How Much Should A Medical Practice Spend on Its Marketing Budget?
$750? $1500? $5000 Per Month? Per Provider? Per Location?
There are a ton of variables to consider before deciding on the marketing budget for the medical clinic you run. You have a fantastic medical practice, a great staff, and an excellent location. If everything were perfect you don’t need to do anything else to get people lined up all over the street to avail your services. If you’re the sole doctor in town and there are no other towns in the vicinity there is a good chance that you’ll have to invest some cash for marketing. How much should an medical practice invest in marketing? It depends on a range of elements that you will need to consider about.
Things to think about before deciding on the marketing budget:
- What is the value of a new patient? Aka, how much can you make off of the initial treatment?
- What is the value over the lifetime of each individual patient? Simply put, how many times will you see them again and how much will you make each time you see them?
What is the normal amount that doctors spend on their for advertisements?
The exact budget for advertising for each practice or clinic is different for each practice and clinic, as the competition will be slightly different in each city or state. Certain clinics and doctors are extremely active and spend thousands a day (or more), while others may barely spend a thousand dollars a month for advertising, the bare minimum to be be viable on Google.. There are a handful of clinics and doctors that don’t even spend a penny on online advertisements; they depend solely on referrals or they have high Search Engine Optimization (SEO) rankings, allowing them to advertise for free basically. What’s important to realize is that each practice area is unique and there is no one-size-fits-all answer. For instance, with a medical spa or plastic surgeon, it’s almost impossible to achieve success without a significant online marketing budget, with the average range being between $4000 and $14000 a month and the average budget being $5977 for each practice in the USA. For urgent care locations across the USA, the typical range is $1500-$6900 per month, with an average of $2780 for each location (these locations are “average” locations with medium competition, nothing super competitive). Primary care physicians spend anywhere from between $680 and $1800 per month, and have an average amount of $777 per month. Pediatric practices average between $800 and $1800 per month, on average spending $1200 per month for each location. Sexual health practices? The standard range is from $3200 to $8600 per month, which means that you spend, on average, 4400 dollars per month, per location.
4 Real-Life Examples and Their Medical Marketing Budget
Example 1: A Small Primary Care / Walk in Clinic In The Local Suburbs of Midwest USA.
The clinic has five examination rooms and three providers. Their capacity is 66 patients a day, but right now they’re barely seeing 30 patients a day – definitely room to grow!. Their initial goal was just to increase to by 10 or 15 patients a day, a manageable but noticeable increase. Competition in their area is Medium. Background – Medical practice has been in operation for over 18 years but they’re old school, having used Yellow pages as the primary source of advertisement until urgent care clinics started popping up all over the place in the last few years. They have about $1,500 a month dedicated to online advertising ($18,000 a year).
Example 2: Medical Weight Loss Practice in sunny California
This was a clinic with four exam rooms, three providers, and a capacity for 20 people per day. They offer weight loss, Botox, dermaplaning, acne treatments, PRP, and other cosmetic treatments – typical things found in a medical spa. Bad news? They’re only seeing five patients a day 🙁 Though the competition is wicked fierce, they want to hit capacity and see the full twenty patients a day, so they invest heavily. They put $3,000 a month into advertising ($36,000 a year!).
Example 3: A Medical Spa in Florida Offering A Full Range of Services
This giant clinic has thirteen exam rooms and eight doctors with a capacity of more than fifty patients a day! Though there is a ton of competition, they want to have at least 40 patients a day booked, and with treatments ranging from microneedling to CoolSculpting, PRP, Sculptra, Juvederm, and more, they’ve got the staff and the services to make it a reality. They drop a cool $10,000 a month into advertising, spending easily over six figures a year to bring in new patients.
Example 4: An Urgent Care Center with 8 locations all over the West Coast.
With 8 locations, 34 exam rooms, and 43 providers, the capacity for these clinics is hundreds of patients a day, and it’s their goal to operate at 90 percent capacity every day. Covering all urgent medical care services and operating in such a small density, they spend $2,500 a month ($30,000 a year) on advertising their eight locations.
Question #1. What are you marketing your practice and how much do you spend on it?
You might not have one, however you’re likely already investing money in things that help promote your business. Have you paid for an online presence? Business cards? Pens with your address and number on one side? These are all marketing expenses and must be included in your budget. If you already spend money on marketing, it’s beneficial to have a complete report of where your funds are spending its time on a chart.
Question #2. What have been the outcomes of your currently-instigated efforts?
While it might be untrue, try to determine how patients arrive at your practice. The word of mouth? Someone else provided them with pen? Did they spot an advertising billboard along the highway? Take a look at what’s working and what’s not. If you’ve invested thousands of dollars for pins, and you haven’t noticed one return for months, it might not be an investment worth it.
Question #3. What is a prospective patient to you? And what is the cost to cost to obtain an existing patient?
If you haven’t done so determined the worth of a patient for your practice. Certain patients will be just only one-time visits and others could be lifelong patients. Find out how much each patient is typically spending. By calculating this amount you’ll be in a position to determine the amount you’d like to invest to attract new customers. ROI, also known as return on investment also known as ROI, is an important factor to think about when deciding on your marketing budget. You shouldn’t spend $100 for each patient, when they only make $50.
Question #4. What do you want to achieve?
This is a concern that doctors might not have thought about. Are you satisfied with at the level you’re in in regards to patient numbers? Do you want to keep your current number of patients or do you wish to grow your company? These objectives will influence your overall marketing strategy.
Strategy One – Building A Marketing Budget Based On Medical Practice Revenue
The idea of establishing your marketing budget on the proportion of your income is an easy method to establish the amount of your marketing budget. What the percentage should be however, is difficult to figure out. There’s a variety of suggested percentages offered by various experts, with the most common range of 1% to 12 percent of your gross income. Some doctors who have great word of mouth and limited competition tend to be more efficient in their spending.
If you’re a well-established practice that you wish to keep the current number of patients You should think about spending at minimum 3% of total revenue on marketing activities. It is possible to increase this amount to five percent when you notice that your that your patient numbers are declining or is beginning to slow down. Think about adding another 5percent on top of your financial plan if are looking to expand your business. Review this amount frequently to determine if it’s producing the results you desire.
If you’re new to the practice, it might be difficult to figure out the amount because you don’t do not have any previous data to make your decisions. If you’re new to the field, you should consider creating a marketing budget of around 10% of the projected income until you’re established. When you’ve mastered SEO for your site and word-of-mouth is a possibility, you could be able to reduce it while maintaining a high number of patients to your practice. Based on your market, specialties or services that yield more than normal revenues, you can increase that 10% or down to five percent.
Strategy Two – Developing A Marketing Budget Based On Your Growth Goals
If you’re not a lover of percentages and fractions There’s another method to think about a budget for marketing. Consider the amount of revenue growth you’d like to see , and make your budget based on this objective. In order to make the most of this method it is necessary to be aware of the Return on Investment (return upon investment) is for acquiring new patients. Also, you must consider the location of your clinic, its area of expertise, and specialization. These aspects could hinder your expansion potential, regardless of how much you spend.
Once you’ve calculated your ROI per patient it’s just a decision to determine the budget. It is generally recommended to get a minimum return that is 3 to five times the money you spend advertising on your patients. Therefore, for every dollar that you invest, you’ll want to get it back in the form of $300-$500 back to your the course of your business. To put that into perspective If you were to expand your business by $20,000 over the course of a year, you’ll need to boost your budget by $3,000 – $5,000.
Always examine your marketing strategies to determine if any factors affect the value of your patient or ROI. The monitoring of your marketing efforts will ensure that your marketing strategy is working smoothly and efficiently.
No matter which method you decide to use, take a look and make any necessary adjustments.
If you’re trying to calculate your marketing budget , and you end in a figure excessively high or low, it’s likely that your calculations aren’t right. Make sure you double-check your numbers before making your decision, to ensure that you don’t get caught off guard by the high price or dissatisfied with a lower number of patients. Be prepared to make changes if your marketing budget isn’t yielding the results you desire. However, you shouldn’t control your budget by making adjustments on an hourly or per hour basis. The effects aren’t immediately evident when you modify the budget for marketing. Additionally, if you’re constantly shifting your budget for marketing and objectives, do not allow it time to take off and begin creating results for you. One great strategy is to:
- Daily – Check the numbers when you’re not busy.
- Weekly – Compare this week’s performance against that of the week before.
- Monthly – Compare this month against the previous month with a focus on various factors, such as weather or the emergence of new competitors.
- Quarterly – Make any necessary changes in the future
- Yearly – Assess the overall performance of the year.
What method do I employ to calculate my budget for marketing?
There isn’t a incorrect solution. Both strategies are highly efficient if you have the proper data to decide on how much you can invest. Many businesses shift between these methods based on their goals for the year. If you’re just beginning your business, a plan with percentages might be the most effective. Once you’re established and have a solid understanding of your ROI on marketing and the value of your patients, you can look into whether a budget based on goals is a good fit in your clinic.
Healthcare marketing and medical marketing are NOT the same thing.
Healthcare Marketing is much broader; Medical Marketing is a subset of your Healthcare Marketing strategy.
Medical marketing is only one of the numerous “things”, “programs” or “techniques” launched to achieve an effective Healthcare Marketing program. Therefore, Medical marketing is a extremely important aspect that is essential to Healthcare Marketing for a practice. For instance, if you’re a pediatric physician who is focused on emergency pediatric care and you are looking to increase the number of patients you see it is possible be able to “market” your practice in the 20 mile area for prospective parents of patients that might be in need of Pediatric Urgent Care. To accomplish this, you’ll typically have several things to complete :
Step 1: Make sure you have a signpost for the building; people need to see where you are!
Step 2. Business cards handed out to everyone you meet; sometimes old-school referrals are the best way to get started.
Step 3:Get your info out to the local primary care managers so they know who you are, where you are, and what you offer.
Step 4: If you’re a pediatrician, offer a an no-strings-attached “meet-and-greet” for parents of prospective pediatric patients, so they know who you are and what you offer.
Step 5: Collaboration with schools in the local area to provide “low-cost” physicals for school athletes, especially useful for general practice doctors and family practice doctors.
Step 6: Mail your practice’s business flyer to everyone within 5 miles of your location, to let those closest to you know that there’s a new doctor in town.
Step 7: Network with local businesses that are close to your location and let them advertise at your location in exchange for a flyer at their location.