How Much Should I Spend on My Medical Advertising

We’re constantly asked by Doctors and Dentists, “how much should I spend on advertising my medical practice?” Our answer is, do you know how much you’re spending right now and do you know what you’re spending it on?  Most of the time, the answer is, "my office manager handles that." To help determine your advertising spend, we shared our medical advertising audit spreadsheet (FREE to download).  Plug in the amount of money you spend on a monthly basis.  You can also use the spreadsheet to organize your account representative’s contact info, your login info and contract expiration dates.  Once you figure out how much you’re spending, figure out what costs you can cut.

We recommend cutting out any programs that overcharges you for your Google advertising.  Also, cut out all your Yellow Pages (physical book) advertisements—they’re deprecating the outmoded phone book.

Advertising & Marketing Rule of Thumb:
1. A good marketing rule of thumb is to allocate 5%-10% of your gross revenue to your advertising and marketing spend.
2. Expect a minimum 3:1 return on investment (ROI) on your marketing and advertising spend.
3. Calculate the lifetime value of each patient:
(Average Co-pay) x (Number of Repeat Visits per Year) x (Average Retention Time in Years for a Typical Patient)
For example, the lifetime value of a patient who’s co-pay is $100 x 2 visits per year x 5 years.
The value of that patient would be: $100 x 2 visits x 5 years = $1000 in total revenue.

As long as the medical practice spends less than $300 to acquire a new patient, the patient will prove profitable in a short amount of time.  From this example, it's smart to offer a complimentary screening to help drive traffic to your clinic.