Guideline figures to help with your practice budgeting
Budgeting for dental practice marketing is a hot topic and one where business principals often struggle to know where to start. Unfortunately there is no easy formula to calculate this as each situation is unique, but hopefully the following insights which are distilled from many years of experience, will provide a solid starting point. We will also take a quick look at some of the key marketing channels and what you might expect to budget for those.
First let’s take a look at business in general and the average spend on marketing activities. Then we’ll take a closer look at the dental business, remembering of course that there is no universally accepted formula for this.
Small businesses in the UK typically allocate anything between 5% and 11% of their total sales turnover i.e. before running costs are taken out. So a business turning over £500,000 would be spending £25,000 pa at the lower end up to around £55,000 pa at the top end. This will vary based on where you are located, level of competition, maturity etc. But at least we now have an idea of where to start. But even at the low end, that sounds like quite a lot right? Indeed, this is a comment we regularly hear back from dentists who become rather concerned when we suggest that marketing budgets will likely not be in the hundreds of pounds per month, but potentially into the thousands (but don’t panic just yet!)
Do new start-ups need to allocate more budget?
The answer to this is quite often “yes”. As new kids on the block, you are starting from nothing and need to work harder to get your brand and services out there. We’ll look at some of the mechanisms you can use a little later on. For more established companies, expect to spend a little less (notwithstanding a general increase in competition) and for long-established companies with exceptional word-of-mouth referrals, possibly less again.
So there is a key challenge here – those without mature revenue streams typically need to budget more than businesses who are already well-established. The key thing here is to make sure that your overall start-up budget does have enough cash to cover your dental marketing requirements. If not you could end up with a lovely new or refurbished practice that no-one knows about!
I’m on a tight budget – what are the basic “must haves”?
The days of dentists simply setting up and starting to make good money very quickly are fading fast and there is an absolute need to deploy a basic marketing strategy from day one. Without this, prepare to fail as the practice down the road will be doing it and taking all of the potential business. Unfortunately I know of several new practices which opened in the last 3 years which left no budget for marketing and simply failed and closed. This was almost unheard of just 7 or 8 years ago, but is actually much more common now.
So here are the absolute basics every progressive practice needs, together with typical prices you can expect. Also some additional marketing channels which should also be considered in line with your aspirations and advice from your marketing advisor:
- appropriate internal marketing – waiting room leaflets, signs and flat-screen presentation video
- prominent external branding (signs, window banners etc)
- periodic local leaflet drops – particularly to build initial location awareness (yes, they do work irrespective of what you may have heard)
- periodic adverts in local/regional magazines – usually quite cheap and effective
- an excellent, mobile-optimised website (read more in this blog about what your website should contain)
- proactive acquisition of Google and Facebook reviews
- an active presence on social media
A high-quality clinic website will require external expertise along with help with artwork for advertising. However, much of the rest can be managed and maintained locally and on a tight budget of just a few hundred pounds per month. Set up costs will also need to be factored in, for example £3k for a good website, £500 for a waiting room video and perhaps £2 – 3k for signage if you keep it tight.
What about ongoing digital marketing such as SEO and pay-per-click?
This is where costs start to increase markedly, but increasingly it’s becoming an essential spend for those practices who want/need to be competitive. Other than for long-established practices where word-of-mouth will often be the primary source of new patients, new patient acquisition from the web is incredibly important. This doesn’t just mean having a great website but also making sure it is prominent in Google’s search engine. So what sort of budget can you expect for this?
- SEO (search engine optimisation) – from £200 + vat per month to £1k plus depending on location and level of competition (good SEO is time-consuming and not cheap)
- AdWords pay-per-click – expect £350 per month for click costs for a basic campaign, up to several thousands of pounds for specific treatment types (e.g. implants) in competitive locations
- Facebook advertising – small campaigns can help build your local business awareness from as little as £200 per month
With all of the above, there will also be associated set-up costs, for example configuring ad campaigns, building landing pages etc. To give an idea, setting up to advertise on Google and/or Facebook will typically cost £300 – £400 per campaign inclusive of bespoke ad copy and landing pages.
As we can see above, and re-iterating that there is no “one-size-fits-all”, it’s easy to see how a dental marketing budget can easily stretch into a few thousand pounds per month, particularly where SEO and paid advertising is included. This article doesn’t go into pay-back, but it is covered elsewhere in this blog. Suffice to say that marketing, done well, can easily pay-back many fold – but you must be prepared to invest in appropriate expertise.
Here at Dental Media we’ve been building and managing bespoke marketing campaigns for dentists since 1999 and we’d be delighted to bring our expertise into play to assist you too. If you’d like to discuss in more detail, please call us on 01332 672548 for no-obligation advice.Google+