How Much Investment Is Ideal for Healthcare Marketing?
John Vakidis - Partnerships and Enterprise Sales in Healthcare
Growing sales through strategic partnerships.
Healthcare providers face the persistent question, "How much investment should be put in marketing?" Whether your practice is new to the market or well established, success and expansion depend heavily upon an effective marketing budget, which maximizes profitability while guaranteeing an attractive Return-On-Investment (ROI).
Budgeting Strategies for Healthcare Marketing:
Healthcare providers employ various budget strategies when setting their marketing budgets, from basing it on percentage of revenues or reverse engineering an ROI goal to aligning it with patient load capacity management; each business model calls for its own optimal plan.
Starting off by setting an ideal benchmark can help ensure a more cost-efficient approach to marketing. Knowing your financial limits prevents overspending or underinvesting - providing an even balance of efforts towards business promotion.
Recent Trends in Healthcare Marketing Expenditure Healthcare:
The Small Business Administration typically recommends 8-10% of revenue to go towards marketing. Many practice management consultants will recommend 10-15% in the first year for a start up practice. They feel it is best to launch quickly with lead generation and branding strategies, since the start up doesn't have a reputation yet and will not really benefit from patient referrals for quite some time. Rather than focus on profitability in the first year of business, it's best to ensure success and that extra investment can make a huge difference when budgeted correctly!
According to an October 2023 market report, "The global Digital Marketing Market size reached USD 322.3 billion in 2022. The Digital Marketing market is estimated at USD 366.1 billion in 2023. Demand is poised to soar at 13.6% CAGR over the forecast period between 2023 and 2032. Sales are anticipated to surge to USD 1,118.9 billion by 2032."
Key Takeaway:
The digital marketing market is expanding and doctors should spend their annual marketing budgets to align with the trends of large enterprise organizations. Your goal with marketing is to be in front of consumers when they are looking for your services and strategies like SEO, Content Marketing, External Link Building and Google PPC Advertising are the best ways to endure this!
Compared to traditional advertising methods like Billboard, Postcards, Newspaper, Radio, TV and even Social Media Advertising that are more geared for Branding, these strategies should not be confused lead generation from Digital Marketing strategies like the SEO and PPC which are more geared for the low funnel... patients who are actually looking for your services!
Why Consider an Increase in Digital Marketing Spend for Your Practice??
Healthcare services are highly competitive environments; providers aim to attract local clientele while building long-term loyalty by using marketing budgets that not only match, but exceed average spending levels. Proximity plays an essential role in patient choice; therefore, healthcare marketing must not only attract, but also differentiate your services from local competitors. A great website with a continuous Content Marketing Strategy can help you attract the right patients, consistently and no other agency does this better than DoctorLogic!
Allocating Marketing Budget in Healthcare:
Budget allocation will depend upon whether or not you're initiating new practices or consolidating existing ones.
Healthcare Practices New to Market:
Newcomers need to invest more heavily to establish brand recognition and attract patients - this requires creating an engaging website, along with applying proven Search Engine Optimization (SEO) tactics.
Established Healthcare Practices:
Once an existing practice has established itself, their focus typically shifts toward expansion. Investment in Pay-Per-Click (PPC) Advertising becomes crucial, to increase online visibility and patient engagement quickly. SEO is by far the best long-term strategy, but PPC is ideal for casting a wide net for thousands of keywords that customers are looking for and to position your practice in front of your ideal patient when they search on Google! The only problem with PPC is the rising costs due to increased awareness of its effectiveness. It's a great short term strategy (3-18 months), but this is one of the main reasons you should also have a strong SEO strategy in place!
Key Metrics in Healthcare Marketing:
Numerous metrics play an essential role in measuring the success of your marketing efforts:?
Below are a few examples. Whether you are in these specialties used in these examples, see if either of these resonate with you and were you are in your ownership journey.
DENTISTS:
A dentist might average $750 per year per patient. To determine your NPV, take the total revenue you did last year and divide that by the total of individuals that you treated. If your practice did $800,000 in revenue and you treated 1,050 patients, that means your NPV is $761.90. Now if your average patient stays 5 years, this means your PLTV is $3,800. Now if it costs you $150-$250 to acquire a new patient, you can easily see how it's worth it!
If you are doing $800,000 in revenue now with your current marketing efforts and spend and you have the capacity to see 20% more new patients, that means you have a $160,000 opportunity! Consider taking your current marketing budget, adding $13,000 - $16,000 annually to achieve your growth.
领英推荐
Look at your current investments and ask yourself these 3 questions:
MEDSPAS:
"A single-location medical spa generates $121,632 in monthly revenue. The average annual medical spa revenue in 2022 is $1,982,896. In 2021, that figure was $1,722,551, and in 2018, the average annual revenue was $1,526,382." - American Med Spa Association
If you are an average med spa doing $120K per month in revenue and you are not happy with your patient volume, take a look at your marketing budget. Are you spending even 8-10% of your revenue on marketing? If you have the capacity to see more patients, then you likely are NOT spending enough on marketing. A typical med spa has a health margin of around 35% (give or take). If for every dollar spent on marketing, you averaged $12 in revenue, that is a 12:1 ROI. Now when you apply the profit margin, you can think of this way... for every dollar you spend on marketing you actually make $4.2 in profit!
MedEsthetics puts it this way, "For example, if your typical Botox Cosmetic patient stays with your practice for five years and spends $600 every six months for injectables at a profit of $200 per treatment, the lifetime value of a patient seeking Botox Cosmetic injections is $6,000 and the lifetime profit to your practice is $2,000."
I would add that if you add aesthetic lasers and other services beyond Botox, it is not hard to get the LTV of an aesthetic patient to be between $5000 - $10,000!
Costs for Healthcare Marketing Services:
Prices vary based on the specifics of your practice's marketing requirements and market competitiveness, but key areas of expenditure could include website design, SEO services, content creation, PPC ads, social media. Investing in the right digital marketing strategies with a realistic budget ensures superior outcomes for patient acquisition!
Determining Your Healthcare Marketing Budget:
A minimum monthly investment of $1,000 - $3,500 per month should suffice in smaller markets with little competition, but for larger markets with more intensely-competitive areas, I would recommend $5,000 - $7,500 as the monthly budget. Understanding local market potential helps in tailoring this figure accordingly.
*******************************SPECIAL OFFER*******************************
When we meet, I will show you the search volume in your area for your top procedures and the revenue that is already taking place in your market for these services. This report and strategy session is a $495 value is FREE available to Dentists (General, Cosmetic and Specialists), Aesthetic Practice Owners (Plastic Surgeons, Dermatologists, and Medical Spas), Vision Specialists (Optometrists and Ophthalmologists).
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Why You Should Consider an Integrated Patient Acquisition Platform:
DoctorLogic is an All-in-One Patient Acquisition Website Marketing Platform and Digital Marketing Agency that? can streamline your marketing strategies so you don’t have to work with multiple digital companies. By consolidating your entire digital marketing budget with our agency offering various services all on one streamlined platform, we can maximize efficiency with your marketing investment, and oftentimes cut costs while also increasing lead volume and revenue!
ABOUT ME:
I've consulted >1,500 healthcare practices in 10+ years consulting with website development and digital marketing. I've written over 200 other articles here on LinkedIn, 3 eBooks about SEO in Healthcare and I've been invited t speak and present at 50+ healthcare conferences, webinars, and podcasts in the last 5 years.
Are you ready to invest in your growth? Let's set up a time to talk!
To your success!
John Vakidis
Partner, VP of Business Development
Do you have questions about marketing your practice more effectively online? If so, shoot me an email to [email protected] or call me at 469-458-7126.