How Much Should a Medical Practice Spend on Marketing?
Every business needs to spend money to make money, but it's not always clear exactly how much you need to spend. If you're trying to figure out how big of a budget you need for your medical practice marketing, there are some key factors to consider. Your budget will depend on how you set your goals and what you want to achieve.
How Much Should a Medical Practice Spend on Marketing?
Every business needs to spend money to make money, but it’s not always clear exactly how much you need to spend. If you’re trying to figure out how big of a budget you need for your medical practice marketing, there are some key factors to consider. Your budget will depend on how you set your goals and what you want to achieve.
Some practices may build a budget based on percentage of revenue, while others might start with 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. Just as with every other business, not every practice will be the same.
For example, if you’re the only dentist in town, your marketing budget wouldn’t need to be as big as a dentist competing against 10 others in the same area. To determine the right marketing budget for your medical practice, start with a general benchmark and go from there.
If you want to learn more about how to set the right budget, here you’ll learn some strategies to help calculate marketing costs.
How much does the average business spend on marketing?
As mentioned, 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 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 a 2020 Deloitte survey of Chief Marketing Officers, B2C or service-focused 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.
Should your medical practice budget set aside more or less than 12% for marketing?
The budget you set for medical malpractice marketing should reflect your targeted ROI. To grow your practice at a faster rate, you need to invest in marketing sufficiently. When you work with a great marketing agency, you can expect an ROI of at least 4:1. This means that you receive four dollars in revenue for every dollar spent on marketing.
You should also consider the type of practice you own, specifically whether it’s a new or existing practice.
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 spend 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.
For existing practices, the majority of their budget will go toward growth. Your practice should invest in pay-per-click (PPC) ads on Google and social media platforms like Facebook.
If existing traffic isn’t converting into leads, you may also need to invest in a website redesign. Revamping your website’s appearance and functionality could help you stand out and appeal to more prospective patients.
How much do medical marketing services cost each month?
There are many types of marketing services to consider, each of which comes with its own 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.
If you don’t have a website or your current website isn’t converting, you may need to spend several thousand dollars 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. Going to an agency specializing in SEO can cost around $800 to $2,000 per month. Keep in mind that SEO is highly competitive, especially for medical practices with local competitors. As such, you can expect to pay on the higher end of this range.
While you might want to settle for services that cost less, be wary of companies offering services for less than $800 per month. This is because these agencies often outsource their SEO to other countries. This may result in the use of outdated blackhat SEO techniques and efforts that are generally less effective. In other more familiar words, you get what you pay for.
Content marketing involves the creation and curation 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.
Content creation agencies will charge anywhere from $300 to $1,000 for three pieces of content per month. 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 want to get the most from your PPC efforts, you should budget around $1,000 to $2,000 per month to generate leads from Google paid search or display ads. 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.
When going through an agency for social media marketing, you can generate leads through social media for an investment of around $1,000 to $2,000 per month.
How much should you spend on medical marketing?
Competitiveness will play a huge role in determining precisely how much to spend on medical practice marketing. In somewhat competitive markets, practices should spend a minimum of $1,000. For those in highly competitive markets, the ideal starting budget is $3,500. This excludes the one-time payment required to set up or redesign your website.
To determine whether you need to spend $1,000 or $3,500 as your base budget, you need to calculate how many prospects are in your local market (within a 30 minute drive of your practice). If you don’t know how competitive your area is and how many viable prospects you need to target, you may wind up under- or over-spending.
If you want to begin establishing a clear budget for your marketing, you can learn about your market in a couple of ways. You can pull census information and Google search trend data yourself, or you can get a free local market analysis from DoctorLogic.