In today’s competitive landscape, having a strong marketing plan can be critical to the ongoing success of your practice. Your marketing plan provides the foundation, helping you achieve your unique business goals and long-term vision of success. Before you create your marketing plan, you need to develop a marketing budget. It’s important to understand the many factors that can impact your practice’s growth strategy and how to effectively budget to achieve your desired results.
Start developing your plan by carefully considering these four components of the marketing mix:
Dentistry is your product. But, more specifically, what kind of dentistry? Do you evaluate the types of services you should be offering? Do you understand the times and days your patients like to be seen? Have you branded your “product” or services so your community knows your practice?
In the past, “place” seemed to be limited to the physical location of your practice. Today, the concept of place encompasses much more than your physical storefront, signage and curb appeal. A new patient might drive by your location and feel compelled to call for an appointment, but they are just as likely to search for your practice on Yelp or Google. Since this is how consumers are commonly finding your place now, have you done everything possible to ensure your practice can be found easily? How many other places in your community are delivering the same product?
Cost and value are always important components, for both you and your patients. Do you know what you need to charge to be profitable, and are you charging it? Are you a fee-for-service practice or are you contracted with insurance companies? Are your patients driven by price and conditioned to seek discounts for your services? Alternatively, do they spend top dollar to be seen and receive care? Is price a differentiator for your practice? Understanding the implications around cost and perceived value will be critical when developing your marketing budget.
The promotion of the combination of your product, place and price is how you communicate your marketing plan. This is where you work to identify where you should share your message and how you will reach your desired audience. The necessary financial commitment is dependent on the three components above. Do people know about you and your product? Can they find you and afford you? Finally, why you and not someone else? Once you have considered your marketing mix, you can start evaluating your marketing budget.
When creating a marketing budget, understanding the demography of your community and the competitive landscape is critical. If competition is high, you will likely need to spend more to achieve your marketing goals. Simply put, patients have many dental provider options. Once you understand the challenges your practice might face, you can start evaluating how much you should spend.
When developing a budget for an established practice, you would generally allocate a percentage of the practice’s total annual collections to the marketing budget. This percentage varies and is based on your practice’s unique business goals.
Typically, if you are looking to maintain your practice’s patient base, you should allocate two to three percent of your annual collections. If you are looking to grow your patient base, you should expect to allocate between five and seven percent.
Measuring the return on your marketing investment will help determine whether your current marketing plan is performing optimally. The goal of developing a marketing budget is to identify what amount is financially responsible to spend to encourage necessary growth. The desired outcome is driving more patients into your practice and increasing adjusted production. If you are implementing a marketing plan, and aren’t seeing an increase in patient flow over three months, it’s important to reassess and ensure the appropriate marketing tactics are in place.
Marketing is not a perfect science. You will constantly be refining or modifying your approach, evaluating your efforts and measuring the return on your investment.
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