Marketing Budget Models For Your Healthcare Practice

Feb 10 | , , , ,


By Carol A. Wilcox

PREFERRED Therapy Providers Inc.

Looking for help with developing a marketing budget for your practice? Unsure which budget model makes sense for you to use? This article explains two kinds of common marketing budget methods and the types of marketing items to put in your budget.

There are numerous ways to structure a marketing budget and you should always consult with your accountant to determine the right approach for your practice. As your practice grows, you will need to make adjustments.


How much you decide to spend on a budget depends on your goals and expected revenue. But it’s important to understand that a marketing budget is a serious financial commitment that you make for the success of your business. If you can’t make the commitment, you risk spending your hard-earned dollars on sporadic marketing campaigns that can undermine your ROI.


Many small and medium sized healthcare practices assume that marketing expenses should be categorized as a cost center. But if you think about it, cost centers cover the expenses necessary to operate your business. Marketing for the most part, is focused on generating sources of revenue, so you should consider categorizing your marketing expenses as a revenue center.

We’ll go over a couple of methods used to establish a marketing budget. But again, this will ultimately be a decision you and your accountant will need to make.


This is not an all-inclusive list, but the following are the more common marketing budget item types:

Advertising – Social media, print advertising, broadcast media, digital advertising, direct mail marketing

Marketing collateral – Brochures, flyers, rack cards, promotional products

Production & Creative – Graphic design, photography, video production, other creative

Technology – Domain name and registration, website hosting, website maintenance and security, SEO

Content marketing – Blog posts, landing pages, email marketing, downloads, e-books, whitepapers

Events – Costs associated with any events you may sponsor, exhibit at or host


Every business is different, but a general rule of thumb for healthcare practices is to budget between 5 and 10 percent of total revenue toward marketing. This may fluctuate from year to year depending upon other financial factors in the business and the type of marketing the business conducts.


1.) Traditional Budget – with this method, you set aside a certain percentage of your total revenue for marketing. Take the amount you estimate that you will make in revenue for the year and then multiply that number by a percentage to reach your marketing budget. On average, healthcare practices allocate between 5 and 10 percent of total revenue. This is not a hard and fast rule; your allotted percentage will depend upon a variety of factors.

2.) Goal-based Budget – this is a more complicated but arguably a more effective way to set a marketing budget for your practice. This will require that you define your long-term goals and unpack them into short-term goals. The budget is then based on the expected outcome of those goals.

So if, for example, your goal was to increase profits by $25,000 this year, you would need to determine how many new patients you would need to attract by the end of this year to successfully increase profits. How much and what types of marketing would it take to achieve that goal?

One way to determine this is to follow your competition to see how they structure their marketing around their goals.


These are just two examples of common marketing budget methods. Whatever method you choose, take into consideration the following factors that will influence how much you spend:

  • The size and age of your practice
  • Your practice specialty
  • Your marketing goals
  • Your competitors and what they spend on marketing
  • Your target market


About the Author:

Carol A. Wilcox is the staff writer and head of marketing communications at PREFERRED Therapy Providers, Inc. You can reach Carol here.

This article is brought to you by PREFERRED Therapy Providers Inc. PREFERRED is the nation’s leading payor management services network. Our expertise is working with physical, occupational and speech therapy practices – from single clinics to multiple clinic locations.