Whether an orthopedic practice has been using digital and traditional marketing efforts for several years, or is in the early stages of planning a marketing strategy, one common hurdle is deciding what the marketing budget should be. Many practices are concerned about spending too much and not being able to see the ROI from these efforts. Other practices have engaged internal teams or external agencies for their marketing efforts but have been frustrated by the lack of meaningful data to support marketing efforts.
Marketing your practice is a financial commitment that requires trust and a willingness to understand that your practice may not survive without it. If your practice is only looking to spend a few hundred dollars per month, the results will reflect that. If the practice is spending several thousand dollars, the ROI should be meaningful and easily understood.
Another key factor is having the right expectations for different marketing avenues. For instance, understanding which efforts are immediately transactional and which are intended to raise brand awareness. To gauge the proper expectations, it is important to understand the orthopedic patient decision making process and which avenues help guide those decisions and therefore how much budget to allocate toward them.
So how do you determine how much to spend? Practices should be determining their budgets based on a variety of factors. In our experience, a baseline of 2% – 5% of revenue (based on practice size) is a good starting point to determine a budget. But, these percentages can vary based on many of the factors below.
Below are 4 important factors that can help determine your marketing budget.
1. Reallocation of Current Budgets
Many practices have traditionally relied on print, billboards and other traditional advertising efforts to generate brand awareness in their communities. And while these efforts can be effective, practices have to acknowledge the shift in patient behavior to more online resources and position their practice to be there when potential patients are searching online for orthopedic services in their area.
Two of the most important marketing resources that practices should be allocating marketing spend for is Google Pay Per Click Advertising and Social Media Marketing. As the patient decision-making cycle shifts into more internet based research, both of these platforms result in a far more tangible ROI than traditional and print advertising. However, it is important to ensure that these efforts are executed properly and utilize the expertise of an experienced digital marketer. Otherwise, these efforts can generate very low ROI.
Therefore, if your practice is spending the majority of the marketing budget in traditional advertising or community sponsorships, it may be worthwhile to examine the ROI on these strategies and discuss whether or not they be best reallocated to a more digitally focused strategy. This is not to say that print and traditional media have no place, but rather how much of the overall budget should be allocated to them.
2. Competitor Analysis
Every orthopedic practice has competition and whether your practice is gaining or losing market share to your competitors is a function of marketing. When determining where your marketing efforts should focus look to see what your competitors are doing and how you can do it better.
In many cases, private orthopedic practices cannot outspend health systems or larger competitors. So, just because you see your competitors on billboards it does not mean you should buy the billboard across the street. If you see your competitors doing TV commercials it doesn’t mean that you need to immediately do the same.
However, that in no way means your practice should throw in the towel. What it does mean is that your practice has to spend smarter and be more nimble than your competitors. Investing in digital marketing strategies that are focused on brand awareness (Google Display Ads, Social Media Ads and YouTube Pre-Roll ads) is often a cost effective method to compete with larger practices or health systems.
3. Practice Size
The number of physicians and specialties in your practice has a direct correlation to what your budget should be. Multidisciplinary practices should keep in mind that marketing each of their specialties is important and each should be represented so that potential patients are aware of all services provided. Therefore, larger practices require a larger marketing budget.
Many practices make the mistake of segmenting their practice and only positioning themselves as experts in joint replacement specialists, spine or Sports Medicine and do not focus on the other specialties. The mistake in this approach is that patients only know of the services you are promoting. So, if your marketing is focusing only on joint replacement procedures, patients will not think to see you for a shoulder injury.
The key to representing all specialties is identifying the common patient demographics within that specialty and targeting your digital or traditional marketing to reach that demographic. Another useful tool to find marketing opportunities is to use your EMR system to review your patient demographic information over a 6-12 month period. If the data shows a significant gap in patients 38-45 years old or 58-65 years old, it would be worthwhile for the practice to explore the service lines and marketing initiatives that best suit that demographic.
4. Tracking ROI
In orthopedics, tracking ROI is a bit more complex than any other field due to the fact that full payment is not always made on the date of service by the patient and insurer. In some cases, practices will have to wait several months to collect reimbursements from insurers.
Yet, there is a way to track the ROI of your marketing efforts by tracking new patient acquisitions as well as billed charges. These tracking tools use a HIPAA compliant system that implement unique phone numbers to track new patient acquisitions by keyword, platform, website pages and cost. This data should be explored month over month to see which initiatives are driving new patient volume and which are exhausting the budget with minimal return.
Physician Leadership is often frustrated by the intangible marketing metrics such as clicks and impressions and simply want to drill down on new patient volume and revenue. This is why having these patient tracking tools is important to ensure that Physician Leadership understands the true value of marketing and do not abandon the efforts before they have a chance to become profitable. The data that should be reported to leadership should discuss things like new patient volume month over month and the cost per acquisition per new patient. This should then be examined quarterly and yearly against the billed charges from these patients to get a true sense of ROI.
About the Author
Daniel Goldberg is the CEO of Gold Medical Marketing, a firm that specializes solely in orthopedic, spine and neurosurgery practice marketing.
Daniel has lectured on Direct to Patient Marketing at some of the most esteemed orthopedic and spine conferences including, AAOE 2015, 2016, 2017 and 2018 as well as Becker’s Annual Spine, Orthopedic and Pain Conference (2012, 2013, 2014, 2015 and 2016). His demographic targeted approach to Orthopaedic Marketing has also been featured in AAOE, Becker’s Healthcare Review, Orthopreneur, and Healthcare Finance News.
Orthopedic and Spine Practices across the country and utilize Gold Medical Marketing’s services for the most advanced Direct to Patient Marketing Strategies to increase patient volume.