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David Edwards is an accomplished marketing professional with 30 years of experience. He has worked in various capacities in advertising agencies, from college intern to general manager. Before opening Edwards Marketing Strategy, he spent 7 years as Director of Marketing for a Dallas based downstream energy marketer and aviation ground handling services provider, who ranked in Forbes top 200 privately held companies. 

 

An ADDY Award winner, Edwards has managed local, regional and national clients and projects in the B to B and B to C space. He holds a BBA in Marketing and a BBA in Advertising and Public Relations from the University of Arkansas at Little Rock, where he was a member of the Chancellor’s Leadership Class and active in campus music activities.

 

Edwards earned an accreditation in Digital Marketing Strategy from the SMU CAPE Continuing Education program in December 2016, and is currently pursuing his APR accreditation from the Dallas Chapter of the Public Relations Society of America.

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Setting a Medical Practice Marketing Budget.

  • Writer: David Edwards
    David Edwards
  • Jan 12, 2017
  • 2 min read

For most business operators, including medical practices, the enthusiasm for spending money on advertising and marketing lies somewhere between taxes and insurance premiums. It’s unpleasant to think about, but with shrinking margins and increasing operating costs, your practice is faced with the necessity of adding more patients. If you were growing avocados, you could publish tasty recipes or post blogs on the health benefits of the wonder food (WebMD has a great article) to increase demand. But as a medical practice, you cannot “create” demand for your product – you must take market share away from your competitors, or at the very least, maintain what you have in the face of a competitive market. The scenario leads to the burning question; “how much should I spend on marketing?”

 

Before getting into the formula itself, let’s set the record straight. First, digital marketing is the most practical and effective advertising channel for private medical practices. Second, you must have a strategy. Expanding on each of these topics will be featured in future posts.

 

Now, to allocate your budget. There is no exact or perfect answer. There are simply too many variables in play to develop a formula for an exact amount. However, sba.gov and medicalexecutivepost.com, as well as several other firms who focus exclusively on medical marketing, recommend some degree of this formula for budgeting based on a percentage of revenue.

Start with 5% of annual gross revenue and then adding or subtracting percentages as follows:

  1. Subtract 2% if “you receive the majority of your patients through physician referrals.”

  2. Add 2% if “you have any high-profit or cash-pay products/services.”

  3. Add 5% if you have “recently introduced new high-profit products/services such as aesthetics, concierge, diagnostics, or nutraceuticals.”

  4. Add 1% if you are “located in or near a major metropolitan area.”

  5. Add 2% if you are “losing market share to another business in your area.”

  6. If your current efforts are working (i.e., producing a positive ROI), consider ramping up your marketing spending to further augment your ROI.

Remember, the ultimate purpose of your investment in marketing is to effectively communicate to your industry colleagues, current and future patients, even your internal staff, the value proposition of your practice. Advertising is a fertilizer that accellerates the growth of communicating your marketing message.

The top of mind awareness your marketing builds over time is of paramount importance to your most valuable asset – your brand.

 
 
 

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