by Bill Schroeder
One of the most common conversations I have with veterinary practices revolves around how much money they should be funneling into their marketing budget. While the answer usually depends on many unique practice and market factors, I thought I’d share some information that might help you evaluate your specific situation and investment.
Small Business Data
The Small Business Association states that businesses grossing less than 5 million dollars annually and profiting to the tune of +\- 10% should budget 7-9% on their marketing. So, with that guidance, they would suggest that a veterinary practice with a gross revenue of 1 million dollars spend about $6,500.00/month on marketing.
My Unique View
I have the pleasure of working with thousands of practices, many of which share financial information with me. This insight reveals that the average practice spends much less than the amount suggested by the Small Business Association. While I’ve pondered the “why” behind this, I won’t waste time here with things I cannot prove.
Rather, know that my view also shows that those who are spending appropriately (both in amount and with the most impactful techniques) tend to be leaders in their markets, control the online conversations within their communities, and are eager to spend more!
So, Should You Spend More?
I know, you were expecting the guy who owns a marketing agency to suggest that you spend more on your marketing budget. Let me explain.
When an account reaches a point where they can predict the results of an effort based upon spend (understanding through consistent tracked performance), it becomes more of an “exchange” or “process” rather than a “guess.”
For example, it is possible for practices to create and refine the verbiage, creative, user experience, and positioning of Google Ads to the point that a known average cost per conversion is achieved. If this effort is designed around new clients, it is possible to predict how many new clients will be generated per $1,000 spent.
Monitor and Adjust Your Efforts
Although possible, the ability to predict new client acquisition marketing spend is not easy. Such maturity comes after a concentrated effort and focus on the performance of your practice marketing with special attention paid to monitoring and drawing parallels between those that are exposed to your marketing message, and actually spend money at your practice. Over time and with guidance from a professional veterinary marketer who has demonstrable success in such an arena, you too can achieve this goal.
Associates as Franchises
One of the variables you should consider is the size and growth of your practice. Meaning, the larger your team and goals, the more likely you should be spending more. I like to look at veterinary associates as franchises within your “mothership” practice. The overall success of the practice is highly dependent upon their success. For this to be possible, they need your marketing support.
Think about your current monthly marketing budget. Divide that amount by the number of veterinarians in your practice (including owners). Does the resulting amount sound like a reasonable amount to spend to promote a franchise? Would you feel confident saying to each associate that you are willing to invest that amount each month to market their franchise?
It’s all About Results
As mentioned earlier, those that understand the impact of their successful marketing are often champing at the bit to spend more. These practices are frequently limited by finding staff members and their market’s overall ability to produce more visits or new pet owners. Success like this takes time and appropriate effort.
Simply spending more is often wasteful. Please work with or consult with a marketer who is eager to provide reporting that
tells an easy-to-understand story of your marketing results as compared to your goals.
Major Factors That Can Impact Your Marketing Budget
These are some of the most important factors effecting marketing spend:
- Practice and market maturity
- Number of veterinarians in your practice
- Density of population
- Practice location (urban/suburban/rural)
- Local competition
- Google Review score
- Marketing maturity/optimization level
In the end, the only true way to determine the appropriate marketing budget for your practice is to have a digital marketing analysis performed.
The analysts of InTouch are happy to conduct such a review free of charge. Please call us today at (800) 493-9003 to get started!