Check out this post to learn how to allocate your dental marketing budget & which mediums are worth the risk!

2. Help! How do I spend my money?
The formula to determine your dental marketing
budget range is pretty simple, isn’t it? All you need is
a dollar-store calculator to figure it out. Heck, you
can practically use your fingers and toes! But figuring
out the best way to SPEND that money is a little
more complicated.

3. First, there is a difference between budgeting and
cash flow reality. Let’s say your budget should be
$50,000 per year. You don’t necessarily have to have
$50K sitting in the bank—just make sure you have
about $4K per month allocated within your practice
cash flow. See the difference? You want to spread
your promotion efforts throughout the year anyway,
so it only makes sense to spread out the funding.

4. Now, the first year of establishing a marketing budget
and sticking to it will be the hardest. It always is, for
all of our clients. After the first year, (assuming you
have allocated and spent the budget wisely), you’ll
start to see this type of spending like a utility bill – a
regular and necessary expense that you hardly even
notice.

5. So how do you allocate your budget wisely? You start
by making a plan and sticking to it.

6. Make a plan and stick to it!
Think about your savings or retirement investments.
Your financial advisor uses the word ‘allocate’ to
determine how much of your savings to put into high
risk, medium risk, and low risk investments. By
spreading your savings across investments with
different exposures to risk, you can diversify and
minimize the overall risks you take, while taking
advantage of riskier investments with potentially big
payoffs.

7. The exact same principles are at work when it comes
to your marketing budget allocation. Your marketing
budget is an investment, just like your retirement
investment. And like your retirement investments,
your marketing investment comes with some level of
risk. Anyone who tells you otherwise is lying to you.
But by controlling your allocation, you have total
control over the size of the risk you take with your
marketing dollar.

8. But where should a dentist start to invest their
marketing dollars? Which mediums provide the most
impact and the least risk? And which mediums
complement one another well and achieve better,
synergistic results together?

9. The answers to these questions it really depends on
your starting point. Since nearly every reader of this
blog is going to have a different starting point, it
makes sense for us to list the investments in low-risk
to high-risk order. If you’re just starting to explore
marketing options, you’re going to want to know that
you marketing expenditures will pay off with an
immediate impact on your business.

10. If your marketing campaign has been running for a
few years with good success, you are in a position to
be able to experiment with marketing mediums that
are riskier, but also offer some pretty spectacular
potential gains.
Let’s take a look at the risk factors associated with
each medium, and look at ways to diversify and
minimize the risk to your marketing investment.

11. Low, moderate and high-risk
mediums for direct response
marketing
To be clear, our purpose in this section is to focus on
the risks involved when eliciting a direct response
using various marketing mediums as opposed to
establishing brand familiarity.

12. As we drill down into the three risk levels, we will
review the anticipated response and the
recommended budget allocation. We chose this
focus because most dentists are more interested in
marketing strategies designed to elicit a direct
response from potential patients than they are in
more general brand-building activities.

13. Low-risk mediums
Internal Promotion
Internal promotion, or promoting your dental
practice through referrals from existing patients, is
one of the best and most efficient forms of
marketing, and a very low risk activity if done
correctly. However, few practices can rely solely on
referrals to grow at an acceptable rate.

14. It’s also not a good idea to constantly hammer your
existing patients with promotional materials. BUT, if
you are like many dentists, you probably haven’t
spent enough time on internal promotion. You
should not ignore the value of internal promotion to
build your business. This would be a good place to
allocate some marketing dollars each year. Five
percent or less of your marketing budget should be
enough.

15. Risk level: very low
Upside: nearly risk-free and reliable
Downside: very slow growth; could irritate your
patients

16. On-location signage
Here’s one that dentists overlook all the time. There
is virtually ZERO risk involved in putting up well-
designed signage in front of your dental practice,
including banners, sandwich boards and window
designs. If depreciated over the life of your practice,
the cost is next to nothing: once your sign is
designed and installed, no additional budget
allocation is needed.

17. Inexpensive, very low risk, and minimal upkeep
expenses are all good things. If you don’t have a sign
yet, and there is almost any amount of foot or
automobile traffic that can see your sign, you are
missing a potentially great opportunity. If you do not
have signage and it is warranted – allocate some
marketing budget toward it.

18. Risk level: very low
Upside: low-cost, negligible ongoing costs
Downside: higher initial costs

19. Practice website
The risk level with a website is typically low.
However, this depends on the design, message
communicated, number of visitors and if site visits
convert to new patient calls. Even a BAD dental
website should produce one new patient from time
to time. Let’s set the practice website at 5 percent
risk and 95 percent upside, just to put it into
perspective.

20. Your practice website is going to be your BEST
secondary promotion medium, which means that all
of your external and internal promotion will refer
people to your website. A certain number of those
people will go to your website to “check you out” so
to speak. And, in turn, a certain number will be
converted into new patient phone calls.

21. A good website and an effective web marketing
strategy is a foundational staple of your overall
marketing campaign—and if you do it poorly or don’t
do it at all, the costs to you in terms of a lost
opportunity are staggering. You should likely allocate
about 10 percent of your budget each year to your
website and Internet marketing.

22. Risk level: low
Upside: potentially your best source for new patient
contact
Downside: needs to be done well—a bad site and
poor search engine position are major lost
opportunities.

23. Direct mail
Direct mail is one of the most effective forms of
advertising we use for our clients. In fact, we achieve
success in 96% of all US markets with our direct mail
campaigns. Amazing, huh? Direct mail is also BY FAR
the least risky external marketing medium available
to you.

24. That doesn’t mean you can focus on direct mail
alone—it needs to be used as part of an overall
marketing strategy. But if you want to diversify the
allocation of your marketing budget than direct mail
is a great investment. Direct mail presents the least
risk of all external (deployed outside your practice)
mediums. If you are not actively promoting your
dental practice and are considering doing so for the
first time, this is a great place to start.

25. Risk level: low
Upside: successful in most markets; great ROI
Downside: takes time to build momentum, some up
front costs

26. Moderate-risk mediums
Print media
Print media can mean almost anything that is
physically held and read by consumers near your
dental practice. Newspapers and magazines are likely
the first two to come to mind in this category.

27. But there are many others. You may have a local
subdivision nearby with a monthly community
newsletter— that would be considered print media.
In general, this medium can be feast or famine. We
have had clients deploy the same basic newspaper
insert in the same basic market for over a dozen
years and enjoy wild success every time.

28. We have also seen the other side. In some markets, it
takes us two or three attempts to find a print media
outlet that provides a sustainable and consistent
return. That’s why print media comes with a 62%
success rate. However, once you find the winning
formula, this medium can be a high-performing,
reliable part of your marketing mix. We recommend
looking at print media once you have exhausted the
potential of lower-risk mediums.

29. Risk level: moderate
Upside: ROI can be high on a successful ad/insert
Downside: may take time and money to find the right
print venue

30. Higher-risk mediums
Higher-risk mediums should be considered once you
have fully explored the potential of low and
moderate-risk mediums.

31. Mass media
Mass media include television, radio, billboards and
yellow pages. In general, and without the support of
the low and moderate-risk mediums described
above, you are looking at a 44% success rate.

32. So, do NOT allocate and diversify into mass media
until you have fully exploited less risky mediums, and
are generating a reasonable return on investment.
There are circumstances where you might want to
use mass media at an accelerated pace to initially
generate familiarity with your dental practice.