Accounting

How to Set a Marketing Budget for Your Therapy Practice

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July 27, 2022
Bryce Warnes
Content Writer
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The marketing budget for your therapy practice doesn’t have to be huge in order to have a big impact.

By thinking carefully about what types of clients you’d like to attract, and what kind of problems you solve for them, you can be efficient about how you invest in marketing. What you do spend on marketing generally qualifies as a business expense, as long as it’s ordinary and necessary, making it tax deductible.

The exact size of your marketing budget will vary according to your available referral network and ideal client. In an unscientific poll of our Twitter audience (n=73), 79.5% of therapists spend less than $100 per month on marketing.

This article covers the most important moving parts in the marketing plan for a solo or small group practice, with guidelines for how much to budget for each.

How to measure your marketing spend

We won’t go into too much detail here about marketing metrics, but if you’re going to be spending money on marketing, then there are a few things you should be tracking. Because if you’re not tracking anything, then how do you know what’s working?

  • Acquisition cost: This is how much it costs to acquire a new client. If your acquisition cost is more than your income, then you’ll lose money. That’s just math.
  • Return on investment: This is how much money you make from the money you spend. Again, your return on investment should be positive, or your business will be in the negative.
  • Customer lifetime value: This is how much a client is worth to your practice over time. If you charge $100 per session and they attend 10 sessions, their lifetime value is $1,000.

For example, if you’re spending $29.95 per month on Psychology Today and not getting any referrals, then your return on investment (ROI) will be zero. That’s not good.

One way to evaluate the success of your marketing is to compare your acquisition cost to your customer lifetime value. If you’re spending $100 to make $1,000, that’s a 10x ROI, which is great!

When it comes to setting a marketing budget, first think about how many clients you need. Your acquisition cost will help you ballpark how much you need to spend. If your acquisition cost is $100 and you need 30 clients, you may need to spend $3,000 on marketing. This is more an art than a science.

It also depends on how fast you want to grow. If you want to get clients quickly, you may need to spend more money. But if you can afford to grow more slowly, you can save money on marketing by relying on referrals and free marketing channels like social media. More on that later.

Reduce costs by finding your therapy marketing niche

A generalist approach—marketing your private practice to as many potential clients as possible—is both inefficient and ineffective.

It’s inefficient because it costs more than you need it to. If you run an online ad for every keyword related to a therapeutic approach or modality you’re competent in, plus related search terms, you’ll quickly drain your bank account.

And it’s ineffective because the best way to appeal to your ideal clients—in marketing jargon, “prospects”—is to demonstrate how you can solve their particular problems. It’s also ineffective because it could attract a lot of prospects who aren’t a good fit, wasting both your time and theirs.

Before you plan your marketing budget, sit down, ask yourself four questions, and note your answers.

Who is your ideal client?

The more specific, the better. Rather than “youths,” maybe it’s “LGTBQ+ people of color under the age of 30.” Rather than “older adults,” maybe it’s “older adults facing major life transitions.”

It’s fine to come up with more than one category—the important thing is to be specific. The more specific you are, the easier it is to target and reach the people who would most benefit from working with you.

What problem do you solve for your ideal client?

What are your ideal clients struggling with and how do you solve it? Again, try to be specific. What is a particular obstacle they’re facing and how are you helping them overcome it?

For example, Patrick Cesale, LCMHC of All Things Private Practice helps entrepreneurs who struggle with perfectionism and self-doubt.

Getting clear on the problem you solve for your ideal client will inform both who you target with your marketing and what you offer them.

Where do your ideal clients spend their time?

Or, more specifically, “Where do they hang out?”

For instance, in recent years, Facebook has become a more popular social media platform for older adults, while younger adults and teens use platforms like Instagram and TikTok. If you’re using social media and running ads for your practice, it doesn’t make sense to direct your time and money at a platform your target group doesn’t even use.

Outside of social media, consider the offline social groups your idea clients belong to. These could range from 12 Step programs to bible study groups to LGBTQ+ health clinics to community centers.

How can you reach your ideal client?

When it comes to social media, reaching your ideal client could be as simple as publishing content and paying for some advertising.

When it comes to in-person communities, your approach will vary according to the situation. 

For instance, if you’d like to connect with Spanish-speaking moms at a particular community center, you may want to request a meeting with an organizer who can direct you in the best way to do so.

In order to meet attendees at local 12 Step meetings, you may need to reach out to the local office of the 12 Step group in question, determine which meetings you are allowed to attend, and find out appropriate ways to make your services known.

Essential marketing budget items for a therapy practice

These essential marketing expenses are ones no therapy practice should do without—they’re key to making your business easy for clients to find. 

Website

Cost: $15 - $35 per month

Plan for your practice’s website to be the first point of contact for new clients. It’s how they learn what types of services you offer, and it’s how they get in touch with you.

To get your own domain, and design your website using a template provided by the web hosting company like Squarespace or Wix starts at around $15. Extras, like email at your domain name, may add to the cost.

This is the minimum you should have to spend on your website. If you decide to hire a designer to create a site for you, there is a wide range of freelance web designers to choose from on services like Fiverr. For a custom site, expect a one-time expense starting at a few hundred dollars and ranging into the thousands.

Directories

Cost: $29.95+ per month

The most popular directory for therapists is Psychology Today, which starts at $29.95 per month and includes six months of free service at signup. Based on your niche, there are also more targeted directories, like Therapy for Black Girls. There are also free directories, like TherapyDen.

Signing up for a listing directory makes you easier to find on Google, and it can provide a steady stream of referrals. Eventually, once your calendar is full and you have a waiting list of new clients, you may decide a listing is no longer necessary. But it can be a huge asset for attracting new clients when you’re just starting out.

Google My Business

Cost: Free

If you’ve ever found a local business by searching on Google before, pinpointing their location on Google Maps and finding their contact information and hours of operation, it’s because they went to the trouble to create a Google My Business listing.

While it isn’t technically a budget item—since it’s free—a Google My Business listing is an essential piece of any marketing plan. If you don’t have one already, invest the time in making one ASAP.

Total

Cost: $44.95 - $64.95+ per month

Depending on the one-time cost to build a website, if any, you should be able to run your marketing practice on a budget of less than $100 per month. Again, the cost varies. Test different things to see what works for you.

Typically, the more narrow your niche, the easier it will be to get referrals and the less you’ll have to spend on marketing.

Optional marketing budget items for a therapy practice

These optional items are just that: optional. But they should be near the top of your shopping list once you decide you branch out your marketing plan beyond the bare necessities.

Google Ads

Cost: Varies

It’s hard to put a price tag on Google Ads. The cost varies according to which search terms you target and the value Google ascribes to them. Luckily, Google Ads pricing is more straightforward than it’s ever been, and built-in tools let you set a budget for advertising, so it’s easy to test the waters.

When you advertise on Google, you decide which search terms your ads will appear under. For instance, if someone in your geographic area searches “family counseling,” you can pay to have your ad appear.

Broadly-focused ads, reaching many people—”family counseling” is a good example—will cost you more. More specific ones—”conflict resolution parents” or “parent and teen counseling”—typically cost less. This is one of those instances where knowing your niche is especially helpful.

Set an affordable monthly budget for advertising on Google, experiment with search terms, and see what type of traffic you get to your website. Mileage may vary: if you’re in a major city, for instance, it may be difficult to stand out in local search results. Try creative approaches until you find one that works.

Social media ads

Cost: Varies

The cost of social media advertising varies according to which platform you’re on (Facebook and Instagram are the most popular) and which demographics you target. To get a sense of whether it’s a useful addition to your marketing plan, experiment with social media ads within a set monthly budget in the same way you would with Google ads.

Keep in mind, it’s entirely possible to get new clients from social media without spending any money at all. Sharing valuable content, responding to questions, and engaging with your target audience online can help you get new clients without costing you a cent. Social media is also a great way to connect with other therapists and build your referral network.

Networking 

Cost: $10+ per month 

While advertising on Google and social media can help you connect with new clients who may never have heard of you otherwise, there’s no substitute for face-to-face meetings with the right people.

In this case, “the right people” could mean other therapists in your area, local community organizers or religious leaders, lawyers and people in the medical profession—the list goes on. 

Go through your list of contacts—whether it’s people you’ve connected with on social media, friends of friends, or folks you’ve met at social gatherings. Anyone who could play a role in the life of a potential client, and could refer them to your practice, is worth meeting over coffee.

Set a goal to meet with at least two new people each month and, to hold yourself to that goal, set a coffee budget. Your meeting may not result in an instant avalanche of referrals, but by connecting with a diverse collection of people in your community, you can begin to build a reputation, and plant the roots for future referrals.

It can be hard stepping outside your comfort zone and inviting someone you barely know to have coffee, particularly if you think of the meeting as a way to “sell” yourself to them. One easy solution: Don’t.

The purpose of networking isn’t to sell yourself and your practice. It’s to learn more about the people you’re meeting with, and find out ways your therapy services may be able to help them or others in their network. 

If you make it your number one priority to learn about their experiences and needs, you’ll not only discover new opportunities to help, but you’ll help build your reputation as an empathetic and patient listener—the kind of therapist to whom people readily refer their friends and loved ones.

Marketing is just a small part of the budget for any new practice starting out. For everything else, check out our article on how to build a budget for your therapy practice.

This post is to be used for informational purposes only and does not constitute legal, business, or tax advice. Each person should consult his or her own attorney, business advisor, or tax advisor with respect to matters referenced in this post.

Bryce Warnes is a West Coast writer specializing in small business finances.

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