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In times of economic uncertainty, inflation, recession, and world unrest, dental offices, from general dentistry to orthodontics to specialty, will face unique challenges of where to plant their flag and maintain patient acquisition and retention. One of the critical areas affected is marketing budgets. The natural inclination is to cut costs, including reducing marketing budgets. However, a strategic approach is crucial to weather the storm and emerge more robust when the economic landscape improves.
In this article, we’ll explore the realities of a down economy on patient consults/appointments, discuss the best marketing tactics for attracting new patients, how to collaborate with marketing vendors during a recession, and avoid mistakes that can exacerbate economic difficulties.
Reality:
Companies, including dental practices, whether solo offices or groups, will be forced to be smarter about how they spend their money.
When the economy is healthy, dental practices can avoid spending money on billboards and a high rotation of TV commercials.
But as the economy melts, some companies, from small to large, will fold because they are overleveraged, and the ones that hang on will have their marketing budgets cut back. The same is true in the dental industry. That means you will have to make $1 work like $5, retain team members who truly understand the concept of ROI, and work exclusively with vendors who can move the needle.
Sales will be tougher to come by. Cash flow issues may arise. Employee morale can go down.
When the average consumer worries about how to pay their mortgage and/or put food on the table, sales of other items and services will decrease.
You know how many people buy cars in a recession? Fewer people.
You know how many people go out to eat? Fewer people.
Do you know how many make it to every dental appointment? Fewer people. Consumers who have lost their job or insurance don’t always schedule their next 6-month checkup or skip their appointments to save money.
It’s just the truth.
In the last recession, some patients skipped or were and no-shows to their appointments. Instead of two checkups a year, they would make it to one or none.
People with a neglected mouth neglected it for a few more years. Getting patients on the schedule and confirming becomes more important and, by default, more challenging.
You need the stomach to get through the “dark” times in business, and many marketers and vendors simply don’t know how to do it. It is not about slashing all budgets. It is not about delaying vendors for months, hoping they do not turn off services. It is not about hoping marketing will grow new patients by 20%. It is about being strategic, mining insights from data, executing good ideas, working with the right partners, and adapting strategies to generate a positive return.
1. Assessing the Situation:
Before deciding on which marketing tactics to potentially cut, dental offices must conduct a comprehensive assessment of their current situation. Analyzing accurate business impact metrics, monthly spending, ROI, and what your competition is doing, provides valuable insights.
Laying out a spreadsheet with marketing tactics expenses by month with marketing spend, patients/appointments generated, and revenue generated, will be a very valuable start (you can use average revenue per patient if needed). Doing a quick Return on Advertising Spend (ROAS), which is revenue generated by tactic divided by expense per tactic, will give you a ratio for every dollar you spend and how much you make in revenue. Said another way, you get X dollars in return for each dollar you spend.
In a perfect world, you would see the ratio grow from 3 to 1 to 7 to 1, but in a down economy, you are likely to see ratios go from 5 to 1 to 3 to 1. The key is to look for the marketing vehicles that give you the worst return and flag them for cuts. Then, identify which marketing tactics are getting you a good return.
Some offices want to subtract operating expenses (i.e., supplies, compensation, etc.) from the marketing revenue to get a better gauge of ROI; if you do this, do it for total marketing revenue vs individual tactics. Let the data guide your decisions.
2. Optimizing Marketing Tactics to Grow Same-Store Sales
Now that you have the losers flagged focus on the tactics that seem to work for you and can grow same-store sales. The goal is to optimize and/or be more innovative with your marketing spend on each tactic.
Likely, your top performing tactics are:
- Digital Presence: In the age of technology, establishing a robust online presence is paramount. Invest in a user-friendly, informative website and leverage social media platforms to engage with potential patients. Content marketing, including blog posts and informative videos, can help position your dental office as an authority in the field and be done cost-effectively.
Artificial Intelligence (AI) is here to stay; leverage it, whether using it to write cheap blogs for your website/social media or working with vendors that leverage AI in the service they provide for your office. For example, AI software can listen to all calls and “bucket” the purpose of the call by disposition code and identify areas of improvement. AI is not perfect, so be sure to proof it and/or be hands-on with it.
If you are trying to target Gen Z, realize digital presence is different.
Gen Z uses TikTok for search, much like prior generations used Google. You do not need to go viral on TikTok, but some presence will matter for Gen Z.
Work with good digital partners. For example, when looking to be smarter about your digital spending in more challenging economic times, good digital marketing vendors assess the landscape based on your audience and budget and then provide you with a strategic plan to hit that demographic. This is where they should make custom recommendations like Google Ads for direct action mid-lower funnel leads while getting you “cheaper” brand awareness in your community with social media. You should be able to do quick math based on cost per lead and cost per new patient to see what an increase in spend should generate for your practice.
The point is, a good vendor understands times are tough for you and them and is going to maximize your marketing budget while getting results – I’ll take a vendor who customizes and actively manages my account to stretch my $1 to $5 vs. a vendor that sets up programmatic buys (autopilot) and talks a good game while collecting a management fee.
- Local SEO Strategies and Targeted Paid Search: Focus on local search engine optimization (SEO) and paid search to ensure your dental office appears prominently in local search results. This involves optimizing your website, managing online reviews, and ensuring accurate information on online directories.
I see a lot of dental offices get ripped off on SEO (and paid search). You don’t need to be an expert in the area, but you should work with a vendor who truly understands what they are doing.
How do you find a reliable and trustworthy vendor? Start with references from people you trust and people like myself who have done it before and weeded out bad vendors over the years.
The key is trust; a lot of times, people we know in business only tout how great everything is, but in reality, the office is not doing so well – it is equivalent of “Facebook Life” where we see people post their best life on social media – their vacations, new cars, fancy dinners, etc but in reality they have no money in savings. You need vendors that can truly move the needle, not vendors that will always paint the best life picture.
- Website: Do NOT neglect your website. It needs maintenance and ongoing updates; patients and potential patients visit your website to check you out before booking an appointment; research clarifies that.
- Content is Still Important in a Down Economy. Content marketing, including blog posts and informative videos, can help position your dental office as an authority in the field and be done more cost-effectively. Showing competence and information about dental services builds your brand and connects with your audience faster.
How can you create content more cost-effectively? Leverage AI to write blogs; instead of doing video shoots every month, do them once a quarter with your video vendor – time is money in video shoots, so plan out the whole day to get as much content (videos & photos) in 1 day, for social media sites leverage your iPhone and make it look slick with an affordable service like Canva for under $200 a year – consumers love to see social proof like patients stories, testimonials, behind-the-scenes look at your practice, FAQs and Q&A sessions, how you support community, dental health challenges, etc. For example, challenge people to floss daily for a week and share pictures on social media. Offer a small prize or discount to the people who post.
On social media, you can get a lot of traction in your local community with a small boosting budget; this way you grow fans and get more than two people liking your post.
Combine the content with strategic use of a couple hundred dollar boosting budget.
- Promote Flexible Payment Plans: Offer flexible payment plans or financing options to make dental care more accessible during financially challenging times.
- Introduce Recession Discounts: Introduce “recession-specific discounts” or promotions to incentivize patients to maintain dental care despite economic constraints. For example, a discounted preventive care package includes essential services to encourage regular checkups and promote proactive oral health, plus extreme perks.
- Advertise Community Support: Times are tough. Let your community know you are helping and promote it on social media. Engage in community-specific campaigns like discounted checkups for the recently laid-off or partnering with other local businesses to create value for those who cannot afford the full price and need a little help getting the care they still need; this will show you are there for your community.
- Targeted Advertising: Instead of adopting a broad marketing approach, concentrate on targeted advertising to reach potential patients more efficiently. Platforms like Google Ads and social media allow precise targeting based on demographics, location, and interests. Typically, a general practice office wants to cover roughly a 10-20-mile radius from the office; if you are on the specialty side, you could be covering a 50+ mile radius.
Dig into your digital data to see the effectiveness of your digital buys. Cost per lead is a quick read, but also look at the cost per the schedule and cost per show. Yes, some of these metrics touch on operations, but good marketing only does great when there is healthy teamwork with operations. If your average cost per schedule is $50 and you spend an extra $1,000 per month, then rough math says you should have 20 more shown. So dig into the data and see if you are close to that math or off; if you are off, you have to look at things like the effectiveness of digital and/or timing of responding to leads, the person interacting with leads, etc.
A good digital marketing partner will work on the digital strategy with you and be upfront about what can and cannot be done within the budget. They will get into things like the distance they can target based on the geographic region(s) your office(s) are located. The higher the population, competition, and growth plan, the more money it will take to expand out of the immediate area. Markets, such as Los Angeles and Chicago, are very saturated. These are more expensive markets, and you will need to be aggressive in your approach to compete – a tougher balance in a down economy. Vendors who are upfront about this give you the insights you need to make decisions.
A buzz term like “demographic targeting” is easy to throw out, but you need a vendor who will look at your specific situation. It will depend on the age range that your dental office and campaigns need to target. For example, suppose you are a local general practice dentist trying to attract young patients and turn them into long-term patients. In that case, a tight 10-mile radius on social media with some Google local campaigns may make the most sense. If you sell high-end services, you will want to target 35-65-year-olds, those interested in self-improvement or cosmetic dentistry, and a mile radius much bigger than a general dentistry office.
A good vendor understands the difference between the two goals of the respective office and how the consumer is different for those two types of offices.
- Implement Loyalty and Referral Programs: Encourage existing patients to refer friends and family through referral programs – small incentives work. Develop relationships with other dental offices in your area to develop referrals, and define the program for your office in a “user manual.” It is a very cost-effective tactic and one of the most underrated.
- Diversify Services and Educational Content: If your office can expand the range of services your practice offers, promote it. This may involve adding cosmetic dentistry, orthodontics, or other specialized services that could attract a broader patient base. And continue to share informative content about all things related to your practice, like oral health, preventive care, and common dental issues. It also includes tips for maintaining good oral hygiene, the importance of regular checkups, and information about various dental procedures.
As much as you can be more efficient at generating leads for appointments, no lead must go to waste in a down economy. Address the “other side of marketing” – office team answering phones and following up with online form fills/leads. Having a team well trained to ensure no phone goes unanswered, offering two appointment days and times, answering form fills in 3 minutes or less or even better via text, screening out red flags, etc, is crucial to seeing a successful ROI on your marketing spend in lean times.
3. Collaborating with Marketing Vendors in a Down Economy
There are good vendors, and there are bad vendors; there are good practices, and there are bad practices.
What makes a good vendor is that they are the ones who genuinely work with you in a partner-like manner, have your business’s best interest as the focus, and can put points on the board. They understand their economic situation and want to survive and grow as much as you do. Bad vendors, we have all had our run-ins over the years. They are the ones who can never truly prove the impact to your business, insist every other vendor you used before is bad, are in it for themselves, and/or are very arrogant about their greatness – now is the time to get rid of them.
While practices face numerous challenges during a down economy, inevitable mistakes can exacerbate these difficulties. One of the most significant mistakes practices make is not communicating with their vendors during a cash flow crunch.
In these times, cash flow becomes even more critical. I’ve seen businesses go “silent” on their vendors, which can be the kiss of death.
Vendors get frustrated, do not like being ignored, and turn off services if they are unanswered. When services are turned off, you have a disruption in your office and a poor patient experience, team members get nervous and start looking for new jobs, and vendors you rely on now have broken trust. It all can be avoided with some level of transparency.
As important as monitoring cash inflows and outflows is important, returning to your vendors and giving them an update on your situation can go a long way. A lot of times, vendors are willing to:
- Renegotiate terms and review contracts
- Be flexible on payment plans and terms
- May be willing to adapt the agreement to support the current status of business
Vendors are businesses, too, and want to survive the economic conditions while keeping employee morale high; more times than not, they want to find a solution that works for their business as much as you want a solution that works for your practice – it’s better to work together.
4. The Importance of Metrics and ROI
a. Track Key Performance Indicators (KPIs): Establish and track key metrics such as website leads, conversion rates, appointments scheduled, appointments shown, and patient acquisition cost. If you use a call center, focus on the metrics impacting your business. Metrics include answer rate, average handle time, number of consults/appointments, etc. Regularly monitoring these metrics on a weekly and monthly basis provides insights into the effectiveness of your marketing strategies.
b. Proving ROI: Demonstrating a positive ROI is crucial for justifying marketing expenditures. The math here is pretty simple….was a consult/appointment booked? Did they show the average revenue generated…subtract expenses to get your ROI.
Digitally, you should be able to track these items. Things like TV commercials can be validated with a tracking phone number, but you also need to look and see if web traffic goes up when TV runs.
You can even put tracking numbers and QR codes in your print materials – the key is tracking results.
Make your life easier and utilize tools such as Google Analytics, your CRM like Go High Level or SalesForce, and patient surveys to gather data that supports the impact of your marketing efforts on the growth of your dental practice. If your office works off of spreadsheets, ensure updating them is part of every interaction process.
c. Net Growth of Patients: Dental offices often prioritize strategies to attract new patients. When you look at your data, you’ll see there are two buckets of patients you need to focus efforts on. While attracting fresh faces is undoubtedly important, the key to sustained success lies in retaining existing patients and achieving net patient growth.
Data is one of the most powerful tools at a dental office’s disposal for patient retention. Dental offices can gain valuable insights into patient behavior, preferences, and trends by leveraging patient data. For example, identifying patients who have been inactive for an extended period, such as those reaching the 18-month mark without an appointment, can be a crucial metric. It is easier to keep a patient vs. getting a new one; look at your data – you’ll see the opportunity.
Effectively managing a marketing budget in a down economy requires strategic planning, willingness to adapt, collaboration with reliable vendors, avoiding inadequate cost-cutting strategies, and a commitment to measurable outcomes. Dental offices can successfully navigate economic downturns by adopting targeted marketing tactics, negotiating with vendors, and prioritizing transparent communication while attracting and retaining new patients.
Written by Ryan Torresan. Ryan Torresan, Chief Marketing Officer at Peak Dental Services, is considered one of the leading marketing minds in dental and healthcare on what’s next in marketing, relevance, marketing that impacts Dental Support Organizations (DSOs) and can be measured. With more than 12 years of DSO experience, Ryan is a marketing executive who reached the executive level at three of the largest dental support organizations (DSOs) in the US. During his tenures, he earned promotions and awards after tremendous success in the digital marketing and social media space. He is also known to have transformed event, CRM and content marketing into lead generation. He has repositioned brands, navigated crisis public relations and driven incremental sales through office designs and retail products. He played a crucial role on executive teams that sold DSOs to private equity firms. Email Ryan at ryantorresan@gmail.com
