Frequently, when I talk to health and wellness practices, they do not have a marketing budget or marketing plan in place.
We frequently hear things like this:
- “I really don’t have a specific marketing budget.”
- “I don’t actually have a plan in place to reach my goals when it comes to marketing.”
- “If I have a little bit of extra money this month, maybe I will spend it on marketing”
Most natural health practices don’t have a marketing director. So the marketing of the practice falls to the clinic director. Some practitioners are very skilled at marketing, but most struggle in this area, especially generating patients from external sources.
Word-of-mouth referrals and internal marketing promotions are excellent ways to maintain the size of your practice. But if you have the goal to increase the size of your natural practice you must be doing some external marketing.
So whether you are a:
- Functional Medicine
- Integrative Medicine
- Massage Therapist
- Ayurvedic Medicine
You need to have a marketing plan and a marketing budget.
The 1st step in determining what a proper budget would be for your natural practice when it comes to marketing is to sit down and create SMART goals:
The goal must be specific. You and your team must clearly know what you’re shooting for. The target must be well defined.
Along with being specific, a good goal must be measurable. You can’t just say “I want to grow my practice” but instead say “I want to grow my practice by 20%”. You must attach a metric to any good goal in order to know that you have hit it.
A goal must be somewhat realistic. It should stretch you and your team but it has to be something that is possible. If you’re currently collecting $5000 a month and your goal is to be collecting $200,000 a month by the end of the year, that is not attainable.
A good goal should also be focused on results that are important to your overall mission. Achieving a goal should move you closer to where you want to be personally and professionally.
Lastly, a good goal should be time-dependent. Using our example from earlier “I want to grow my practice by 20%”, when? In three months? By the end of the year? Every goal should have a time attached to it.
I would recommend having goals for patient visits, new patients, and collections, at least.
Next develop a month by month, week by week, and day by day marketing plan focused on achieving your goals.
Once you layout the marketing activities that you will be participating in both internally and externally, you can then begin to develop a budget to fund those activities.
Marketing Budget Percentage of Sales
A good rule of thumb, based on several sources is to spend 5% of your gross revenue on marketing activities if you want to maintain the size of your practice. So for instance, if you collect $30,000 per month you should be spending $1500 per month on marketing just to keep your practice at $30,000 per month.
If you’re looking to grow your practice, I would recommend spending between 7% and 15% of your gross revenues on marketing depending on your goals and how aggressively you want to pursue them.
So again for a $30,000 a month practice to grow your practice you should be spending at least $2100 per month. The more you spend on good marketing the faster your practice will grow. If you spend $4500 per month on marketing for a $30,000 a month practice and you are getting a solid return on investment that should help your practice grow quickly.
The most successful companies in the world are spending about 20% of their revenue on marketing. For a billion-dollar company, this can be hundreds of millions of dollars on marketing every year.
So the truth is if you want to grow your practice you need to spend some money on marketing.
What you want to look for is a good return on investment.
If your case fee is $2000 and you spend $1500 a month on a new marketing program and that gets you on average 5, well-educated prequalified patients per month, who all start care, then your $1500 investment just created $10,000 in additional revenue for your practice. That would be an excellent return on investment!
Marketing Budget Example
The important thing is to understand the steps necessary to achieve your goals.
For instance, let’s say you want to see 60 additional new patients this year. To see 60 additional new patients you will need to see five more new patients per month on average.
If you know that 3 out of every 4 new patients who come into your office start care with you. Then in order to see 60 additional new patients this year, you will need to attract 80 additional new patients into the practice.
So you will need to develop an external marketing plan to attract 6 to 7 additional new patients per month.
You believe you can attract a new patient in your practice for about $300. So you set your budget at $2000 per month to attract the additional 6 to 7 new patients that you want to see this year.
You can do this with any goal.
Figure out what it would be for the year then break it down into a month, a week, day, etc.
Marketing is a basic part of your business.
Establishing a marketing plan and a marketing budget is essential for any natural practice.