How much of a financial investment in marketing makes sense for your practice? While there’s no universal agreement on how to budget for marketing, Consultant Stanley R. Joesph, explains three of the most common strategies:

1. Sales Percentage.
This method bases your marketing budget on a percentage of last year’s profits or next year’s profits (or a combination of the two). While this is fairly reliable, it violates a major marketing rule – you don’t necessarily want to spend more on marketing when profits are up and less when profits are down. Calculating your budget this way disregards the business environment that’s causing the fluctuations.
2. Competitive parity.
This method involves determining which advertising vehicles and strategies are being used by the practices that dominate your marketplace. Your budget is then determined in relation to the competition. The danger in this strategy is that it assumes the competitor’s marketing strategy is effective and increasing profits.
3. Objective-driven.
A strategically planned and bugeted marketing campaign is only as good as the objectives it meets. For instance, if you want to boost awareness 15%, you must determine how much media exposure is needed to achieve this objective. This method requires the most work, but it achieves the most focused results.