A Sample 6-Year Dental Marketing Budget

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A Sample 6-Year Dental Marketing Budget
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Low, moderate, highputting it all together and
finding the right mix

• Finding the balance between mediums with
  different risk levels and knowing when to pull
  each one into your marketing mix can be
  confusing. So, we wanted to give you a concrete
  example that shows you exactly how the principles
  of diversifying risks look like when applied to a
  dentists long-term marketing activities. Well
  use Dr. Smith as our example, and show you how
  we would determine and allocate her marketing
  budget.

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• Dr. Smith is your basic, average dentist. Her
  practice is general, she practices in an average
  market, and she is average in terms of her
  competitiveness with other dentists in her area.
  Dr. Smith has owned her practice for five years,
  and has invested very little in promoting her
  practice during this time. Here is how we would
  counsel Dr. Smith to set and allocate her
  marketing budget over the next six years to
  support very healthy growth.

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• Dental marketing budgetyear 1 Proposed budget
  allocation
• Actual revenues 600,000 5 Internal
  projects (referrals)
• Goal revenues 800,000 15 Website/Internet
  marketing
• Budget range 30,000 to 40,000 80 External
  projects (targeted direct mail)

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• Rationale In the early years of Dr. Smiths new
  marketing campaign, she needs to focus on
  low-risk mediums while taking advantage of
  marketing mediums whose potential she hasnt even
  begun to explore. Mass media is not an option
  because its too high risk, and because the
  budget wont stretch to cover both mass media and
  the supportive mediumsreferrals, direct mail and
  web marketingshe would need to see good results
  from her mass media marketing efforts.

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• For the next three years, Dr. Smith would
  recalculate the budget based on the formula
  described earlier, and would allocate the budget
  the same way. Now well flash forward three years
  to the next phase

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• Dental marketing budgetyear 3 Proposed budget
  allocation
• Actual revenues 900,000 5 Internal
  projects (referrals)
• Goal revenues 1.1M 15 Website/Internet
  marketing
• Budget range 45,000 to 55,000 50 External
  projects (targeted direct mail) 30 Print media

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• Rationale Dr. Smiths practice has grown over
  the past three years, and although her marketing
  tactics are still working for her, there is more
  room in the annual budget to diversify into the
  next logical mediummoderate-risk print media.
  This, of course, assumes that her website and her
  continual direct mail campaign are still
  providing positive return. If she is doing it
  appropriately, it will be.Now, lets flash
  forward another three years

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• Dental marketing budgetyear 6 Proposed budget
  allocation
• Actual revenues 1.3M 5 Internal projects
  (referrals)
• Goal revenues 1.6M 10 Website/Internet
  marketing
• Budget range 65,000 to 80,000 30 External
  projects (targeted direct mail) 20 Print media
  35 Mass media

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• Rationale Dr. Smiths practice has grown even
  more as her marketing efforts have paid off. She
  will still funnel a portion of her marketing
  budget into the low- risk mediums that continue
  to perform well for her, but now that her
  revenues have increased and she has a bigger
  overall marketing budget, she can afford to
  diversify into higher-risk mass mediums. In the
  coming years, she will have the luxury of taking
  slightly bigger risks with her marketing budget
  without cutting into her bottom line, allowing
  her to experiment in these mediums to find a
  formula that offers higher ROI than the
  lower-risk mediums.

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• SUMMARY Throughout these first six years, Dr.
  Smith relied on reliable, low-risk marketing
  fundamentals to increase her practice. Tactics
  such as referral campaigns, web marketing and
  direct mail gave her solid returns and helped her
  grow her revenue and her marketing budget. As her
  marketing mix evolved to make the most of a
  growing marketing budget and a maturing strategy,
  she started allocating an increasing portion of
  the budget to higher-risk mediums.

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• Being covered in a wider range of mediums
  allows her to benefit from the synergy that
  happens when wider coverage increases and focuses
  consumer awareness. Participating in higher-risk
  mediums also allows her to benefit from
  potentially higher returns on her marketing
  dollarswithout exposing her to unacceptable risk.

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• Every practice and practice area present their
  own unique marketing challenges, so no two
  marketing strategies will be identical. However,
  the example above illustrates the fundamental
  principles of marketing budget allocation, and
  provides a good general guideline in helping you
  minimize risk and make the best use of your
  marketing dollars.