Every business needs to spend money to make money, but it’s not always clear exactly how much you need to spend. One of the most common questions asked by owners of healthcare practices is “How much should I spend per month on marketing”. The short answer is “It Depends”. There are many variables to consider, most importantly your goals for your business and whether your business is relatively new or a mature long existing business. In addition, another question always asked is “What kind of marketing should my business do and how should I allocate my marketing money”.
Some practices may build a budget based on the percentage of revenue, while others might start with a return on investment (ROI) calculation and work backward. Meanwhile, others will establish their budget based on the need to fill existing patient capacity. Ultimately, the total amount you set aside for marketing will depend on your practice type and the competitiveness of your market.
Among the most common are internal marketing/patient communication, direct mail, email marketing, TV/radio ads, newspaper/magazine ads, Yellow pages ads, online organic marketing (SEO), and online paid ads. The most important thing, no matter what kinds of marketing products you choose is to track your return on investment (ROI) to make sure you are not wasting your money.
The amount a business spends on marketing can vary significantly based on industry, size, and competitiveness. For instance, the amount that local dentists spend on marketing in an area with the heavy competition will be far more than the budget for a plastic surgery practice in a low-competition area. However, knowing the average across all industries can give you a better idea of where to start.
According to the survey, companies spent approximately 12% of their total budget on marketing. Even when facing uncertainty around the economy and the future of businesses amid the pandemic, businesses have continued to spend more on marketing. This shows the general need for businesses of all types to set a solid budget for their marketing efforts, including medical practices.
You should also consider the type of practice you own, specifically whether it’s a new or existing practice:
Existing practices:
For existing practices, the majority of their budget will go toward growth and/or maintaining their current revenue levels should spend about 3%-5% of its gross revenue on marketing. A practice/business looking to grow quickly needs to spend more aggressively-more in the neighbourhood of 5%-10% of revenue.
New practices:
New medical practices will want to attract new patients, but they’ll also need to build initial brand awareness. If people don’t know about your practice, how will they find and come to trust you? Generating brand awareness will require heavy marketing spending to get your practice off the ground.
New practices also need to spend more money on developing a website that’s both stunning and functional. Additionally, you’ll need content marketing to dominate search engines with good SEO. Nowadays most health care businesses spend almost all of their marketing budgets online since TV/radio/newspaper ads are very expensive and Yellow Pages ads and direct mail marketing are relics of the past.
How much do medical marketing services cost each month?
There are many types of marketing services to consider, each of which comes with its costs. The ultimate cost will depend on how quickly you need patients, along with the number of marketing vendors you choose. The following are some of the different medical marketing services that could factor into your budget.
Website Design:
If you don’t have a website or your current website isn’t converting, you may need to spend some money upfront on web developers and backend technology. Then, there will be monthly charges. For example, you may need to pay for a domain name, web hosting, website management, and either in-house or outsourced developers and designers.
Search Engine Optimization (SEO):
If you’re not familiar with SEO and don’t have the resources to dedicate to it, you may want to work with a medical SEO agency. Keep in mind that SEO is highly competitive, especially for medical practices with local competitors.
While you might want to settle for services that cost less, be wary of companies offering services for low cost because these agencies often outsource their SEO to others. This may result in the use of out dated black hat SEO techniques and efforts that are generally less effective. In other more familiar words, you get what you pay for.
Content Marketing:
Content marketing involves the creation of various types of content. Plenty of high-quality and well-optimized content comes with many benefits. It can engage audiences at every stage of the patient journey from initial research to conversion. It can also help significantly improve SEO performance with natural instances of relevant keywords and links. The content used in healthcare content marketing could include blog posts, website content, videos, and more. Again, avoid spending on the low end for content marketing, as outsourced content could be of poor quality and negatively impact your practice.
Pay-per-Click (PPC) Ads:
PPC ads are just as vital to your practice as SEO. With a strong medical paid advertising campaign, you can reach target audiences all over the internet who might not find you otherwise. Today’s PPC platforms make it easy to hyper-target your ad campaigns to connect with all types of audience segments. PPC ads can also appear at the top of search engine results to supplement organic results. If you choose to work with a dedicated PPC agency, expect to pay on the higher end. This is because they need to make a profit through management fees.
Social Media Marketing:
Medical practice marketing also requires the effective use of social media. Simply posting medical social media content channels isn’t enough due to the steep decline in organic visibility. To ensure people see you on Facebook, LinkedIn, and other platforms, you need to boost your posts and launch ad campaigns. You will need to budget accordingly to facilitate this.
How much you should spend on medical marketing?
Spending on medical marketing, one should consider revenues and goals:
2% to 3% at a minimum to keep a consistent level of patient flow
4% to 5% in a scenario where the practice is struggling or growth is starting to call.
5+ % if you want to accelerate your growth.
Conclusion:
“Healthcare Marketing is a revenue centre, not a cost centre.”
Competitiveness will play a huge role in determining precisely how much to spend on medical practice marketing. Marketing should be an internal part of growing practices. If you’re trying to figure out a marketing budget, start with the gross percentage to give you a ballpark marketing budget number that will work for you.
