Marketing your healthcare practice is a critical factor to becoming a bigger and more profitable facility—helping you elevate awareness and enhance your reputation, attract more patients, retain existing patients—while building a strong and recognizable brand. But how much to spend on marketing is a question many healthcare organizations are asking today—as they plan and budget for the coming year. Here are seven points to consider:
- Company tenure: If your facility or practice is relatively new, it’s essential that you budget for marketing. Healthcare industry leaders recommend investing up to 15 percent of revenue on marketing the first few years in business. Once you have generated measurable levels of awareness and a strong patient pool, you may consider scaling your marketing budget back to invest in other areas like operations or new technology.
- Business goals: Are you looking to penetrate new markets, expand your current healthcare facility or introduce a new clinical service line? It’s important that your marketing budget align with your strategic business goals in order to be effective. The goals that you set should be achievable and have a realistic marketing budget behind them.
- Former marketing budget: Did you see an ROI? Were you able to quantify the success of your marketing mix, attribute specific media channels or messaging to patient influence or business growth? Evaluating previous levels of investment against marketing performance will give you greater insight into where—and how much—you need to allocate for your future budget.
- Market landscape: Consumers have the control, the mindset and the tools to influence their healthcare decisions now more than ever before. In today’s healthcare marketing landscape, it is essential to have the appropriate budget to create memorable experiences that inform, delight, and foster an emotional connection—especially within an industry as emotionally driven as healthcare.
- Target audience: Who are your target consumers? It’s essential to gather insight on how to reach them and what marketing channels are best suited to communicate your message. And remember, patients aren’t your only target. Healthcare organizations must also connect with physicians, other medical professionals and influential audiences. Therefore, your marketing budget should be substantial enough to generate visibility in a coordinated, diversified fashion and reach the right audiences with the right message at the right time.
- Competitive set: Nearly all sectors of healthcare are contending with a shape-shifting competitive landscape. In many markets, the corporate world is now part of the competitive picture, with big-budget retail marketing campaigns in play. Having enough marketing dollars dedicated will give you more power to compete effectively against these new players (although few can expect to match them dollar for dollar).
- Projected revenue: Percentage of revenue is something to take into account when developing your budget. But keep in mind, this can vary. According to a report from the U.S. Small Business Administration, small companies (defined as businesses with less than $5 million in revenue) spend an average of 7 percent of their total revenue on marketing. Larger, more established healthcare organizations might allocate as much as 10 to 12 percent.
Of course, these are not the only considerations when determining your healthcare institution’s marketing budget; they’re general guidelines to help inform your budgeting strategy. How you implement them (or if you implement them) is for you to decide based on your practice’s business goals—and what you can afford.