Before I became a dental management consultant I spent 30 years working as an advertising agent in the wonderful pre-digital era when ad men wore bow ties, Boss suits and drove big BMWs.
Despite all the glamour and froth we were actually very disciplined and formulaic in our approach, with testing and measurement a key part of our role. The most difficult aspect of my job was the serious task of building and executing new customer acquisition plans for clients ranging from a ‘disrupter’ carpet retailer in Grimsby to the global luxury car brand Bentley.
The challenges on budget formulation were always the same — how much should the client invest in the campaign? What will the ROI (return on investment) be? No doubt you have heard people talk about the size of the marketing budget as a % of turnover.
This is a useful idea in established industries like supermarkets, fashion retailing or automotive where years of experience mean acquisition cost models (that map the cost of acquiring a new customer) have been constantly refined. No such guide exists for independent dental practices.
So how do you set a realistic marketing budget for your practice in 2019? Luckily in the digital world everything digital is measurable and if set up correctly the measurement is automated. Critically, we know that different treatment types perform differently across different channels (SEO / PPC / social media / press / posters / radio / signage), which means it’s absolutely essential to build your marketing budget by individual treatment types.
Having agreed a realistic overall revenue or sales objective with your team, for example a 20% revenue increase for 2019, this is how I would go about establishing your marketing budget. It’s not perfect but it seems to work, and it gets easier year on year as you accrue more evidence.
Step 1
Establish historical new patient acquisition marketing costs (by treatment type and by channel) after you have stripped out any GDP referrals and patient to patient recommendations. OK, I appreciate you may not have all that information if this is the first time you have built your marketing budget this way, so let me help with some indicative acquisition costs and optimum source channels.
As you will appreciate, every practice catchment / reputation / competitive set is different, so you will need to sense check these numbers for your catchment. Costs vary considerably from Belfast to Brighton to Ballydehob.
| Treatment | Lead | Appointment | Conversion | Best channel |
| Implant | £80 | £136 | £200 | SEO |
| All On 4 | £650 | £650 | £1,800 | Outreach and local press |
| Adult ortho led by Invisalign | £40 | £60 | £120 | SEO/PPC and Facebook/Instagram |
| Children’s ortho | £30 | £35 | £45 | SEO |
| Smile makeover | £60 | £70 | £140 | SEO/PPC and posters/press/local radio |
Step 2
Determine how many new patients in each treatment category you need, check this fits with your capacity, then determine how many will come in from GDP referrals, patient to patient referrals and how many will be ‘conquests’ (a result of your marketing system).
Step 3
Start to build your plan:
- Factor in seasonality and clinician holidays
- Allocate volumes of new patient ‘starts’ throughout the 12 month period
- Create a budget by month by treatment and channel
- Factor the acquisition costs into your 2019 practice budget
Step 4
Establish implementation timelines and costs. This should cover signage / website / nurturing / outreach / all channels / HR / production constraints.
Marketing is effective when it’s carefully planned and its outcomes are critically evaluated. The devil is in the detail. Get it right and you will grow your practice significantly, short cut the system and fail to complete the analysis and you are in danger of haemorrhaging hard won profits.
Let me know if I can help.
Best wishes
JJF
07860 672727
