How much should I spend on marketing?
This is a conversation that is frequently had when talking to clients. If you’re a big group then this is less of a quandry as there will be a management team who will set budgets for all departments for the next 12 months based on the past years profits and history of client acquisition.
For a sole clinic, a private practice or start up it’s more of a head scratcher. The ideal client is one that comes through word of mouth and traditionally this is how many practices have grown. It’s ideal because it comes from doing a good job which reflects on your professionalism and crucially it doesn’t cost anything. The downside with this method of growth is that it’s very slow and the landscape that you operate in is highly competitive. Both of these factors hinder organic growth.
The simple truth is that it’s impossible to grow a clinic without some sort of promotion.
So how do decide what to spend?
Sadly, there is no one size fits all answer to this. In the name of transparency we spend about 10% of our gross income promoting our business. This figure includes commissions, online advertising, website building and updating, acquiring mailing lists, Google adwords & SEO and we tend to react to a particularly good month by increasing our advertising the following month. Every business is different because the cost factors can vary enormously depending on what you do and how you operate.
I usually give the following advice to a client trying to get a handle on marketing spend.
1. Calculate what it cost you to get a client.
This is a good benchmark in understanding your budget. So work out your total promotional spend in a year and divide it by the clients it bought in (to get a realistic figure ideally you will want to remove clients who came through word of mouth). It will start to make you think how advertising as a whole effects your practice. You will already know the gross profit from a client and from this you can build up a picture of what would happen if you ramped up the spend.
2. Stop thinking about promotional spend as your money and invest
Marketing spend is tax deductible – so in most cases if you spend £1k in reality it costs you half of that amount. Instead of handing your hard earned income to HMRC, spend it on growing and adding value to your business. Decide how you’re going to market your business and then allocate a dedicated monthly spend to it.
3. Turn Pro
Don’t react to marketing opportunities, plan and execute a campaign as part of your business plan. Every successful practice or clinic uses established marketing channels to promote their business. None of it is rocket science.
Take time to learn how they work. If necessarily take a day off and do an online course. All of these channels can be used by allocating a few hours a week by you or an assistant And if you need help, get it.
– Google (both adwords and SEO are highly effective)
– PR
– Website
– Local advertising
– Video
SO despite the promise of my blog post, I’m afraid that only you can determine what you need to spend on marketing, but the one true unassailable fact is that you need to do something. You need some sort of plan. Waiting for word of mouth to build up your business isn’t going to get you to where you want to be any time soon.
Our team have decades of media experience and we continually give out free no obligation tips or information to anyone who asks. If you have a question drop me a line and I will be happy to help or give me a ring.
Gavin@BHMmedia.com // Tel 0774 009 8092