Marketing to Budget, Budgeting to Market
- Posted on: Mar 12 2014
Marketing to Budget, Budgeting to Market
As aesthetics practice marketers with more than two decades of hands-on experience, we at beautiful forever have seen repeatedly that annual marketing plans are useful roadmaps which allow physicians and practice managers to plan ahead, then work that plan throughout the coming year. As we consult with physicians and practice managers across the country, we continue to see that the key element in any sound annual marketing plan involves the marketing budget. For aesthetics practices to succeed in the coming year, working to budget is just as important as working to plan. When the marketing plan and the marketing budget are combined, the budget can be measured in terms of return on marketing investment (ROI), ensuring that marketing activities are indeed investments in a more profitable practice operation.
Before looking at the annual marketing budget – which will be used to define and restrain the marketing efforts to ensure a positive ROI – begin by looking at the elements needed in an annual marketing plan, then determine the budget allocation and potential ROI for each element.
Website – your practice website has become your single most important marketing and promotion tool. Your website is your “virtual brochure” – the key element in prospective patients’ decision to try your practice. It is not enough to have a website; you need to have one that is dynamic, ever-evolving representation of the best your practice has to offer. Your website also becomes your “virtual yellow pages” ad – the primary means by which people who are looking for the right physician or medical spa find you.
Search Engine Optimization (SEO) – with the Internet having effectively and completely replaced traditional yellow pages – long a stalwart of practice marketing and promotion – it has become essential to rank high in organic searches within your market. If your practice website isn’t within the first five-to-ten listings, it likely won’t be found by people used to accepting the first-page listings as sufficient to their needs. Marketing-oriented physicians and practice managers have come to realize that, while they may not understand SEO, they know they can’t effectively grow their practices without an effective SEO program.
Keyword Advertising (SEM) – to be successful as a consumer-support business – which is what every self-referral medical practice is at its core – Keyword Advertising, the most common and effective form of Search Engine Marketing, is critical. However, this is a complex, always-changing practice – to succeed; a Keyword Advertising program requires a professional. It is not something amateurs can hope to do on their own. However, done right, Keyword click-through Advertising will channel interested prospects to your website, and from there, to your practice. Because Keyword Advertising is so easy to track, it is the single most measurable marketing. But unlike so much of real use in practice marketing, you will know at a glance if your key-word investment is generating a positive revenue return (ROI).
Here’s how it works. Using Google Ad Words (as well as ad-word services for other search engines, including Facebook – though at this juncture, Google is far and away both the most common and most effective tool to use here), you can purchase a key search term for a specific geographic area. Then, when someone in your market area uses that term for a search, your link will appear – and each time they then click through to your site (which is why it’s called “pay per click”), you are charged a fixed and low and specified fee. Some businesses use no other marketing tool, and still generate profits – this is not recommended, as it tends to be costly and to leave business on the table – but it does demonstrate the power of keyword PPC advertising.
If you have chosen your key words well, your click-through prospects will be well-qualified AS prospects, and this will lead to new clients and new business. This is akin to a 21st Century, automated Yellow Pages listing, one that leads searchers to become prospects – then, if your website is compelling – clients. However, there’s a real art to using SEM keyword advertising, which is why we recommend using a professional to set up and manage this program.
Social Networking – this marketing promotion approach has evolved, in just the past three-to-five years, from an interesting idea – almost a hobby for practice managers who like to “play” online – to an essential and dynamic marketing tool which has proved to be incredibly effective in attracting patients to your website, and, ultimately, to your practice. Social Networking requires two elements in shared priority – content (reasons for people to come to your Facebook page and your website) and conversation (reasons for people to become and stay connected). Content and Conversation – these take time and effort – but social networking will not succeed without a generous measure of both of these.
To be successful in Social Networking, you need to place useful content online – making use of White Papers and blogs to present that useful content in easily-accessible formats – and you need to be ready to use the most effective tools:
Facebook – several years ago, Facebook eclipsed “MySpace” as the leading online social media community, and Facebook has since attracted more than 700 million users world-wide, including a tremendous number of American adults, who use it for entertainment, information exchange, friend-building … and commercial-vendor decision-making. A presence on Facebook means not only creating a fan page and attracting followers, but it means a sustained commitment to ongoing, regular and frequent outreach to your friends and fans on Facebook via blogs, video blogs and shorter posts, as well as continuing a program of engaging your Facebook friends in dialog, instead of just talking down to them.
Twitter – what said about Facebook applies in equal measure to Twitter – except for one fact: the messages must be kept to 140 characters – generally about 20-to-30 words each. Twitter success requires regular and frequent posts – optimally several times per day – along with a willingness to engage others in conversations, rather than just talking down to them from a position of expertise. Twitter can be a useful feed to Facebook, as well as to events held at the practice (or elsewhere); in addition, Twitter has several other useful purposes.
YouTube – Remarkably, YouTube is, after Google, the most prolific search site on the Internet. When people look for information on YouTube, you want to make sure that you are there to be greet them, and to present – in an ongoing series of short (3-5 minute) videos on specific topics of interest – to give them reason to check back with you, to become Facebook Friends and Twitter Followers, and to visit your website (and then your practice). Video blogs are useful, but video also allows for compelling testimonials. Video also permits you to record and post information about breaking news in your practice’s area of specialization – and it can be fun, critiquing celebrity facelifts (for instance) to present your view on what true enhanced beauty should look like. YouTube does not require high production values – in fact, too high a production value can turn people off, since it looks scripted instead of spontaneous. Each YouTube post should be promoted on Facebook and Twitter, at least.
One of the best things about Social Networking is this: unlike advertising or high-end brochure production, it does not require a significant investment. However, it does require a time commitment. As a result, frequently, practice managers will retain the services of a ghost writer to produce online content – to be effective, you have to produce useful content on a regular and frequent basis – but beyond that, the costs are nominal.
When active in Social Networking – especially if you have multiple accounts (practice accounts, as well as individual accounts for the physicians, practice manager and key staff, for instance), it helps to use an account posting tool such as TweetDeck or HootSuite, which permit you to post to multiple accounts from one location. For small accounts, these are free – for larger accounts, the costs are nominally – under $10 a month – but the time they save and the improvement they create in your social networking are significant and measurable.
A final note, this regarding compliance with HIPAA – when physicians or practice representatives are posting on Social Networking sites, it is critical that strict compliance with HIPAA and other governmental and professional-society guidelines be followed.
Events – Special events that bring individuals into the practice environment are exceptionally effective ways of generating new prospective patients. Events can be tied to calendar themes (Spring “get ready for the beach” events) or other themes (look your best for St. Valentine’s Day). The importance of an Event is that it connects prospects with (and brings back patients to become reconnected with) the physician and the practice staff. Events can also become fodder for Facebook and Twitter promotions, and can provide videos that can be posted on YouTube.
Optimally, you should hold events at your medical aesthetics practice facility at least monthly; a minimum would be quarterly, and that may be the place to begin if you are not experienced in staging events.
The keys to successful events include:
- Positioning the physician as an expert who is enthusiastic about the field and likes to share that enthusiasm and expertise with patients and prospective patients
- Having a theme that attracts people
- Finding professional co-sponsors (pharma companies or equipment manufacturers) who will cost-share for programs involving their products or services
- Finding community co-sponsors who will help to attract attendees – either to the series or to a specific event
- Tracking (see below) to measure the long-term financial impact of each event
Public Relations – PR, done right, is remarkably effective in generating awareness and interest, and motivating positive action. This effectiveness has been compounded by the popularity of the Internet (and Google searches), as well as by the access to the Internet offered by firms such as BusinessWire ensures that every press release is searchable, as are all the media coverage that PR generates.
PR is most often seen in terms of press releases: short and informative “news articles” written for easy use by editors – but with a dual purpose of intriguing editors enough that they’ll want to create their own print, broadcast or online news article or interview, one designed to inform their audiences about your medical aesthetics practice. When press releases are issued via a professional placement service such as BusinessWire, they not only reach targeted editors, they also “live” on the Internet where they can be found by prospective patients and where they can enhance SEO services.
Press releases and media pitches, in addition to being posted on BusinessWire or some other media release placement service, should also be emailed to local and industry editors, radio/TV talk show and TV news producers, as well as topical bloggers other media gatekeepers – this is done to both build relationships and to give your releases and pitches a second chance of being discovered by the right media decision-makers.
Press releases and their close kin – press pitches and media advisories – are like all of public relations: To be effective, they require an experienced PR and media relations professional who understands the rules of media relations. However, because PR and media relations are so much more cost-effective than advertising, your PR program is well worth the investment required to bring in such a professional. Done right, PR not only generates new clients, but it supports and reinforces all other marketing and promotion activities.
Direct Marketing: What was once considered a critical promotion tool – direct mail marketing – has been almost entirely replaced by direct email marketing. It is far easier to target – all you need is the right list – and far less costly than direct mail marketing. The key to successful direct email marketing is an effective list of people who have agreed (opted in) to receive emails from certain sources or on certain topics. Certainly, the list of practice patients should be the core of any email marketing campaign; however, there are refined and focused lists of people in the target demographics that can be rented or purchased – these are also available to enable your practice to reach out beyond current patients and recent prospects.
A traditional aspect of direct marketing involves the creation of brochures and other printed marketing tools – called “collaterals” in the trade – has broadened in scope to include digital marketing tools. These can include HTML-frames for email marketing messages, digital press kits (see PR) and even “virtual brochures.” Regardless of their form – print or digital, or even audio or video – the importance of professional collateral communications tools cannot be overestimated. They present a professional and appealing “face” to the market, defining the practice and helping to sell new clients.
Advertising: While it is generally the most costly means of marketing, traditional media advertising (newspapers, magazines, radio and TV), advertising continues to be an effective support tool in practice promotion. The days when advertising is the most important marketing tool are long past, but for some services or products, nothing is more effective than targeted media advertising. As with public relations and social networking, support from skilled professionals can make all the difference between wasting money and generating a positive marketing/advertising ROI.
Grass Roots Marketing – Networking: While mass-communications marketing and promotions programs such as PR, advertising, Keyword Advertising/SEM and Social Networking are both necessary and essential, they should not be done in a vacuum. Grass roots marketing – what others call “networking” – involves the physician, practice manager and often key staff members attending third party events (such as Fashion Week soirées or local “society” events), becoming involved with civic and social organizations – and even putting staff members out in the community as de facto sales reps – all can be advantageous. For instance, in a college town, approaching sororities with offers of “makeover parties” can be a big winner; while in other communities, attending charity events and offering service or product “door prizes” or raffle items can be important. The specifics aren’t as important as the fact that you’re “out there” on a regular basis, visible and involved.
Referral Development: Perhaps the most cost-effective kind of medical aesthetics practice marketing is referral development – a fancy name that means asking for and motivating patients to refer others to your practice. The difference between “referral development” – which, when done right, is remarkably effective – and just “asking” for referrals can be the difference between night and day.
With no incentive other than “being a nice guy,” relatively few people will make the effort to make a referral. If someone asks, “where do you go for ___,” most people, and especially satisfied customers, will answer and make the referral. However, to get people to take the initiative requires motivation. And motivation needs to be something tangible, something more than a heartfelt “thank you.”
Motivation can involve a significant discount – 20% off on your next ___ service – or it can involve either cash (a powerful motivator, but not recommended because it doesn’t bring you more business from the referral source) or a free service. The ideal motivator is one that:
- Incentivizes a patient to make a qualified referral – and to keep on that referral until the new person becomes a patient herself – without costing more than the value of a new patient
- Brings the person making the referral back to the practice for a new or repeat-visit service.
- Can be “banked” – where, for five qualified referrals, a 20% discount becomes a free service
- Generates a positive cash flow from the new patient, even after providing the incentive to the patient making the referral
- Creates goodwill among existing patients and new “just referred” patients
Social Networking and direct marketing can both be very useful in “internally” promoting referral development programs to existing patients, and such programs are also useful “fodder” for the media relations/PR program.
Tracking: There’s an old saying – if you’re lost, it doesn’t matter if you’re making good time or getting great mileage. In the medical aesthetics field, when it comes to marketing, if you don’t carefully track your new business – if you don’t take the time to figure out where your new business is coming from – you will never know what marketing and sales-support programs are working. Once you know what works for you, and what doesn’t, you can focus your marketing investment on success and dramatically enhance your bottom-line ROI.
To track effectively, you need to ask every caller – and especially every patient – how they first heard about your medical aesthetics practice. However, there is more to ask, and too often, people stop at that most superficial (and unhelpful) question. Excuses include “we don’t have enough staff” or “our receptionist/intake coordinator is too busy. However, when you realize that effective tracking can save you thousands by identifying poorly-performing marketing efforts – and it can make you tens or hundreds of thousands of additional dollars by pointing out what works, the extra time and effort of tracking properly pays real dividends. Because people almost always hear about you several times, from several different sources, before making inquiries or becoming a patient, it’s important to probe below the surface. Here is what to ask:
- How did you first hear about us?
- Did you also hear about us from ____? (list, generally, all of the marketing initiatives which could have reached them)
- Did you see our new ad? (print, radio, TV, online)
- Did you read about us in the recent newspaper article (or radio or TV news coverage)?
- Have you read our blog or visited our website?
- Did a friend ever discuss our practice with you? If so, can you remember who (if yes, tell them that we like to say “thanks” to our patients who make referrals so they won’t feel like they’re betraying a confidence)
A few quick questions like these will give you a much more complete picture of how effective your marketing is being, and what is working the best.
Using this information – especially how you use this information – is critical to overall practice marketing success. Once you know what’s bringing prospects or patients in, it is helpful (though a bit of a challenge) to compare each referral with dollars-and-cents procedures.
For instance, a press release on a new procedure might only bring in three patients – but if those three patients are big-ticket service purchasers, then the release paid off. However, if an ad brings in dozens of patients for a free or deeply-discounted service (and they never come back), then while volume was high, the profit tied to that ad would be low indeed.
So track carefully, and compare your tracking information to bottom-line revenue. It may seem like a lot of work, but done properly it can be the most cost-effective work you can assign to your staff. Period.
Budgeting: Once you have completed the marketing plan, it is time to apply your budget to the program, and – using tracking – to measure your marketing ROI. As a rule of thumb, for a start-up business or service, marketing and sales support should be budgeted at 20% of anticipated (targeted) revenue for the first 12 to 24 months – most use 18 months as a target for this. This level of marketing investment should continue until practice growth has reached your initial stage target, ideally within 12 to 18 months, though 24 is more the rule.
After that, marketing budget allocation as a portion of total revenue steps down.
During a strong growth phase, the marketing investment should be 12-15 percent of targeted revenue during the period (generally calculated in 12-month increments). This level of marketing will sustain growth at an accelerated rate.
Once growth targets are reached, but to stay on top of competition and expand the market incrementally, a marketing budget of 7.5-10 percent of targeted revenue will maintain market position against competitors. This generally occurs 3-5 years into the lifecycle of the product.
Once product/market maturity has been reached, generally after 5-7 years post-launch – a position referred to in marketing texts as “cash cow” – marketing investments of from 3.5-5 percent should prove sufficient. However, before reaching this position, it is wise to re-invent the business, product or service and re-launch in order to fuel a new and dramatic growth cycle – at which point, you go back to the (budgetary) beginning.
Many physicians and practice managers unschooled in the impact of marketing see these numbers and recoil – but that is only because they do not realize that marketing is, indeed, an investment … and that done properly, as is spelled out in this article, marketing has an ROI and that ROI should be both positive and significant. Investing enough to properly launch, grow or sustain a medical aesthetics practice will pay handsome returns on the bottom line.
Having a budget based on revenue target is the first step; applying this budget to the range of marketing and PR options is the “job” of the marketing plan. In developing this plan, covering all of the elements above, costs for all elements of the plan should have been identified and prioritized. This is one reason why working with a marketing professional can be a major help – that individual or team should have both the costs in hand and the likely priorities identified. Unlike the “marketing as a percentage of revenue” rule-of-thumb industry standards, there is no standard one-size-fits-all allocation formula (so much for ads, PR, social networking, etc.). That’s where the professionals come in.
However, once the program is up-and-running, and once the tracking program is providing useful data on the relative effectiveness of each component of the marketing plan, refining the budget to reinforce those efforts which work most effectively while down-budgeting marketing programs which produce a lower ROI will become apparent – which is why tracking is so critical to overall marketing success.
Conclusion: Medical aesthetics practices grow in terms of both volume and profitability based in large part on the effectiveness of their marketing efforts, which is one reason why beautiful forever offers free marketing assessments to medical aesthetics practices.
When it comes to marketing, nothing beats word-of-mouth, but nothing is harder to deliver (on schedule) than effective word-of-mouth. Without being able to count on this, practices can grow by making use of these marketing tools. To be successful, create the plan, then apply the budget and pare down the plans to those most likely to generate measurable results. Work the plan, work the budget, then – if you do it right – stand back and watch your practice grow, generating a positive marketing ROI.