I’ve got two questions for you: How big is your marketing budget, and how did you decide how much to spend on marketing?
For many private PT practices, what they’re investing in marketing doesn’t match up with what they should be spending. And the truth is, figuring out that perfect number is complicated. There isn't an end-all solution that makes sense for every practice.
However, a recent Ibis report showed something alarming about how a typical PT budget stacks up, especially when you compare the marketing allocation to other categories.
Here’s a closer look at how you can put a value on your marketing to better reflect the needs and goals of your private practice.
The Ibis report, which takes into account the PT industry as a whole and not just private practices, shows that just 1.2% of the budget goes to marketing. For most PT practices, this makes a lot of sense.
In hospital-owned (HOPTs) or physician-owned (POPTs) physical therapy practices, patients largely come through referrals. These practices don’t necessarily need a large budget as new patient flow is built into their business models. Even a POPT practice with $100K in monthly revenue can survive with a zero-dollar marketing budget if its referral system is fully effective.
But what about private practices, particularly those that are taking advantage of direct access marketing? You look at industry benchmarks (like the Ibis report), see generalizations regarding budgets, and immediately panic that you’re overspending on marketing.
That’s what we’re trained to do—look at the numbers from a reputable data supplier and try to make logical conclusions. But it’s even more important to put these numbers into context, especially when you’re looking at figures for an entire industry and not just your slice of it.
There’s another problem that makes finding a marketing value difficult. The way most private practice owners perceive their value in the marketplace doesn’t reflect reality. But then, we look at information like the Ibis report and use it to justify starving the marketing vein.
The Ibis report also revealed that 19% of a PT practice’s budget goes to an “Other” category, which largely includes debt and depreciation. That’s nearly a fifth of your revenue going to debt and devaluation of the practice, but only 1.2% of revenue going to efforts to bring in more money to combat debt and devaluation.
It just doesn’t add up.
As for what percentage of your revenue your marketing deserves, there’s not a single-best figure here—all practices and markets are different. You can’t walk up to a heat stove and ask for heat before you put in the wood. You should be willing to fire some bullets and adjust your spend based on the results you get.
But because private practices enjoy the added benefit of tapping into a direct access network, you’ll need to invest something into your marketing if you want it to work for you. Ideally, as marketing spend goes up, that pesky little “Other” column will go down as you continue to build value into your practice.
Want to learn more about leveling up your direct access marketing? Watch our free 10-minute demo video to see how we can triple your patient flow in 12 months!