What is the right marketing budget for your physical therapy practice? How should you be spending that budget to get the maximum amount of return on investment? Most practice owners know they have to spend money on marketing. But, many struggle with finding the right balance and budget. Answering a few simple questions about your practice can help you define your marketing goals and the budget needed to achieve them.
Is Your Practice Seeing Growth, Stability, or Declines in Patient Volumes?
Most PT practices experience almost all stages of business development throughout the calendar year. Start by taking a look at your quarterly or yearly stats to determine your overall trend. At that larger view, practices tend to be growing and seeing more patients or shrinking, seeing fewer patients. While growth is always the preferred state of the business, you can be intentionally scaling back due to market or operational constraints.
If you are experiencing a roller coaster, inconsistent growth or decline trends, it could be related to the effectiveness and consistency of your marketing plan. You need to be marketing campaigns and promotions that are attracting new patients and referrals. Additionally, you need to be doing so on a regular basis to keep growing. Once you have a solid, successful marketing program, you want to keep investing in it. Monitor your volume of patients, explore new marketing opportunities. Also, plan your business development to align with your practice’s long-term goals.
What is the Right Marketing Budget for Your Practice?
A standard rule is that you need to invest 7-8% of gross income on marketing to support business growth. However, many practices spend less than 5% of their gross income on marketing, which can lead to declining patient volumes or stagnant growth. Check your current budget by taking your monthly marketing expenses, without including any dedicated marketing staff, and divide by your monthly gross income.
(Monthly Marketing) / (Monthly Gross Income) = % of Income spent on Marketing
What is your practice’s marketing budget? If it is less than 5% of your gross income, you should try to spend at least 3% more on marketing per month and put that investment towards high return projects. We recommend improving your website, expanding your newsletter, or mailing monthly postcard campaigns. If you are spending more than 5%, you are on track! Closely monitor your data and consider scaling up your marketing budget and programs to align with your business development and growth goals.
If you’re ready to budget properly but not sure what’s working, consider a system with results from other practices like these examples. Otherwise, you’ll likely spend years testing and spending more than you need to.