Learn about the 7 deadly sins to avoid when creating a dental marketing budget.

1. 7 Deadly Sins to
Avoid When Creating
A Dental Marketing
Budget

2. Developing a dental practice marketing budget is
part science, part art. It’s numerical calculations plus
intuition plus experience. This means there are no
hard and fast rules for predicting success. But there
ARE rules, set in cold, hard stone, for avoiding failure.

3. By committing any of the Seven Deadly Sins when
setting your marketing budget, you WILL jeopardize
your marketing success. Guaranteed. So please
commit these to memory. Write them down and
carry them in your wallet. (Throw out the photos of
your kids to make room for them if you need to.) Get
them tattooed on your bicep. They’re that important.

4. Sin #1: Not having a budget at all
Sin #2: Reducing the budget when business picks up
Sin #3: Waiting until business is slow to allocate a
budget
Sin #4: Having a budget, but not funding it fully

5. Sin #5: Having a budget, but not allocating it properly
Sin #6: Having a budget, but not calculating your
return on investment
Sin #7: Letting CPAs, practice managers or other
dentists dictate what your budget should be
Let’s take a closer look at these truly nefarious
marketing sins.

6. Sin #1: Not having a budget at all
We get to meet and talk to thousands of dentists
each year. If you were to take a guess at how many of
these dentists tell us they have a definitive annual
dental practice marketing budget for their practice,
what would you guess?

7. 10 out of 100?
40 out of 100?
80 out of 100?

8. None of the above. We WISH the number were as
high as 10 out of 100. In fact, only two or three
dentists in a hundred can instantly communicate
their annual promotion budget for their dental
practice. Why is the number so low?

9. We suspect it’s because many dentists still have a
deep reluctance to view their practice as a business.
A business that needs to be promoted, publicized
and advertised just like any other—even though it’s a
health service, and an indispensable one at that.

10. Let’s take a moment to look at the real business
world. Which of the following companies does NOT
have an annual dental practice marketing budget?
Coca Cola
Budweiser

11. Nike
Johnson & Johnson
Colgate/Palmolive
Delta Dental
Microsoft
(Bear with us please. We are trying to find one…)
Comcast
Disney
Ford

12. Um, the pizza place down the street
Uh… the kids who sell lemonade on the corner
during summer break

13. OK, we give up. We cannot find ANY other business
that does not have a promotion/marketing budget.
Even the kids selling lemonade know they have to
invest in a pack of sidewalk chalk to market their
product to local foot traffic. For some reason, only
dentists persist in believing that they don’t need a
dental practice marketing budget.

14. If you’re one of them, please grab a sheet of paper or
open your email and list all the reasons you believe
dentists should NOT have an annual marketing
budget.

15. Did you write everything down? Good. Whatever you
wrote down, it’s totally wrongheaded, and if you
send it to us, we will personally contact you and
prove to you why it’s wrong. Go ahead, send it—
you’ll find our contact details on the Contact page of
this blog.

16. ALL dental offices (regardless of their situation)
should establish an annual marketing/promotion
budget – period – no exceptions! Nothing makes you
more special than major global brands, the pizza
place or the lemonade kids.
Marketing is an integral part of a healthy, growing
business of ANY KIND.

17. Sins #2 and #3: Reducing the budget
when business picks up and waiting
until business is slow to allocate a
budget
Since these are flip sides of the same devilish coin,
we’ll deal with them simultaneously.

18. Your dental practice marketing budget is not a band-
aid. When your business is ailing, you don’t slap
some money on the problem and hope that makes it
better. It won’t.

19. Marketing doesn’t work like that. Your marketing
efforts need to be funded consistently over the long
term to ensure maximum benefits. The spikes and
dips in your business shouldn’t affect your marketing
strategy or your dental marketing budget, otherwise
you get locked into a short-term, reactive cycle that
wastes time and money.

20. For example: you’re not getting enough patients, so
you decide to throw $1,000 at the problem. You buy
a big color ad in the local newspaper, but the phone
still doesn’t ring. Guess what? A single newspaper ad
isn’t going to get the phone ringing. You need to
build awareness over time by exposing the public to
that ad over a long period of time—maybe even
months.

21. And for every single one of those months, you’re
now going to be sitting on your thumbs and losing
revenue, instead of working on new patients. If you
had set a consistent marketing budget in the first
place, you wouldn’t be playing catch-up and wasting
valuable time.

22. Conversely, you don’t want to take away your
marketing dollars when your business starts to pick
up. Sure, you’re doing well now, but couldn’t you
always do a bit better? And what are you doing to
safeguard your patient revenues for the future? This
kind of short-term thinking can land you back in a
situation where business declines and you are left
scrambling to fix the problem.

23. Instead of seeing your dental marketing budget as a
band-aid, see it as a vitamin pill. It’s not a short-term
fix, it’s a daily part of your prevention regimen. Even
when you wake up feeling great, you remember to
take your vitamins—so that you don’t wake up
feeling rotten the next day. With a consistently
allocated marketing budget, you know your
marketing strategy is working for you day in and day
out.

24. (Let’s skip to Sin #7 for a sec)
Sins #4 through #6 are going to take up a fair bit of
time, so we’d just like to get Sin #7 out of the way.
Other dentists, CPAs and practice management
professionals are all smart, insightful people who can
help you make your business better. Salt of the earth.
Love ‘em.
But none of them has ever managed marketing
budgets for dentists. It’s just not what they do.

25. We have seen dentists get bad marketing advice
from lots of different quarters. Dentists share
anecdotes about what worked for Fred or Elaine or
Ralph, without actually knowing how it worked or
whether it really did work as well as Fred or Elaine or
Ralph told them it did.

26. Or they tell you all about some great marketing
gimmick that worked great for them. Maybe it did,
maybe it didn’t, but borrowing another dentist’s
great marketing idea is like borrowing their shoes—
it’s just not gonna fit. Every practice is unique, and
marketing is not a one-size-fits-all proposition.

27. Sins #4 through #6: You have a
budget, but you’re not making it work
for you
Let’s assume you have the good sense to assign an
annual dental marketing budget because you
recognize the need for consistent, strategic
marketing to support your business.
Congratulations—you’re in an elite minority of
dentists!

28. But you may still be wasting money and missing
great opportunities because you’re still guilty of
Deadly Sins numbers four through six. You may not
be allocating ENOUGH funding to your marketing
efforts, or you may not be allocating funding to the
right places. And finally, you may be missing that
final, critical feedback loop that helps you recognize
today’s successes and determine tomorrow’s
strategy—calculating your return on investment.

29. So, let’s start by looking at how to calculate a healthy,
effective marketing budget. Yes, there is a ‘magic
formula,’ and here it is in its most basic form:

30. MARKETING BUDGET = (Previous 12
Month Revenues X 5%) to (Annual
GOAL Revenue X 5%)
In plain language, you should allocate an annual
marketing budget than falls between five percent of
your actual revenues for the year and five percent of
your goal revenues for the year. This formula should
be used for practices that have been in business at
least five years, and that earn $1.5 million or less per
year:

31. For instance, if you own a solo GP practice that
earned revenues of $600,000 last year, and you
would like to grow your revenues to $800,000 per
year, your annual dental marketing budget range
would be between $30,000 and $40,000.

32. If your practice has been in business at least five
years, and earns more than $1.5 million per year, you
follow the exact same formula as above to determine
your first year’s marketing budget range. Then for
each subsequent year that you see an increase in
business, you will decrease your marketing budget by
.25 of a percentage point.

33. For instance, if your practice earned revenues of $2
million last year, and you would like to grow your
revenues to $2.5 million, your dental marketing
budget range would be between $100,000 and
$125,000 for the first year. If your revenues went up
to $2.1 million in the second year, your marketing
budget range for that second year would be between
$99,750 ($2.1M * 4.75%) and $118,750 ($2.5M *
4.75%). Here’s an example:

34. Baseline: $2M actual revenues, $2.5M goal
revenues
$2M actual
Y1 budget: $100,000 to $125,000 ($2M * 5%) >
($2.5 * 5%)
$2.1M actual

35. Y2 budget: $99,750 to $118,750
($2.1M * 4.75%) > ($2.5M * 4.75%)
$2.3M actual

36. Y3 budget: $103,500 to $112,500
($2.3M * 4.5%) > ($2.5 * 4.5%)
$2.4M actual

37. Y4 budget: $96,000 to $100,000 ($2.4M * 4%) >
($2.5 * 4%)

38. Essentially, larger practices should be able to grow
their revenues while reducing their marketing budget
year over year. Over the years, they will find the
budget ‘floor’—a spending limit below which
business growth begins to stagnate. When you find
your budget floor, you can simply add .25 percent to
the budget the following year to jumpstart growth.

39. These are VERY general guidelines, based on average
marketing expenditures, but following these
calculations will allow you to estimate the kind of
marketing budget you’ll need to achieve your
revenue goals.