Your 2018 Marketing Budget
If you – like most enterprising practice owners – are already planning your 2018 budget, you know you’ll need to earmark a certain percentage of collections for a variety of marketing efforts. Identifying what exactly that percentage should be depends on many factors. Some advisors will tell you that the investment you make toward marketing should be inversely proportional to your current level of busyness, with percentages ranging from 1-15% of collections that fluctuate based on your patient capacity.
However, these across-the-board percentages fail to take into account a variety of situations that can affect your marketing budget. For example, if you are an orthodontist – whose patient lifespan is shorter than a general dentist – you might want to increase the percentage of collections invested in marketing, even if you’re at a higher percentage of patient capacity. To consider another scenario, if you are a growing practice and you plan to take on an associate, partner, hygienist, or other service provider in the next six to twelve months, you would want to continue marketing as if you were operating at a lower capacity than you truly are. Or, a doctor who purchases an established practice may want to heavily invest in marketing, even if it seems like they’re operating a reasonably high capacity.
So what’s your magic number? In truth, there’s not a one-size-fits all calculation for determining what percentage of
collections should be spent on marketing. Yes, as a general rule the percentage of collections that should be invested in
marketing activities typically falls within the aforementioned range. But the exact amount is a number that should be reached after careful consideration with your practice and financial advisor, accounting for all variables and then drilling down further to break out which percentage of the marketing budget should fall to certain types of marketing.