Face screaming in fear emoji Patients freaking out over high copays and deductibles? Learn how to handle 'em in our March webinar. Register now.


January is synonymous with resolutions, and now that direct access is a reality in all 50 states, many rehab therapy practices are resolving to better market to consumers. But marketing costs money, and nothing dashes dreams like a budget. As Marketing pioneer John Wanamaker said, “Half the money I spend on advertising is wasted; the trouble is, I don't know which half.” Fortunately, you can avoid that trap and make your 2015 marketing dreams come true. After all, a solid marketing budget should drive growth, with every dollar you spend pushing at least another dollar back into your business.

Here are my three simple steps for creating a smart marketing budget:

1. Define your goals.

First, think about how you want your marketing dollars to benefit your business over the course of 2015. Every good budget should function with the purpose of achieving a specific, measurable, desired outcome—emphasis on specific and measurable.

Why High-Level Goals Don’t Work

Let’s say your goal is to increase the number of new patients seen in your PT clinic this year. That sounds like a good goal, right? Not so fast—this type of goal is too vague. There’s nothing concrete, measurable, or actionable about it, and there’s no clear start or end point. Setting a vague goal is a guaranteed way to waste your hard-earned cash.

Why You Should Set Detailed and Measurable Goals

There’s a better way to set goals. In The 4 Disciplines of Execution, author Franklin Covey proposes a simple but valuable goal-setting format:  “from X to Y, by date.” Using this format will help you define daily tasks, establish a trend line to guide reactions, and express goals in an understandable way.

So, let’s reexamine your goal of getting more new patients in your clinic: You had 300 new patients last year, which averages out to 25 new patients per month. In 2015, you want to grow your new patient numbers by 60%. That puts your new patient goal at 480 for the year. So, your smart goal will be to increase the average number of new patients per month from 25 to 40 by December 31, 2015. Now, your clinic can take action and hold itself accountable.

If you set your goals to be quantifiable and actionable—and you impose a defined deadline—your clinic’s success will be clear and measurable.

2. Use key metrics.

Now that you have your goal in place, it’s time to introduce some metrics into the equation. You need to understand exactly how many dollars you’re willing to spend to achieve your goals.

Why You Shouldn’t Skimp on Asking Questions

The right numbers aren’t going to walk up and knock on your clinic’s doors. You’ll need to take the initiative to gather some figures so you can apply metrics to your goal—even if those figures are just estimates. To get down to the dollars and cents, you’ve got to ask the right questions.

Let’s stick with the example goal from the section above; here are some questions to ask yourself:

  • How much money does the average new patient bring to my clinic?
  • What percentage of that potential new patient revenue am I willing to spend to get that patient through the door?

Every clinic will have its own unique threshold, but the point is to be in the black (i.e., profitable).

Why You Should Know Your Numbers

To come up with a growth formula, you’ll need to define a couple of key metrics:

  • What is the lifetime value (LTV) of a patient? The LTV is how much revenue a new patient will generate for your clinic over the course of that patient’s lifetime, or over the course of his or her time as a patient at your clinic. In our research, we’ve found that new patients are generally worth about $1,000 in revenue.
  • What are your margins on that $1,000? What percentage of that revenue is profit?

The relationship between these two metrics is extremely powerful. If you know how much each patient is worth—along with the profit you’re able to make—you can shift your marketing tactics to stay in control of your budget.

Let’s try another example: You’re the owner of XYZ clinic, and you have a patient LTV of $1,150. After staffing and overhead expenses, the clinic operates at a profit margin of 12%. That means that you have $138 to work with per patient. Now, you certainly don’t want to spend all of your profit on marketing, but now you have some data you can use to set the next most important metric in your marketing budget—your customer acquisition cost (CAC), which is the total amount of money you’ll spend on sales and marketing to acquire a new patient.

Having control of your CAC will ensure you never spend your marketing dollars on tactics that result in money loss. No matter how you deploy your marketing budget, the numbers will always work if you keep your customer acquisition cost in line. So, find a percentage of per-patient profit that you are comfortable dedicating to CAC and set it. You can always adjust this number, so don’t dwell on getting it correct right out of the gate.

3. Finalize the budget.

You’ve set a measurable goal, and you know the numbers. Now, it’s time to nail down that money-making marketing budget.

Why You Shouldn’t be too Hard on Yourself

It’s inevitable: You have to finalize your budget, which will help you gauge progress toward your clinic’s goal. But after you set that budget, remember to stay flexible. Give yourself the freedom to react and adjust instead of beating yourself up over a few missed opportunities.

Why You Should Calculate Your Success

You’ve worked hard to sort out the numbers to create your marketing budget. The final step in the process is solving a simple math problem.

In the above example, clinic XYZ decided to dedicate 25% of its profit to CAC. That means you’re willing to spend $34.50 to get a new patient. Now you can predict how much money you should spend on a monthly basis to hit your goal of 40 new patients per month. Simply multiply the dollar amount you’re willing to spend by your goal number ($34.50 x 40) to get a growth-focused budget estimate. In clinic XYZ’s case, you have a marketing budget of $1,380 month, or $16,560 year. If LTV remains constant, you’ll spend $1,380 per month to make $46,000 of new patient revenue over the lifetime of the patient. This comes out to $5,520 of net profit—not bad at all. Remember, numbers talk, and it’s important to see your success on paper as it provides further motivation to stay on target.

Depending on your numbers, completing the process we’ve outlined in this blog post should take about an hour. If you don’t have exact data you need, go ahead and estimate. Your budget should function as a set guidelines—not an inflexible doctrine—so it’s totally fine to use estimates to establish your initial budget. Think of budgeting as a continuous process that you’re constantly optimizing. If you set smart goals and pay attention to your metrics, you’ll always know whether your marketing budget is working in your clinic’s favor—not the way around. Happy budgeting!

The PT’s Guide to Software Implementation and Training - Regular BannerThe PT’s Guide to Software Implementation and Training - Small Banner
  • Measuring Matters: Key Metrics for Marketing and Sales for Physical Therapy Practices Image

    articleMay 21, 2014 | 8 min. read

    Measuring Matters: Key Metrics for Marketing and Sales for Physical Therapy Practices

    You might be one heck of a salesperson, or you might be a master marketer. But how do you know that? A gut feeling, perhaps? Sales or marketing skills only matter to a business if that business understands the value those skills provide. More succinctly, sales or marketing only matter if they work, and the only way you’ll know if they’re working is if you measure them. With that, here are a few key metrics that’ll help …

  • How to Throw a Grand Opening Bash Image

    articleMay 1, 2014 | 5 min. read

    How to Throw a Grand Opening Bash

    You’ve spent months preparing to open your own practice, and it’s finally time! Your doors are open for business and your staff is ready to treat patients, but does your community even know your practice is open? Working with fellow business owners and residents to put together a grand opening event is a wonderful way to network with your neighbors (and potential customers) with the end result being a fun community event that exposes the public to …

  • The Essential Guide to NPS for Private Practice PTs, OTs, and SLPs Image

    articleOct 8, 2015 | 6 min. read

    The Essential Guide to NPS for Private Practice PTs, OTs, and SLPs

    Dale Carnegie said, “To be interesting, be interested.” This wisdom is the foundation of the net promoter score® (NPS). In the simplest of terms, NPS is a standardized customer loyalty metric. It rates how likely a customer is to recommend your brand, product, and/or service to a colleague or friend. NPS is a solid indicator of customer (i.e., patient) engagement and retention , because people typically only recommend brands, products, or services they feel are truly deserving …

  • Year of the Monkey? More Like Year of Metrics Image

    articleJan 7, 2016 | 7 min. read

    Year of the Monkey? More Like Year of Metrics

    Welcome to 2016! As we kick off another year of informative blog content, the Chinese zodiac calendar also resets—and 2016 is the Year of the Monkey. Those born in monkey years—including yours truly—are said to possess such character traits as cleverness and curiosity. We monkeys are playful, and we thrive on challenge. The monkey is just one of 12 Chinese zodiac signs, though, and each sign has its own characteristics. (You want to research your sign now, …

  • How To Start An Outpatient Private Practice For Less Than $8,000 Image

    articleMar 22, 2012 | 5 min. read

    How To Start An Outpatient Private Practice For Less Than $8,000

    Our contributing blogger today is WebPT Member, Jack Sparacio, MSPT, COMT, CFMT . He is also the Owner and President of  Sparacio Physical Therapy P.C. in New York. We're excited to have Jack sharing his expertise. Thanks Jack! I know what you’re thinking. There is no way you can open an outpatient private practice for less than $8, 000. But the truth is, you can.  There are plenty of articles out there that will tell you that opening …

  • Popping the Question: Patient Engagement and Why It Matters Image

    articleOct 6, 2015 | 3 min. read

    Popping the Question: Patient Engagement and Why It Matters

    As a physical therapist, you love your patients—but what are you doing to prove it? It’s great that your services help patients get back on their feet, but outcomes alone won’t build your relationship—or your revenue stream. It’s time to take this to the next level: patient engagement. While it doesn’t require you to buy jewelry or rest on bended knee, like a good proposal, patient engagement should be thoughtful and sincere. What? Not sure what I …

  • 8 Reasons You Should Attend Ascend 2016 Image

    articleMay 3, 2016 | 5 min. read

    8 Reasons You Should Attend Ascend 2016

    Great news! Ascend— the ultimate business summit for rehab therapists —is back. Last year, the second annual event hit Chicago for two incredibly educational (and incredibly fun) days. This year, Ascend is returning to Texas, which was home to 2014’s inaugural event. As we all know, everything's bigger in Texas, and Ascend is no exception. This two-day conference is a can’t-miss affair. Here’s why: 1.) You’ll earn CEUs. In addition to upping their business acumen, physical and …

  • Live from the Direct Access Front Lines: The Story of Your Front Office Image

    articleOct 16, 2014 | 6 min. read

    Live from the Direct Access Front Lines: The Story of Your Front Office

    A self-referred patient walks into a PT clinic. Is this the start of a joke or a story with a happy ending? Well, that’s up to you. Your direct access marketing efforts will inspire patients to pick up the phone and dial your clinic. But then what? Your front office team is your direct access front line, and if they’re not prepared to interact with self-referred patients (i.e., those with no referral from another healthcare provider), then …

  • Mastering the Metrics for an Exit Image

    articleAug 18, 2014 | 4 min. read

    Mastering the Metrics for an Exit

    A checklist for what matters most to potential buyers of your therapy practice The physical therapy and rehabilitation care industry market is large and growing. Merger and acquisition activity continues to be on the radar for many of our nation's largest rehab therapy providers with six of the ten largest players now owned by private equity firms. There are several reasons for this industry phenomenon, which has driven multiples to a 20-year high and has attracted both …

Achieve greatness in practice with the ultimate EMR for PTs, OTs, and SLPs.