The formula to find out how much you should spend on marketing
Avoiding needless stress
Should you raise or lower your dental marketing budget?
Are you at capacity? What is your definition of capacity?
Having the right mindset going into the future
Minimizing risk by diversifying your marketing
What worked, what didn’t, and how to tell
Result tracking crash course
Statistics vs. feelings
Hello, and Welcome once again to the Dental Marketing Mastery series. This podcast is brought to you by DentalWebContent.com and New Patients Incorporated. I’m Howie Horrocks, the Founder of New Patients Incorporated, along with me once again, as my friend and partner and the President of New Patients Incorporated, Mark Dilatush.
Howie:Well, hello, everybody. Welcome again to our podcast.
Mark: Hi, Howie.
Howie: Hey, Mark, what’s going on?
Mark: I’m 2,214 miles away, and I know that because that’s what my plane ticket every time says every time I fly out there.
Howie: He got that down. You’ve flown out here plenty of times.
Mark: 4,428 frequent flyer miles.
Howie: Yeah, yeah, and that’s just your half.
Mark: I’m not really sure that’s right. I think I’ll measure it. I’ll measure it and call them, call United. Um, yeah. So, we’re, I’m kind of excited about this new series that we’re going to start.
Howie: Yes, Yes, we are. Well, you know, I think what spurred it on was 2018’s right around the corner and dentists should start thinking about their budgeting for next year’s dental marketing budget, right?
Mark: Yeah, their budgeting, their allocation, what part of the market they have, or they should go after based on several factors really, um, and even how it all integrates with their, you know, three and five year plan. And there’s very few dentists that sit back with a glass of wine by our fireplace, and even consider what their three and five year plan is, but it’s kind of difficult to get where you’re going if you don’t know where to hell you’re going, you know, so. So this, this, this series that we were, here’s what we want to do, we want to give you 20 to 30 minutes of take home, I hate to call it homework, because that’s kind of negative but, but take home tasks that you can do easily, quickly, fast.
That’s going to help everyone listening to this podcast series not only understand how you got to where you are in 2017, but how to organize your marketing for 2018 and how everything ties into each other. And, what’s the right marketing mix. And just a whole bunch of topics that we’re going to we don’t even know how many of these are going to be in the series. We know we believe we don’t know, but we believe there’s going to be many. And what we hope to do a half hour at a time is take you from let’s say the third week in October, all the way through to December 31.
So that all your marketing for 2018 is all budgeted. All allocated either in design or done in production or done. All scheduled, or at least the schedule has started. Um, the right mix, the right orchestration. It’s basically what we do for our clients. So, we want to even if you’re not, you know, if you’re not a client, this will help you because we help a lot of a lot of dentists so you can help yourself with this information. So, let’s get started.
Alright, so a doctor, a client comes to us and is right about now, actually. Hey, what should we do for 2018? Should we do anything different? And there’s some dentists out there that do different things just for the sake of doing something different just because they’re bored. Right, and one of the worst things you can do with your marketing is to swap something out that’s working for something that doesn’t work.
Howie: Oh, I know. And you know, what we hear that most is, you know, the dentist, they’re tired of it. They’re bored with their marketing.
Mark: Exactly. They’re like, they’re like they’re the issue.
Howie: Yeah, right. Let me tell you, we know for solid fact that your target audience will get bored way, you know, you’ll get bored with your marketing way before they will.
Mark: Exactly, exactly. So, this isn’t about you. This is you know, the audience, this isn’t about the dentist; this isn’t about your staff. This isn’t about your spouse, okay, this is about marketing and business and dental consumers and they’re not anything like any of those other people in your life. Okay. So.
So when people come to us and say what, you know, what should I change up? What should I do? We normally rely on the budget to give us a guide, right? Because if a dentist comes to us and says, “What should I do?” You know, if we were honest, trustworthy people, we would say, well, hell, Doc, you should do everything here give me $5 million and we’ll make ya famous. Okay. That’s not ever going to help.
Okay, so asking, what should I do is actually the second question. The first question is, is what what’s my limitation? What’s my dental marketing budget limitation? And a lot of dentist’s struggle with this. So that’s one of the first things we’re going to do with you today is we’re going to ask you to go to your QuickBooks or Quicken whatever you use for your payables.
And this week, I want you to create, just get a number of what you spent on the first three quarters of the year on marketing, you know, multiply it and figure out what it would be for a total for the whole year. And that’s not too hard. Right? And I don’t want you to forget anything, okay, you probably have a website, or maybe you have, you know, a piece of software that emails and texts your confirmations and recalls and maybe you have a PPC campaign. And maybe you have a Facebook campaign, or maybe have a direct mail, whatever you have, once you add up all the costs, total number.
I’d like you to determine what percentage of your revenues that number was. And here’s why. One of the not predominant but one of the mistakes that dentists make a lot but not a lot, but several dentists have made is they believe that their market should generate more interest and statistically it will. They under budget their marketing to try and I don’t know, for some reason, prove that they can squeeze more out of their market than any other human being can and then they get disappointed in the results they get from their underfunded dental marketing budget, which basically causes confusion and causes you stress, needlessly.
Really, I mean, all you have to do every and this is what we do. If the practice is producing under a million and a half, we multiply the gross dollars collected by 5%. We multiply that your total collections by 5% from the previous 12 months. So, let’s that’s a number, let’s say, let’s say you produced $800,000, you’re collected $800,000, you multiply that times 5%. And you get $40,000. Now compare the lowest of your dental marketing budget range. I’ll get into that in a second, with what you spent. Where were you? Were you under 40,000 last year? Were you at 28, 36, 45? Or were you at 80,000 when you should have been at 40.
Okay, figure out where you are in relation to where that sweet spot is about 5% of your revenues. Okay? Now, if you’re, if you still need more new patients, and you’re spending 5% of revenues, you might look at what you’re spending it on. Because it might not be working really well, you should be able to grow almost any dental practice in the country. I say almost every dental except for the grievously competitive markets in the US you should be able to grow a practice for about 5% of your collections as a dental marketing budget.
Howie: Right, except in coastal California.
Mark: Well, there’s anomalies, you know, downtown Manhattan, downtown, downtown Chicago. I mean, obviously, there’s some anomalies. But for the most part, you know, for the practices that we serve, you know, in five countries, actually, we’ve proven this out to work everywhere, except for the anomalies. So, if you’re not in an anomaly market, consider comparing what you spent in 2017 to what your 5% of revenue is called for. So, one mistake you might be able to change almost immediately in 2018 is to raise or lower your dental marketing budget. If you’ve greatly underspent, but still did pretty good with new patients, and you just want a handful more. And probably all you need to do is just simply do more of what you’re doing.
Get your dental marketing budget within range and do more of the advertising that you’re currently doing, which is currently working. Okay. If you’re about where you want to be new patient wise, in other words, close to that capacity line of let’s say, eight days being booked out. Um then you’re doing your you must be doing many or some of the things right, your website might be right, or what reviews are probably right, probably doing some form of offline communication to drive local targeted website visitors, you’re probably doing that, right. If you’re within that range, within that 5% range, and you’re within your capacity, eight days, eight workdays, you’re doing well.
There’s really nothing I mean, so I’m going to assume your revenues are going up. They should be if you’re at capacity. On the only reason they wouldn’t is if you’re spending your 5% of revenues on shoppers. That’s when you can get more new patients see your revenues drop.
Howie: Exactly. Yeah.
Mark: So, kind of that’s, that’s, we’ll probably deal with that in a in a future episode. But yeah, so. Okay, so 5%, of trailing 12 month revenues to, to not and to 5% of goal revenue. So, let’s take, you know our example, practice doing $800,000 in 2017, they want to get to, let’s say $900,000 in 2018. So, we know the lowest part of their dental marketing budget is $40,000. Because we multiplied 800,000 times 5% got $40,000. So now all we have to do is multiply $900,000. Their goal times 5%, we come up with $45,000. That gives us a range for 2018. Our marketing budget will not be under 40,000, our high end of the budget will not over $45,000. We should be able to grow this business within that budget range.
That’s what budgets are for. Budgets are there to control costs. They are not there to spend your money um, which might be a good breaking point. I think we’ll have a little bit of a break here, have an advertisement come in and then we’ll come right back.
Howie: Okay, don’t go anywhere we’ll be right back.
Hi, everybody, Mark Dilatush here, I want to take a couple of seconds to remind everyone that the special for all of our electronic products, the free trial is going to expire on October 22. The Free Trial includes all of our electronic products and runs until January 1 2018. So if you’d like to improve your online reviews, and online reputation if you’d like to integrate your website in real time with your practice management scheduler to allow more patients to schedule new appointments, if you’d like access to more social media dental content, and you could ever imagine, if you would like a replacement for your texting, emailing, recalling confirmation software.
If you’d like all those things for free, I’m going to suggest you go to our website, NewPatientsInc.com and there’s a link called products. And then there’s an ADA special navigation there. And then there’s a form, complete that form so that we have time to give you a demonstration before October 18. If you are coming to the ADA show, please visit 2755 especially if you’re interested in this offer, because on October 22, it’s going to evaporate. So thank you for listening to our podcasts. And thank you for listening to this message.
Howie: Hello, we are back again. We are talking about dental marketing budget and allocation and what and numbers and all that stuff for the upcoming year.
Mark: Yeah, and I think one of the things we left with was making sure that your budget range, you don’t go below it, you don’t go over it. And unless you’re in one of those really egregiously competitive environments, you expect to be able to grow your dental business with a 5% dental marketing budget. In our example, we used a budget of 40,000 to 45,000. Um we discussed that budgets are not there to spend your money, they’re there to control your costs. Okay, so that’s why they’re important
Howie: Yeah, many times we run into people and, and I’ve fallen into this myself. So you know, years past budget, let’s see, that’s where my money went last month.
Howie: Not where it’s going to go this month, you know, you get it, get it backwards, it’s really a plan for the future.
Mark: It’s a projection, right. It’s an expense projection. That’s what a dental marketing budget is. So, okay, so if you budget for and, again, we’re just using an example, dental practice. Oh, one thing I left out, I mentioned before, if you’re under 1.5 million for those over 1.5 million, let’s say 1.5 to 2.5, you can usually drop that percentage, about a half a point each year, until you either need more capacity filled, or you’re max capacity. Either one, it’s kind of funny how the numbers work once you get up to that point. But for the most people who are listening to this 5% of trailing 12 months revenues to 5% of goal revenue.
So now the next question is, alright, okay, that’s one that’s my budget resource. I’m going to spend 4000 or $40,000 a year that’s about was that about 3500, about 3500 a month. I’m going to spend that on marketing for my whole business this, where does that money go? How do I allocate that money? And when I allocate that money, how do I diversify my allocation. You probably have heard that mentioned before, very likely from a retirement planner, who told you initially when you know, you were younger, to diversify your holdings, to minimize your risk. You do the same thing when you invest marketing dollars.
So, what do I mean, when I say allocate? Well, let’s take something simple um your website, probably costs you a couple hundred bucks a year to host it and secure it um, there’s a couple hundred bucks out of the budget. I don’t know you might be paying someone to do SEO there’s six or $700 a month, that comes out. Um, that would as long as your SEO is working. And as long as you’re showing up everywhere, for most of the terms, that’s a good investment for almost every dental practice. So that’s a good investment.
So, you’re looking at what do the keepers cost? What do my assets cost me on an ongoing basis. Another one might be another common one might be um the software that you pay for a subscription to do your texting and emailing to your own patient base, whatever that is 3 or 400 bucks a month. Okay, so you start pulling these things out of the budget. And you end up with a number that’s left over. So you pull the numbers out that are that you’re using to fund your assets, your marketing assets, your website, your SEO, on these internal communication packages, anything that’s working keep, nobody’s telling you to get rid of them, to keep them if they’re working, and you can’t get something better for less, or get more for about the same amount of money, keep’em.
When you get done tallying this up, you’re going to end up with a chunk of money left over, it’ll probably be probably 50% of your budget, maybe even more, maybe even 60% of your budget. So that’s going to leave you with, you know, 25-$30,000, just to what do I do with this? Like? How do I reach out to the local community, and make sure they understand the breadth and the scope of the services and amenities and technologies and conveniences that I that I offer? Everyone will know where I am. Let them know where my hours are live know my website, let them know everything about me.
How do I do that? How do I do that with this resource, this 25 or whatever the number is? Now we can get into a discussion about what you’ve done in the past, which is almost always part of our discussion with our current clients. What have you done in the past that has worked well? What have you done in the past that did not work well? And probably the $64 million question is How in the hell are you? How do you know if it worked or not?
Howie: Exactly, the result tracking, yes.
Mark: Result tracking is abysmal. And we’re not. We love all of you, okay, we’re not trying to pick a fight. We’re not trying to insult anyone, right? We’re just saying, I know your staff thinks it’s right. Your patients think they’re right; you think everybody’s right and they’re all wrong. And you walk around making decisions based on wrong data. And that takes you from something that works and pushes you into something that may or may not work, which is always dangerous.
So, before you consider what you’re going to use the bulk of your allocation for 2018. We have to go backward and kind of take a look at what your marketing was for 2017. And if we can cross reference the ultimate source of those new patients as best, we can, I mean, we understand that it’s not a perfect science. And certainly, as your marketing expands, as you get more and more successful, you’re going to be exposed in more or more mediums simultaneously. As your budget grows, mom may see you seven times a month in your local market. She’s not going to remember where I can remember which one the first one was. Hell, you don’t even know which one’s the first one. Okay, so.
So, the more, here’s my point, the more successful your marketing gets, the more muddied that source, water becomes. Okay, so we’re not, we’re not picking on you. We’re not dentists, we’re not picking on your staff, we’re not picking on anybody, we’re not picking on your patients, we’re just saying, you know, as best you can, and here are the ways you do this.
If you do primarily electronic promotion, then you have or should have landing pages, you should have analytics on those landing pages, you should have the names and the phone numbers, or the email addresses or all those things that have been accumulated in your online marketing objectives. You may even record those phone calls, and you should be listening to every one of them. And perhaps calling the ones back who have called not during your office hours. So, you have data to cross reference with your new patient list.
If you’re doing any form of mail, your marketing company can cross reference your mail list with your new patient list and tell you exactly how many of your new patients that came in between date A and date B were also the recipient of your mail piece, whether it was a postcard, a tri fold, a magazine, no matter what it was, okay. Takes a little work, but, boy, when you’re planning out next year, wouldn’t it be nice to know that your 24 or $2500 a month expense was generating what you thought it was generating. Because I almost every dentist says well, hell, I’ll spend the money if I know it’s going to work. Well, let’s know what’s going to work. Thanks for the money.
Howie: Right? Right. That’s where that’s where call tracking comes in and all the cross referencing and all that that’s, that’s how you can plan for the future based on solid, reliable data, instead of just going off of somebody’s feelings.
Mark: Right or going to a seminar and listening to the schmo with the microphone, who’s probably half as qualified as you are to be up there. Okay, so, um, so that’s it. Okay, so now you have your numbers, and you’ve done your multiplication. And now you know, oh, and you’re going to, you’re going to tally up your assets.
What do you have that is functional and working that you’ve already invested in classic example, is a website. If your websites not more than, let’s say four years old, you’ve invested in it, it’s there, it’s probably working for you unless it’s terrible. Okay. So, you know, for the, for all intents and purposes from budgeting standpoint, consider it an asset, you don’t need to pay for a website every year, that’s the same right? Um, if you have one of those.
I don’t know, if you have, well here, okay, if you’re using a different service, let’s say a 1-800 Dentist or something. And if you happen to be in one of the markets, where that works really, really, really well, then keep it. That’s something that you know, that is working for you, if it’s not working, stop using it and reallocate those dollars to something that may or will have a much better pull for you.
Okay, so this week, this week, here’s a recap for this week. Go look at what your patient marketing produced for the first three quarters 2017, do the math to project it out as a full year for 2018. And then go look at your expenses for 2017 for three quarters, projected out to be expenses for 2014. And do your math. Okay, your expenses divided by your gross was going to end up being a percentage of some kind. That’ll tell you where you are. You may need to spend more.
You may be spending too much and not getting the budget and the results is the first indicator of whether or not your marketing is working. So, let’s do that first. Let’s start with episode one. Let’s start there first. And if you want you can start adding your assets. Is my website really an asset? Or is it like four or five years old and looks kind of crusty?
Howie: Is it driving patients away?
Mark: Right. So, is it you know, is it is a evil vampire in a dental chair a good picture to have, you know, those kind of things? Um, you know, does it well, one of the things that made everybody changed their websites over was, you know, responsive design for you know, cell phones and iPads. Okay, you know, if your website doesn’t work on, you know well, look well, operate well, function well, navigate well on a phone or an iPad. And you know, you got to allocate some money next year to a new website.
Mark: Right? Anyway, so that is, we’re going to take these one at a time. Slowly, purposely and spoon feed you these 20-25 minutes at a time over the next however many weeks it takes us. And then they’ll live forever on our website. And they’ll live forever on our Marketing Mastery Facebook group. So that you it doesn’t matter when you want to start, you know, budgeting for the following year. If you want to start in August and you’re a go getter, then they’ll all be there. You can just follow the whole series from basically for the rest of your career.
Howie: That’s great. Well, thank you for joining us once again. We really enjoyed being with you. And we’re going to look forward to being with you again soon. Bye now.