How Much Should Dentists Spend on Marketing?
Whether you’re an existing or de novo dental practice, you will struggle to survive without a competitive marketing budget. You must set aside a specific amount of money you’re willing to spend to maximize profitability and return on investment (ROI).
Some practices may budget based on a percentage of revenue. Meanwhile, others start with an ROI calculation and work backward from there. Still, others budget based on their ability to fill existing patient capacity. The ideal budgeting strategy ultimately depends on your unique business model.
Keep in mind that it’s always best to start with a general benchmark. If you know what you’re willing to spend and what available in your budget, you’ll avoid spending too much or too little on your marketing.
How much does the average business spend on marketing?
Today, businesses are spending considerably more on marketing than they had in the middle of the pandemic. According to a Deloitte survey, of Chief Marketing Officersthe average marketing budget rose to 11.8% in 2022, reflecting pre-pandemic levels. This increase in spending primarily pertains to digital marketing, with only 2.9% of this surge attributable to traditional advertising spend. This highlights the value of digital marketing for every type of business, including dental practices.
While these figures account for the average business spend, dental practices typically spend even more on their marketing.
Why do dentists spend more than average on marketing?
What sets dental practices apart from other types of businesses is their hyper-competitiveness. Many dental practices in a given area want to attract the highest number of local clients and earn their loyalty, and many patients seek a reliable long-term dentist that they can visit for years.
This level of competitiveness means that your budget must be competitive with other dentists’ spending, which is already higher than average. You need to be able to fill seats at your practice consistently, or else it will suffer. Also, understand that patients rarely drive far for initial examinations, which makes for even more competition for the same patients than for a company offering goods anywhere. Convenience is critical to these patients, which is why you need to show what sets you apart from practices that are potentially even closer to prospective patients.
What should you budget for dental marketing?
The budget you set for your dental practice will largely depend on whether your practice is new or more established in the industry.
New Dental Practices
New dental practices will need to market their business effectively to attract new patients, but they’ll also require a larger marketing budget to build initial brand awareness. This will help introduce prospective patients to your brand and increase both recognition and trust over time.
In addition, new practices will need to spend money on building a dental website that’s equally stunning and functional. Your website should provide potential patients with plenty of information about your services. At the same time, it should look appealing and be consistently easy to navigate, which will go a long way in impressing visitors.
To increase your website’s visibility on Google and other search engines, you’ll also need to invest in dental search engine optimization (SEO) strategies that attract more patients. This will entail targeting relevant keywords in your industry, including locally targeted search terms that people enter when looking for a dentist in their area.
Existing Dental Practices
For dental practices that have already built a foundation in their area, marketing spend will largely go toward growth. In facilitating this, you will need to invest in pay-per-click (PPC) ads on Google and various social media platforms such as Facebook. These ads will help ensure more people learn about your practice and visit your website.
If you find that your existing traffic isn’t converting into leads, you may want to consider investing in redesigning your website. You might discover that you’re not providing enough detail about your services or that people are having a hard time navigating your site. By conducting an audit of your website, you can better determine what’s working and what needs improvement.
What metrics matter when budgeting for dental marketing?
Dental practices can benefit from tracking certain key metrics when launching their marketing campaigns. Some of the most important metrics for these practices include:
Cost Per Lead
Cost per lead (CPL) is a pricing model for online advertising that charges advertisers for signups from people who express interest in the advertiser’s offerings. CPL pertains to lead generation efforts as dental practices attempt to attract new prospective dental patients.
However, keep in mind that leads are worthless unless the practice can convert them into patients.
Cost Per Acquisition
As mentioned, generating leads can be helpful, but you need to be able to turn those leads into loyal patients. This is why one of the most important metrics to focus on for dental practices is cost per acquisition (CPA). This tracks the amount spent to actually bring in new patients to your practice. By tracking this metric, you’ll be able to more effectively determine how much it costs for successful campaigns.
New Patient Value
Another crucial metric to track for dental practices is new patient value (NPV), or new patient revenue (NPR). This metric tracks the true average value of each new patient. You can track short- or long-term NPV. When tracking short-term NPV, consider setting a six-month timeframe, as dentists complete the majority of initial treatments within six months of patients’ first exams.
Patient Lifetime Value
Patient lifetime value (PLV) tracks the revenue earned from each patient throughout their lifetime with the dental practice. Each practice has a unique PLV that can range from thousands to tens of thousands of dollars.
How much do dental marketing services cost each month?
There isn’t a universal cost for dental marketing services for every practice. The final cost will depend on how quickly you need to acquire patients and the number of marketing vendors you choose.
The following are some of the potential costs of marketing services to consider.
Website Design
If you don’t currently have a website or your existing website isn’t converting enough traffic into leads, the costs for website design may be higher. You may need to invest several thousand dollars for web developers and backend technology. However, these expenses are worth it as they perfect your practice’s online hub with a top-quality website that appeals to visitors and turns them into patients.
Search Engine Optimization (SEO)
Good SEO will help make sure people find your dental practice online. If you choose to hire an agency that specializes in SEO, this can cost you around $800 to $2,000 per month. The competitiveness of dental SEO makes these practices more likely to see prices on the higher end of that range.
When looking for reliable SEO services, be wary of agencies or consultants offering services for less than $800, as they likely outsource their work to other countries. In turn, the quality of your SEO campaigns may suffer if less experienced professionals are putting them together at a much cheaper rate.
Content Marketing
You need strong content marketing to get the best possible results with your SEO. This is because search engines are more inclined to rank web pages that feature rich, high-quality, and well-optimized content. Not only can good content directly affect SEO, but it can increase conversions if visitors find value in the content.
Content creation agencies will typically charge anywhere from $300 to $1,000 for three pieces of content per month. Again, if you find agencies offering any lower rates, they may outsource content creation, which can lead to low-quality content that actually hurts your SEO.
Pay-Per-Click Ads
Dental practices should set a budget of around $1,000 to $2,0000 to generate leads via Google paid search or display ads. If you hire a dedicated PPC agency for these services, you can also expect to pay on the higher end for them. The reason for this higher price is that a PPC agency needs to make their entire profit through management fees.
Social Media Marketing
Simply posting on social media isn’t enough due to the steep decline in organic visibility. While posting is still valuable in engaging with new and existing patients, you must supplement posts with other efforts.
For these campaigns, you will need to budget for boosting your best posts and delivering social media dark ads to prospective patients. In most cases, you can generate leads through social media with an investment of $1,000 to $2,000.
How much should you spend on dental marketing?
Generally, in somewhat competitive markets, dental practices should spend a minimum of $1,000 per month on marketing. On the other hand, in highly competitive markets, practices should spend at least $3,500. This price 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 or even more, you need to know how many prospects are in your local market. Otherwise, you may wind up over- or under-spending.
Why invest in a patient acquisition platform?
Instead of paying different vendors for dental marketing services and covering each service’s profit margin, you can easily bundle all required services into a patient acquisition platform like DoctorLogic. This enables a single vendor to create, manage, and optimize your website and marketing strategies.