no response.
- The doctor does some sporadic marketing themselves to “save money.”
- Try specific marketing modalities once and decide from those results whether those programs “work” or not.
- Paying a large amount for generic marketing without monitoring the ROI.
- Putting together a hodgepodge of ads that have inconsistent or unclear messaging.
Most dentists who have tried some type of advertising or marketing are familiar with 1 or more of these mistakes. Unfortunately, it often reinforces the owner’s opinion that “marketing doesn’t work well.” If it could be made more predictable and consistent, more people would turn it on and off, as they felt they needed more patients.
The good news, is that there is a predictable method for producing new patients, let me tell you how…
But first, two main distinctions that should be made before we discuss this any further
- The difference between advertising and marketing
- The difference between internal marketing and external marketing
Advertising is considered a subset of marketing. It typically refers to the paid portion of promoting your products and services through various channels so people hear about your business or services.
Marketing put simply, is finding out what your customer wants and delivering it to them better than anybody else. It is researching your target ideal client, identifying what they want and need, and then creatively putting it out in the world to attract attention.
Internal marketing is expressed through the employee’s enthusiasm, commitment to your practice mission, and the dialogue they have with their clients. This primarily deals with providing excellent customer service to current clients such that they will stay as clients and refer their friends and family. Clients will stay with you when they feel emotionally connected to you, even when your competitor is undercutting your prices.
Research by the Marketing Score Report shows the following:
- A loyal customer typically will spend 67% more than new ones.
- 82% of companies agree that customer retention is cheaper than acquisition.
- It costs up to 7x more to acquire a new customer than to retain an old one.
External marketing focuses on new potential clients. Realizing it costs so much more to attract and convert a new client, why is it that most offices spend their efforts on this instead of holding onto their current clients?
You have to decide which areas you want to focus on before starting any marketing.
Some dentists are motivated by creating more of a deeper personal relationship with their patients and are good with building their businesses on trust, empathy, and personality. They strive to treat their patients like family and sometimes offer amenities to create a spa ambiance or cater to higher end treatment options and/or simply work on building loyalty and caring relationships with each patient.
The other type of dentist, often more entrepreneurial, wants to keep building their patient base, add a second office, hire several associates, and keep growing. “Bigger is better,” in their mind.
The marketing efforts for 1 office style might not attract the volume or type of patients that the other might want. Therefore, it is important to understand this objective when putting together a marketing strategy and a marketing budget for your practice.
Your marketing budget is also dependent on what stage your practice is in its maturity. In other words, someone just starting out with a handful of patients will most likely need to invest more into marketing until they build some type of momentum or brand awareness in the community. Similarly, dentists sometimes get bored after 20-30 years in practice and decide to do something. This could be adding an associate, adding more advanced procedures to their services, or building up the practice to increase its future sales price. This will require more marketing efforts to expand the practice patient base.
On the other hand, a mature practice with a healthy patient base may be in a situation which may not require much more than some internal marketing efforts to maintain a manageable growth.
2 other factors affecting your marketing are your location and the demographics of your ideal target patient. Certain platforms and media work in certain areas and with certain demographics.
These days with multiple review platforms popping up online and digital marketing becoming the norm, a dental office needs to focus on 4 main aspects of marketing.
An easy-to-navigate, educational, attractive, mobile-responsive, high-converting office website for your business is key. Your options range from inexpensive do-it-yourself non-dental specific platforms like WIX, Squarespace, or Weebly which may save you money up front. These sites have limitations and require regular upkeep and time to create. Next, there are semi-custom templated pre-made websites which cost about $69-120/month. They often come with stock photos, pre-written content or videos and handle the mobile-responsive, esthetic and functional aspect of a website.
To truly have a high-converting, search engine optimized (SEO) custom site with original content that will rank high on Google you will be looking at $250-$850+/month for creation, hosting, ongoing updates, etc. Site cost is dependent on the number of pages, and technology used. Some people put up a site and don’t look at it for 2 years. It is suggested to be adding new content or pages or blog posting every month.
Once you have your main website, you will want to support it by continually improving it either ongoing SEO or search engine marketing (SEM).
SEO is a form of “organic” marketing, meaning your site is technically done well, is trustworthy, has a minimum of errors (grammatically, dead links, misspelled words, etc.) This means you have quality content that is original and authoritative and Google can recognize value deeming it worth promoting. It helps create your branding and typically is a slower progressive effort over time.
SEM on the other hand is a paid marketing strategy typically via Google Ads. The ROI with a skilled marketing agency can be very good if done well and monitored closely. This could run from $50-$2,500 a month, depending on your location and number of conversions you are looking for. This can produce quicker return on investment in the short run, and it is easier to track ROI.
The other aspects of digital marketing include posting on social media. This type of marketing is to develop relationships and educate your clients. It helps to build your brand awareness. This requires regular effort to maintain as you are building a sub-set community of your dental practice online. This can be anywhere from $50-250 a month or more depending on what you do.
Finally, let’s look at internal marketing options that typically cost less. Branded pens in the office, flowers for special holidays, fresh cookies, raffles, coffee, warm hand towels, air scent diffusers, lip balm, welcome gifts, sponsoring local health related events, or administering a patient loyalty in-office Membership Club – for patients without insurance are ideas which will cost about $200/month or less.
In summary, if you spent on the low end 3-5% of $60,000 - $80,000 monthly production, you would be spending $1,800 - $4,000 per month to put your practice into growth mode. A practice that wishes to add 20+ additional new patients per month consistently, should consider investing into a well-organized marketing campaign with a budget of 7-8% of desired production range.
Dr Randall LaFrom
