Article written by Christin Trujillo of Maven Financial Partners.
Starting a new med spa, dental, or healthcare practice can be intimidating. Knowing how to spend, plan, and budget can be a full-time job on its own. Not to mention, you want your new business to be successful after all of the blood, sweat, and tears you’ve poured into bringing your vision to life. One thing we want to demystify is the marketing spend. How much should practice owners spend on marketing? And, how do we budget for that?
What to Spend on Marketing
Most practice owners know they’ll need to spend money on marketing, but they aren’t sure what they need or how much to spend. When it comes to marketing, we believe that in order to make money you have to spend money. Furthermore, it’s important to know exactly what you’re getting in return for your marketing spend.
For the average healthcare practice, we recommend spending 5-6% of your total revenue on marketing. For example, if you produce and collect $100K per month, your marketing budget would likely fit between $5K-6K per month.
For new practices, these percentages are usually not attainable until three to six months after opening, due to ramping up revenues paired with the need for additional up-front costs required to jump start your marketing plan. For this reason, it’s harder to specify a percentage of revenue to spend on marketing until a practice normalizes their revenue after several months of operations. And, even then, an ongoing marketing assessment should be made.
What Kind of Marketing Does Your Practice Need?
So, what should you plan to spend right off the bat? What type of marketing do you even need if you’re opening your first practice? I recommend clients research multiple marketing and branding agencies. Not all marketing agencies are good at the same things, and many specialize in certain types of marketing or advertising. It’s important that you select your marketing partners based on your personal goals and needs.
Let’s break down the big buckets you should plan for when building your marketing budget:
- Branding: Costs anywhere from $2K-10K+
This is the name of your practice and the image of your brand. Investing in this is a non-negotiable. Getting the right name, logo, and branding can be critical to the success of any practice. How does your name and brand make your patients feel? How do you want them to feel? Consider these things when choosing a branding partner.
- Website Build Out: $3K-12K initial costs + ongoing maintenance costs
A website is critical to launching your business. People rely on the internet when researching a new practice, treatment, provider, or doctor. Having a website that showcases your brand and educates patients allows potential new patients to explore your practice prior to making an initial phone call. Additionally, a website should serve as an opportunity to connect with patients. Does your website have a chat function or option to book online? Meeting the patient where they are plus convenience influences patient behavior.
- Advertising and Search Engine Optimization (SEO): Varying one-off costs of $2-5K ongoing per month depending on advertising spend. (Can be more based on volume and size of the practice.)
Do you plan on advertising your practice and services? That costs money in addition to having a website. Not all marketing companies specialize in web ads, lead generation, or SEO.
Will you be posting monthly blog articles? Sharing promotions? Posting before/after photos? These activities require ongoing maintenance. If website engagement is a goal of yours, be prepared to budget this cost. Additionally, SEO and Pay Per Click has ongoing costs and should regularly be assessed when analyzing financial goals and new patient targets. Do you want your practice to populate at the top when patients are searching for certain keywords? If so, this is where you spend. This is especially important and effective for local businesses–just like your healthcare practice.
- Social Media Management: $1-4K per month
A comprehensive social media strategy is critical to engage your patients in all phases of their journey, from discovering your office for the first time to trying that new treatment you just started offering. Social media connects with patients on a deeper level and builds confidence in your brand. It can also communicate your personality, likeability, experience, and credibility.
Every type of practice should tailor its social media content to appeal to the target audience. Aesthetics and Plastics practices should leverage high-quality before-and-afters to showcase skill and artistry. Dental practices should educate patients about new treatments or specialties leveraging quick videos and photos. Vets should demonstrate their unique features that will make pet owners choose them over others. Connectivity between your physical practice, your website, your brand, and virtual voice are a vital component to any complete marketing plan.
Start with a Marketing Budget and Track ROI
If these numbers are overwhelming, go back to the budget and ensure your costs are appropriate and your marketing strategy is targeting your goals. Talk with your financial partner and knowledgeable marketing experts about priorities and tactics for your practice to help you identify the right amount of spend and where. And, look at best practices in your industry to see what’s working for competitors.
Finally, make sure the marketers you’re working with are returning your investment. Reaching a million Instagram followers is only valuable to you if patients are coming through your doors on a consistent basis. Just like it’s important to track your finances, marketing agencies should help you track the effectiveness of your marketing spend–and change course when strategies aren’t equating to growth.
If you’re curious about your own marketing budget, visit our website to request a Complimentary Marketing Budget and Financial Assessment with Christin Trujillo.
This article was brought to you by Maven Financial Partners.
Christin Trujillo, Financial Consultant