Dental Practice Management and Your marketing budget—part 1
In the dental practice management of marketing what should you be spending on your budget? You’ll hear the majority of “experts” state 2-4% and a smaller group proclaim 6-7% in writing and from the podium. Unfortunately, what was right 20+ years ago is 100% wrong today.
Where did low figures like 2% even come from? Well, it evolved from when dentists were just starting to market before the proliferation of insurance discounting was an industry norm. It started getting reported back then and, well, it stuck as “truth.”
Now it’s a direct hold-over from a different reality which no longer exists and isn’t coming back.
On the occasion when I get on a podium at a major meeting, I’ll query the audience on what % they spend on external marketing. It’s not unusual to see a close majority of hands go up proclaiming ZERO. The remaining majority fall under the 4-5% mark and only a tiny handful state they invest 10%+.
In truth, there was no one in the room investing less than 10%. Many were actually devoting 15-30% of gross fees to the dental practice management of marketing.
How’s that? Well, if you write-off anything based on an insurance contract (at this point roughly 90%+ dentists do), then your write-off from your full fee IS a marketing expense. Except in this case, regardless of how big the expense, YOU don’t decide where it gets spent or on what type of patient/case it is spent attracting. The insurance company does that by simply putting your name on a list. Delta does some direct to consumer marketing for its “member” dentists but the majority of marketing for a carrier goes into (surprise), finding more groups to administer plans for and if they have a good enough batting average, become a defector local monopoly carrier which results in practices being so tied to the carrier they have little option beyond grinding it out under whatever new rules and restrictions come to them.
To make matters worse, often times there’s a set fee schedule from a carrier (call that discount #1 below full fee) and then dependent on a particular plan offered, discount #2 and #3 join in for a double and triple whammy! Those boys and girls are the ones who spend 30%+ of their fees on the dental practice management of marketing and still hold up their hands during my presentations and proudly say they spent 2% last year.
If you want to learn more about how to break away from the insurance vampire, check out my best selling book on Amazon. You could also join my member dentists who now know how to sell based on my proven ethical sales system.
