As a business owner you have a lot to manage, not the least of which is the finances. No one looks forward to running payroll and paying taxes, which is why these tasks are often outsourced. But what about marketing? Unlike most other aspects of your finances, which are costs, marketing is an investment that can lead to more revenue. So how much should a cosmetic practice invest in its marketing?
Before I jump into how much you should invest let me clarify one thing, I’m not including variable costs in my suggestions. Variable marketing costs, which inherently vary from month-to-month and year-to-year, typically consist of: business cards, office collateral, thank you cards, and other print pieces.
Your fixed marketing investments will typically stay about the same each month, and for the established practice this number should be between 5-10% of your total revenue for that given month, of which 50-80% should be dedicated to digital marketing. So if your practice is generating $90,000 in revenue per month you should be investing between $4,500-$9,000 in marketing.
If you’re a newer practice then this percentage will most likely need to be higher. The reason is that you haven’t had the time to develop as many referrals and repeat patients. Also, marketing tactics such as search engine optimization (SEO) and social media marketing take time. Therefore, advertising (which isn’t cheap) becomes more essential.
Here are some things to consider when establishing a budget:
1) What is the average value of a new patient? Calculate this over the course of the first year of services and lifetime.
2) What percentage of leads that the practice generates result in consultations? What percentage of consultations result in new patients?
3) Do you have the means to both track leads and thoroughly follow up with them?
For #3, I strongly suggest utilizing Google Analytics with conversion tracking. You can even track organic leads by keyword if you set up custom reports in Analytics. You can take it a step further by also integrating your web forms with an email marketing software or CRM to send auto-responses to each new lead. Lastly, you need to make sure that your staff, who’s following up with the leads, has the proper sales and customer service training to convert these prospects into patients.
Another tip I’ll throw out there is to value each and every patient because it’s much more cost-effective to keep an existing patient than find a new patient. Develop skin care packages and treatments that require patients to come back periodically, even if it’s only once or twice a year. Most importantly, remember to regularly communicate with all patients and prospects via email and social media. These tactics aren’t as popular because they don’t lead to as many new leads or new patients, but that open line of communication cultivates relationships, which in turn leads to patient retention.
Every cosmetic practice should invest in SEO, online advertising, video marketing, blogging/press releases, email marketing, and social media marketing. The amount you choose to invest should be justified in the number of leads you generate and the amount of revenue you bring in. There’s no “right” percentage for every practice to invest. Med spas, plastic surgery centers, ophthalmology practices and cosmetic dentists all have unique business models. Just make sure you’re generating ROI and avoid making these marketing mistakes.
To learn more about establishing a budget and implementing a comprehensive marketing strategy talk to Turbo. Just leave us a note here or call 877-673-7096 x2.