Episode #348: How Much Should I Spend on Dental Marketing?, with Xaña Winans

the best practices show podcast Oct 25, 2021
 

There is no magic formula for marketing. But there are ways to make good investments. And to help you figure out how much and where to spend on dental marketing, Kirk Behrendt brings back Xaña Winans, founder and CEO of Golden Proportions Marketing, for a guideline to better marketing decisions. If you want to invest in your own success and get ahead of your competition, listen to Episode 348 of The Best Practices Show!

Main Takeaways:

  • 55% of dentists are spending a minimum of $1,000 a month on marketing.
  • A quarter of practices are spending over $5,000 a month on marketing.
  • Lead generation is one area where you will see results.
  • Invest in digital, such as SEO, paid search, and online reviews.
  • Tracking is the only way you'll know whether you're getting a return.
  • Recording calls is the best way to see if your marketing budget works.
  • Your marketing needs to be consistent, and you need to give it time.
  • There needs to be commitment from dentists and their practices for results.

Quotes:

  • “[Determining a marketing budget is] important because money is a driving factor for everybody. It’s determining, ‘How do I spend enough money to get the results that I want, but I don't waste money that I could be taking home to my family?’ So, if you are just guessing how much money to spend, it’s going to constantly make you stressed and wonder if you're doing the right thing, ‘Am I spending it in the right places?’” (06:14—06:37)
  • “[Jim Du Molin] did a huge survey to find out what doctors were spending. And over 55% of doctors are spending a minimum of $1,000 a month, which doesn't sound like that much. But what was interesting to me, just about a quarter of practices are spending over $5,000 a month on marketing, which is way more than I think most dentists would expect. They think, ‘I can just rely on referrals and internal marketing, absolutely free.’ But I'd tell you what, if your practice isn't growing, that's probably why, because your competition is outspending you. They're getting brand awareness that you just don't have.” (07:55—08:30)
  • “Once you're up and established, if you are cruising, you're a full practice, you've got tons of referrals coming in, you're still going to want to spend at least 2% to 3% of your gross collections every single month, if only because 8% of the American population moves every single year. You're going to, just by sheer people moving out of the area, lose some of your patients, so you have to keep investing.” (09:13—09:41)
  • “Anything you spend on, you should be able to measure it and make sure it has a good ROI.” (10:39—10:44)
  • “Your ROI is really going to depend on what you're measuring. There are actually five different places where your marketing money goes, and you have to measure ROI based on where it’s spending. The first thing is foundational stuff. And it’s really difficult to measure an ROI on things like designing a new logo, building a new website, doing a setup for SEO or paid search. Those are things you have to have, but they're usually one-time or one every couple of years expenses. So, that, don't expect ROI. It’s just an expense. That's foundational stuff.” (11:34—12:10)
  • “You're going to spend money on things called subscriptions. When you have Weave and LocalMed and RevenueWell and Swell, and some of these other review sources and online scheduling, they're still marketing expenses. You have to count that in your marketing budget. The ROI for those can also be really difficult to measure because they're more like internal marketing tools. They're things that you need to keep patients engaged, so I wouldn't be looking for a big ROI there either.” (12:12—12:44)
  • “Where you're really going to see [results] is when you're spending money on lead generation. So, paid search, SEO, direct mail — if it’s relevant in your market, television — if it’s appropriate in your area, or radio, that is where the money really comes into play to see a true return on investment.” (12:45—13:05)
  • “What matters is the lifetime ROI. I would say something like paid search, you might get 400% or 500% return on investment the first year. But those patients stay in the practice, and they continue to bring more money to you, and it will grow and grow and grow over time.” (13:28—13:46)
  • “SEO, search engine optimization, the first year, you might get a 300%, 400% ROI. By the third, fourth, fifth year, I usually see 30,000% return on investment. So, all of the marketing that you're doing, you've got to give it enough time. And over time, it will prove itself to be absolutely invaluable if you are doing the right thing and you're measuring it to prove that it actually works.” (13:48—14:17)
  • “There are three big numbers that you have to measure when it comes to marketing. One is your cost per lead, which is, how much did it cost for the phone to ring with a potential new patient opportunity. But you and I know doctors are not converting 100% of the calls that come in. On average, they're probably converting 50%, 55%. So, that means one out of every two patients that you spend money to turn into a phone call is going to somebody else.” (14:59—15:28)
  • “You've got to measure your cost per lead, your cost per acquisition, which is the actual cost to acquire the patient, to turn them into a new patient. And then, finally, you've got your lifetime value with a patient. So, it’s going to depend on the strategy. Let's say it’s an internal referral, someone who referred them to you. That's not a zero-dollar cost for acquiring them, because a lot of practices send a little thank-you gift to the patient who referred them, or they're doing some promotion to let people know that they are accepting referrals. There's still a cost for that.” (15:29—16:06)
  • “The cost of an internal referral, sure, it’s cheaper. We’d love 100% of those. But reviews and online search are almost replacing a lot of those referrals that we used to expect to come in just generically on their own. So, frankly, those costs for those new patients that used to be free are now, like SEO patients, probably a good $50 to $75 per new patient that you bring in. But honestly, that's cheap when you consider the lifetime value of a patient.” (16:07—16:38)
  • “You have got to be investing when it comes to digital. Unless you happen to live in the most incredibly rural area where you have one or two other doctors in the radius where you're pulling your patients from, you've got to invest in SEO. You've got to be investing in paid search and online reviews. Digital is where people are looking for dentists and where they're asking their friends for dentists. So, you can just expect there's going to be a cost to acquire those new patients. But they can be really good patients if you treat them well.” (17:34—18:07)
  • “I see the average lifetime value of a patient typically being a good $10,000-plus. So, if it costs you $50 to acquire that patient, that is the cheapest cost for the best return on investment you're ever going to find. It’s absolutely worth doing.” (18:08—18:25)
  • “The only way that you know [you're getting a return] is to actually track it. There are two ways to practice this track. One is using a call tracking number. And that call tracking number will tell you how many leads you've got. If you’ve listened to the calls or somebody else has listened to the calls, you can see how many actual patients you got. The only way to know your actual return on investment is to then tie those calls to the amount of revenue that's produced by that patient.” (19:05—19:30)
  • “The other way that people do it, and I think there's still some value to this, is actually asking your patient, ‘How did you hear about our practice?’ I love it when I look at the referral sources for a practice. Usually, the team is just writing down whatever the patient told them. So, if the patient is asked, ‘How did you hear about our practice?’ and the patient says, ‘Website.’ The team writes down website. If the patient says Google, they write down Google. If the patient says internet, they write down internet. They're all the same thing. So, you've got to have a way to be able to bring all that information together to really know the true ROI. Otherwise, it looks really deluded. And that's if they're recording it in the first place.” (19:41—20:27)
  • “I see this every time we connect somebody. 50% of their patients inevitably have no referral source. Nobody knows where they came from. They just materialized out of thin air.” (20:28—20:39)
  • “The calls are amazing. They tell you everything. Frankly, recording the calls is the best way to see if your marketing budget works, because you're not just seeing how many calls did I get, but you can hear about the quality of the patient that you're generating. Is this just an emergency patient? Is this someone who’s looking for really good service like, ‘I need implants,’ or, ‘I want cosmetic care’? If you're not listening to your calls, it’s a guess.” (21:35—22:02)
  • “I think once you know that there's a potential for a peer or your boss to listen to your call, you want to put on your best game face. You're more conscious of the conversation you're having with a patient. I think it’s critical [to have call recording]. This marketing budget is a lot of money, and this is the reason doctors are scared to spend it in the first place, is because they feel like it’s just been deceitful, that they don't know where the money went. They don't know where the money went, they don't know what they got. They felt like it was wasted. If you're not recording calls, if you're not measuring this stuff, then why would you spend a big amount of budget on marketing?” (23:20—23:56)
  • “There are a couple of big things where doctors really waste their money. The first one, and my favorite, is, ‘My nephew builds websites. He’ll do it for me for free.’ Usually, you get what you pay for.” (24:07—24:22)
  • “The second [place where dentists waste money] is, ‘When everything is good, we don't need to spend money on marketing. I'm going to put it somewhere else.’ And instead, it needs to be consistent. It needs to be every single month that you're doing the same thing over and over and over again. So, you're totally wasting money if every time you get a little downturn, maybe your summer is slower, maybe you're heading into September, and all of a sudden you have to ramp things up again. There's a learning curve to all of this. Even Google Search will typically tell you it takes about 90 days for it to learn your ad and your market and how people are responding and start to spend your money efficiently and get you the best results. You can't just turn it on and off. It’s a complete waste of money.” (24:36—25:22)
  • “If you think about it, we never know when a patient is ready to make a decision to call the practice and say, ‘I need a new dentist.’ As a matter of fact, if I remember this statistic correctly, only 6% of patients a year are looking to change practices. So, if you're trying to capture new people, you have always got to be in front of them. There is not this giant glut of new patients constantly waiting to run from location to location. So, if you're not consistent, then you're missing opportunities every single day.” (25:45—26:17)
  • “It takes typically eight or nine times for someone to see your message, whether they’ve read a review about you, or they’ve been on your website, or they’ve seen a paid search ad, or they saw something on social. It takes eight or nine times for the brain to even register that they saw it. So, if you're going in the market, and then coming out of the market, and then try a little thing, and then disappear again, nobody has the chance to consistently hear that message over and over and over again in order to actually respond to you. It’s a gigantic waste of money to do it that way, in my mind.” (26:19—26:52)
  • “A good marketer should try things, test things, make adjustments. There is no absolute magic formula for this. If there was, we would all be making money hand over fist. And it doesn't work that way. Instead, you've got to test. You've got to be consistent. You have to listen to advice, but you have to give things long enough to work. Don't just try something for a month and say, ‘I didn't see a result. I'm done.’ It’s that consistency. Give it six months. Give it a year. Adjust it, tweak it. That's where you see your return on investment.” (27:49—28:25)
  • “There are so many factors that it depends. So, when I say you might want to spend 4% to 6% of your budget, it’s going to depend on if you live in the city or if you live in a rural area. It’s going to depend on how much competition you have. Generally, it’s one dentist per 2,000 patients, because we know half the population doesn't even see a dentist. It’s going to depend if you have a new competitor who came in who has this really aggressive budget who just wants to go crazy spending on marketing. It depends on how fast you want to grow. It depends if you're a general practice or a specialty practice. So, those percentages are guidelines. What's really important is to figure out, what are my goals? What am I trying to accomplish here? How many new patients do I want? Do I want to change my reputation? Is it a certain kind of patient? That dictates what your budget looks like, overall, and how fast you're going to get there.” (30:34—31:31)

Snippets:

  • 0:00 Introduction.
  • 3:36 Xaña’s background.
  • 5:42 Why determining a marketing budget is important.
  • 6:58 How much should I be spending on marketing every month?
  • 8:30 What percentage or dollar amount should I be spending?
  • 10:05 Return on investment: what to expect.
  • 14:38 Cost of a new patient.
  • 16:53 You need to invest in digital.
  • 18:25 How do you know you're getting a return?
  • 21:21 Calls tell you everything.
  • 22:29 Record calls for accountability.
  • 23:56 The biggest waste in marketing.
  • 25:23 The importance of consistency in marketing.  
  • 26:52 If you're not tracking, you have no way to know if it’s working.
  • 28:31 Be committed for results.
  • 30:21 Last thoughts on how much to spend on marketing.
  • 31:57 Smart Market Dental and Golden Proportions.
  • 35:16 Xaña’s ACT Dental U Master Class.

Reach Out to Xaña:

Xaña’s full-service company website: www.goldenproportions.com

Xaña’s email: [email protected] 

Xaña’s social media: @xanaathena

Resources:

Smart Market Dental: https://smartmarketdental.com/features/practice-analytics/

Jim Du Molin, The Wealthy Dentist: https://www.linkedin.com/in/jimdumolin

Xaña Winans Bio:

Xaña Winans is Golden Proportions Marketing’s CEO, founder, resident visionary, and lead strategist. As one of the industry’s most sought-after dental marketing consultants, she collaborates with our team on a diverse group of clients to create strategic marketing solutions with measurable results. Her passion for dentistry is evident in the work that she does and in the award-winning products GPM produces to help your practice thrive.

Around the office, we all know that Xaña’s knowledge and drive extend well beyond GPM’s walls. You’ll often find her lecturing at some of dentistry’s biggest conventions and study groups as a recognized expert and international speaker on dental marketing. Couple that with over 20 years’ experience of marketing dentistry, and it’s easy to say that she’s pretty much seen it all.

Xaña’s been married to an accomplished cosmetic and restorative dentist, Dr. Larry Winans, for over 25 years. Their two incredible children, Ryder and Savannah, regularly remind their parents that they are successful adults, so now all parenting attention is delivered to two furry companions. She may also turn up courtside with Jen Bernstein at any number of Bucknell basketball games, helping cheer the Bison on to victory.

 

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