Marketing is a long-term process that can really help to grow your practice and boost its value
In the run up to selling your dental practice, getting your business plan in order is crucial. Having clear, concrete goals will help potential buyers understand what you’re trying to achieve and that you’re serious about selling the business. How you market your practice and how well you do it is a key component.
Marketing can help increase the value of a practice too. It can create practice recognition and increase patient awareness about the services it offers. By effectively communicating the value and benefits of their practice, principals can differentiate themselves and attract more patients, ultimately increasing the value of the business. And a larger patient base often translates into increased revenue and improved business value.
Be strategic
With limited resources, dental practices need to be strategic in their advertising and promotional efforts to maximise their return on investment (ROI). When investing in marketing activities, it is essential to know which initiatives are generating the most revenue and which are not yielding the desired results. By setting specific goals and targets, principals can allocate their budget in a way that prioritises those initiatives that deliver the highest returns. This data-driven approach can help you make informed decisions, allowing you to optimise your marketing efforts and maximise your ROI.
Your budget needs to show what your marketing goals are (e.g. increase your number of patients, increase number of whitening treatments) and how much you intend to spend to achieve them. Then break it down into the different activities such as paid advertising, social media advertising, websites, email marketing, leaflets and flyers.
So, how much should your budget be? It depends on the size and goals of your practice, how established it is and how much money you have available to support your efforts. According to research by Alba SEO Services, 38% of small businesses asked spent less than £1k on marketing each year. As a general rule, new businesses allocated between 12-20% of their gross revenue on marketing, while established ones spend between 6-12%.
Be informed
Once you’ve allocated a spend, it’s important to track it. There are various tracking metrics but one that is pertinent to a dental practice budget is Cost per Lead (CPL). CPL calculates how much you have spent on generating leads for every patient/treatment request that you acquire. This can help you understand how much you are spending in order to attract that one new patient/treatment request. The more information you gather, the better decisions you can make about repeating or amending your activity. For example, if you spent £350 on a Facebook Ad campaign that generated only a handful of enquiries but you know that regular emails result in a 200% ROI, it’s much easier to see where you should focus your future marketing efforts.
But how do you calculate the ROI of a marketing campaign? Simply put, you take the sales growth of the practice, subtract the marketing costs and then divide by the marketing cost. So, if revenues grew by £1k and the campaign cost £100 then the ROI is 900%. Of course, this type of calculation does assume that the total month over month sales growth is down to the marketing campaign which might not be accurate. For a better, more meaningful ROI, comparisons are needed, so revenues in the months prior to the campaign, for example, would help show the impact more clearly.
Be disciplined
Managing a marketing budget promotes efficiency and effectiveness. With limited resources, dental practices cannot afford to waste their marketing spend on ineffective strategies. By setting a budget, principals can prioritise the most effective marketing channels and tactics, ensuring that they are reaching their target audience and driving results. It also fosters accountability and responsibility. By assigning specific funds to different marketing activities, practices can hold themselves accountable for the results. This encourages a more disciplined and structured approach to marketing, ensuring that every pound is spent wisely and with a clear purpose. It also helps in evaluating the success or failure of various marketing initiatives, allowing dentists to learn from their mistakes and make improvements moving forward.
Additionally, managing a marketing budget promotes long-term growth and sustainability. By carefully planning and controlling marketing expenses, dental practices can ensure that they have a consistent and sustainable marketing presence. This helps in building practice awareness, attracting new patients, and fostering patient loyalty. It also allows them to build a solid foundation for future growth and expansion.
Managing a marketing budget is of utmost importance for dental practices. It allows them to control their costs, track their ROI, promote efficiency, foster accountability, adapt to changing market conditions, and promote long-term growth and sustainability. By allocating their resources wisely and prioritising their marketing initiatives, dental practices can maximise their marketing efforts, achieve their desired business outcomes and bolster their intrinsic value.