How do I know what is the right amount to spend on marketing for my office?

Across the world, businesses are facing cut throat competition and dental clinics are no different, in fact the competition among dental clinics is much higher as every clinic wants to attract the local folks who will remain with them for years and give repeat business till their lifetime and therefore, they go the extra mile to achieve their objective. With new clinics coming in, the pressure of acquiring new patients and also to retain the older ones has also gone up on the existing clinics. The fear of losing out in the race has ensured that marketing campaigns are just not the good to have activities but have become a necessity for any dental clinic. Almost every dentist understands that the key to his long term and short-term objectives is the regular influx of new patients and a considerable and regular investment is required on the marketing campaign to get new patients onboard. Though most of the dental clinics are prepared to invest on marketing of their businesses, they do not understand where to draw the line which would maximize their return on their marketing spends.

Since every dental clinic is different and therefore too many variables make it difficult to have a single recipe of perfect marketing budget. As a thumb rule, the total expense of a dental clinic should not exceed 60% of the annual revenue and the sub budget for marketing related expenses should hover between 4-8%. This is an average estimate and will differ significantly between a new and an old clinic. Old clinics have an established brand value in the locale and they just have to catch the eyeballs of potential new customers whereas a new clinic has to establish the name of the clinic and parallelly acquire new customers, in short, a new clinic has to do an extensive branding exercise to attract their potential customers.   An old clinic can have a budget of 4-7% of the revenue whereas a de novo clinic might have to look at it differently. A new entrant in the market will have an upfront cost of website, marketing collaterals, branding etc which can push the costs higher in the very first year though it might get rationalized in a few months. Usually, apart from the initial investment, a start up will have to spend close to 20% of its revenue in initial years on marketing activities.

Short Term and Long Term Goals of the Clinic

Before finalizing the marketing budget, the clinic must review the short term and long term goals in terms of revenue and bottom line. Clinic has to envisage and decide on the timeline for achieving these goals. No dental clinic would want to say no to a new patient due to capacity constraint and therefore a detailed analysis and planning is required about the infrastructure and manpower capacity of the clinic before finalizing the marketing budget. Since a major investment and time would be required to increase the infrastructure capacity, meticulous planning is required in marketing campaigns so that the leads are generated in sync with the existing infrastructure of the clinic.

Focus Areas of Marketing Campaigns

Basis the goals and vision of the clinic, focus areas of marketing campaign can be decided and budget can be finalized accordingly. A few critical areas can be-

With the advent of new technology, most people use the internet to search for any business. An appealing but informatory website is important for any dental clinic. A website enables the prospective patient to check the capabilities of the clinic and can also help to call the clinic directly by using the click to call widget. If the website is not able to generate enough leads or the leads are getting fewer every month, possibly the prospective patients are not able to get the message which the clinic wants to communicate. A possible revamp of the website along with the change of SEO strategy might be required

Most people invest considerable amount of time on social media and no marketing campaign can afford to ignore the power of social media. Simply posting on social media platforms or putting random advertisements do not give the desired results. A dedicated and focussed plan designed by the people who understand social media marketing is required for this activity. A separate sub-budget (within the marketing budget) should be earmarked for social media promotions.

No single strategy fits all types of businesses. Since both types of marketing i.e. digital and offline have their own target segments, marketing campaigns should be planned on the basis of research findings and the goals of the dental clinic.. Digital marketing will need investments on online ads, writing blogs, social media content, SEO marketing etc and offline campaigns will need flyers, pamphlets, referral coupons, social engagements and workshops. 

The budget of marketing should increase gradually but strategically. Consistency of the promotion should be maintained and piecemeal approach should be avoided so that the maximum mileage can be derived with the momentum of the campaign.

Brand creates trust and identity therefore branding exercise can be critical for any dental clinic. Investments will be required for getting appropriate names, logos, marketing collaterals which can generate trust and recall value in the minds of the prospective customers. Though older clinics have an established brand, rejuvenating a brand periodically helps in changing its image to a modern look.

Factors which are to be evaluated

Cost per Lead (CPL)is one of the metrics used for calculating the amount required for generating one lead for your dental clinic. Lower the CPL higher is the efficiency of your marketing campaign and vice versa. Higher CPL than your competitor clinics means you have to spend more money to get the same number of leads compared to the competition which would lead to higher outflow of resources. Regular review of performance of your campaign can be done to ensure the consistency and identify the improvements required in the marketing campaign. 

Cost per lead is an important factor to track but ultimately what matters is the patient sitting in your dental chair. Cost Per Acquisition (CPA) measures the amount required to onboard a new patient in your clinic. Tracking CPA would help to understand the investment of a successful marketing campaign. Marketing efforts can generate a lead for the clinic but the job of conversion of lead to business is with the clinic staff. Though all efforts of front desks are focussed on converting leads into business, it is different for every individual clinic. The performance on the lead conversion parameter should factor in the planning of any campaign. 

Onboarding new patients is critical for the growth of a dental clinic but at the same time rate of attrition should also be monitored. Count of new patients should exceed the count of attrition substantially and if this is the other way round, investment in marketing campaigns should be increased accordingly. Similarly new patients should be monitored against the count of active patients on a monthly basis.

New Patient value is another important parameter for any dental clinic to evaluate before planning a marketing campaign. Usually, the treatments are completed within four to five months and therefore a similar time period to be used to understand the average contribution of new patients. On an average a new patient gives higher revenue than the existing ones.

Dental clinics strive hard to retain a patient’s relationship for long as the repeat business can go on till the lifetime of a patient. Life Time Value (LTV) is again an important criterion to be evaluated by the marketing planning team. LTV of a patient is the average annual value multiplied by the average length of relationship. This value goes up significantly when the value of referrals is also added. Patient’s lifetime value should also be considered while calculating the return on marketing investments.

Strategize with the help of Specialists

The medical specialists of the clinic might be the best doctors in the industry but when it comes to marketing campaigns, the job should be left to the experts. Just putting a banner or an ad on social media sites does not generate the targeted response. A marketing agency having credentials in the field should be hired for planning and executing the campaign. Agency’s fee will add to the marketing budget but will ensure maximum return on your investment. 

Once the business brief and expectations are communicated to the marketing agency, the budget the marketing plan shall be finalized. It is recommended to stick to the plan finalized for the campaign but a regular review of the performance is suggested so that the areas which might need minor alteration of strategy or improvement can be identified and corrective actions can be taken without any delay.

A focussed but strategically designed campaign which targets the correct audience will be the key to success with any budget that the dental clinic has finalized for the marketing activity of the clinic.

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