Establishing a Dental Marketing Budget
We all know the old adage, “it takes money to make money.” If you want your dental practice to be found in the community, you’ll need to make an investment into marketing. Finding the right marketing budget for your practice shouldn’t be guesswork. As with most things in life, creating a strategy up front can eliminate a lot of unnecessary work (and buckets of wasted cash). Before you start throwing your money into the proverbial wind, let’s take some time to consider how much you should spend and where you should spend it.
The Power of a Long-Term Marketing Strategy
We’ve been in the dental marketing business for about a decade now, and here’s what we’ve found: The most successful practices establish a percentage-based marketing budget and stick with it year after year. Consistency is the key here, because you are creating momentum.
In Jim Collins’ book, Good To Great, he equates the power of a well-executed, long-term marketing strategy to pushing a heavy flywheel. At first, it takes a lot of effort to create a small amount of movement on that large wheel. However, once positive momentum is established, the same amount of effort yields greater and greater results over time. Think of your marketing budget the same way. It takes larger amounts of effort (and money) in the beginning to see smaller results, but once your brand establishes positive momentum, if you keep pushing steadily, you will see a huge return on your investment year over year!
How much do dentists spend on marketing?
We’ve found that most successful dental practices spend an average of 2% to 7% of their annual revenue on marketing. This means that an average-sized single-doctor practice with $1,000,000 in annual collections will typically spend between $1,700 and $5,800 monthly on marketing.
Practices looking to maintain their current patient base tend to spend a lower amount within that range to replace patients lost to attrition. Dentists who wish to grow their patient base aggressively typically spend on the higher end. Start-up practices that need to start building momentum from ground-zero often spend much more initially in order to get the proverbial flywheel spinning.
How much should an existing dental practice spend on marketing?
We typically begin to see positive results and long-term practice growth when clients spend between 3% and 7% of their annual revenue on marketing. Practices in more competitive markets should plan on spending on the higher side of that range.
How much should a startup practice spend on marketing?
Since they are starting de novo, startup practices need to put a large amount of resources into their marketing within the first 12 to 24 months in order to gain traction. To determine the right amount to spend, startup owners should ask themselves these two questions:
- What do I want my practice’s annual revenue to be?
- How soon do I want to reach my revenue goal?
Since a startup has no annual revenue, we suggest using your annual revenue goal as the basis for your marketing budget percentage. The exact percentage you choose will be based on your area’s level of competition and the rate in which you would like to reach your revenue goal. Practices with a less aggressive growth strategy in a less competitive market can see good results with an annual marketing spend of 10% of their revenue goal. For practices who wish to grow more aggressively, or who are located in highly competitive areas, this percentage should be increased significantly. We have seen practices spend as high as 25% of their annual revenue goal and reach their revenue target within the first year. However, with a growth strategy this aggressive, you need to be sure that your practice is able to scale quickly to provide excellent care to the huge influx of new patients, or you risk quickly losing the patients you invested so much to gain.
How should I spend my dental marketing budget?
From websites, digital ads, SEO, and direct mail, to sponsoring local sports teams and community events, there is no shortage of marketing opportunities for dental practices. I’ll admit it – as a digital marketing agency, we’re a little biased on this answer. Since we see the huge value that digital marketing brings to the practices we serve, we always encourage practices to spend a majority of their marketing budget on digital strategies.
Here are the key digital marketing techniques that we have found to be the most effective for practices of all sizes:
- Website - Your practice’s website is the hub of your digital marketing. Everything else you do points back to it, so it’s critical that it represents you well.
- Google Ads - Google is the first place most people look for a dentist. A healthy ad budget will ensure that new patients find you first.
- Local SEO - Make sure your practice is easily found on Google Maps, Apple Maps, Yelp, Waze, and other local directories.
- Organic SEO - Add blog posts and other fresh content to your website regularly to give your website authority and ensure great organic traffic.
- Facebook/Instagram Ads - Facebook ads are a great long-term strategy to build name recognition for your practice in the community. Where Google Ads connects you with patients looking for a dentist right now, Facebook connects you with people looking for a dentist eventually.
Shameless plug: It’s no secret that Studio 8E8 makes the best dental websites and provides comprehensive digital marketing services. We’d love to help you market your practice to your community. Reach out to us today to get started!
To supplement your digital strategies, it’s always a great idea to earmark a percentage of your budget for community-oriented marketing as well. We suggest that you examine your practice values and look for organizations to support that align with those. Doing these two things will allow you to say “yes” to the right opportunities, and “no” to everything else.
With the right budget, a long-term strategy, and a trusted marketing partner, your practice will see great results from your marketing investment year after year. We can’t wait to see what you build!