How to set a dental practice marketing budget
A method for setting a marketing budget from your own capacity and treatment margins, rather than from a percentage rule: what a started patient is worth, what you can afford to pay for one, and how to test it.
Why not a percentage of revenue?
Budget rules of the "spend X% of revenue" kind ignore the two things that decide whether marketing pays: whether you have room for more patients, and what each new patient leaves after the cost of treating them. A practice with a full diary and one with empty chairs should not budget the same way. The method below starts from your own numbers instead.
Step 1: capacity
Count how many new patients for the target treatment you could actually start each month: free clinician time, surgery availability, and team capacity to answer and follow up enquiries. If the answer is close to zero, the budget question is premature.
Step 2: what a started patient is worth
Take average treatment revenue for the treatment you are promoting, and subtract delivery costs: laboratory fees, materials, associate pay and other direct costs. The result is contribution per started patient. Use your own accounts; a national figure tells you nothing about your margins.
Step 3: what you can afford per patient
Decide what share of that contribution you are willing to spend to win the patient. That is a business decision, not a formula: it depends on how much of the rest you need, and on whether new patients tend to return for further treatment. The result is your maximum cost per started patient, including fees, ad spend and any VAT you cannot reclaim.
Step 4: the monthly budget
Monthly budget = maximum cost per started patient x the number of starts you can take. That is the most you should spend if every pound performs at your limit. Begin below it.
A worked example
These are round illustrative figures, not benchmarks. Replace them with your own.
| Line | Calculation | Result |
|---|---|---|
| Spare capacity | Starts you could take each month | 10 |
| Revenue per started patient | From your accounts | £3,000 |
| Contribution per started patient | £3,000 x (1 - 40%) | £1,800 |
| Maximum cost per started patient | £1,800 x 30% | £540 |
| Maximum monthly budget | £540 x 10 | £5,400 |
In this example, spending £5,400 a month only makes sense if it produces close to 10 started patients. If it produces five, the real cost per patient is double the limit. That is why the next step matters more than the first number you choose.
Step 5: test, then adjust
- Start well below the maximum, for at least three months, so you have enough enquiries to judge.
- Record every enquiry and follow it through to started treatment.
- Each quarter, compare actual cost per started patient with your maximum, using the acquisition cost calculator.
- Increase spend only while cost per started patient stays under the limit and capacity remains.
If cost per patient is too high, look at the stages before spending more: enquiries not answered, consultations not booked, plans not accepted. The fee and spend split is covered in agency retainers versus ad spend.