Frank Olivo

Frank Olivo is the founder of Sagapixel. He writes on a number of topics related to digital marketing, but focuses mostly on SEO.

How Much Should You Spend on Marketing Your Medical Spa?

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“So how much do you think I should spend on marketing?”

This is one of the most common questions that I receive during the initial SEO consultation with medical spa owners. It underlines a serious problem that many medical spas have—you’re often not sure how much you should spend to acquire new customers.

The common rule of allocating 10% of your revenue to your medical spa’s marketing is quite unusable when accounting for wild variations in competition between markets and the growth stage of your medical spa.

A new medical spa may spend upwards of 20 to 40% of its revenue on Google Ads and paid social just to get started, while an established medical spa may only need to spend 2% to 5% of revenue. Relying on the “10% average” would be a terrible piece of advice in many situations.

At the same time, there are some simple questions your can answer that will help you to determine how much you should be spending on your marketing and the channels where you should advertise.

If you would like to speak with someone at Sagapixel at our medical spa marketing agency, click here to schedule a time.

First, Your Marketing Strategy Must Align With Your Growth Stage

Are you a new med spa that is hoping to get its first customers? Are you an established medical spa that simply wishes to maintain its current business size and cash flow? Are you able to spend money to acquire new customers in the long run or do you need a solid return on ad spend from day 1?

These are all vital strategic questions that you will need to answer before establishing your marketing budget.

An established medical spa is not necessarily going to have to spend as much as a brand new clinic to acquire new customers and gain market share. New medical spas often have to spend several times more than incumbent medical spas in order to capture market share, sometimes even at a short-term loss.

Need Customers Now? Google Ads and Paid Social Media Are the Way to Go

Medical spas that need to generate revenue in the short term should focus on Google Ads and Paid Social. Paid strategies such as these deliver fast, short-term results and revenue, albeit at a higher cost per acquisition than organic search (SEO) or organic social media.

Your medical spa should expect to get calls within the first week of beginning a Google Ads or Facebook/Instagram campaign.

As for budget, I would recommend as much as you can put towards client acquisition, but you’ll need at least $1000 budget for your campaign to drive enough leads to be successful.

Search Engine Optimization (SEO) and Your Organic Social Media Strategy Are the Cheaper, Long-Term Channels

If Google Ads and Paid Social Media is like buying apples at the supermarket, organic search and organic social media are like planting an apple tree in the yard.

The leads you get from organic channels such as Google and Facebook will turn out to be much cheaper in the long run, but slower to get.

If your med spa is not in desperate need of new customers now and you’re looking for long-term growth, SEO and organic social are the channels you should focus on.

The cost of these will vary depending on your market—getting you ranking on Google in Manhattan will be more difficult than getting you ranking in Cincinnati—but the investment can be as low as $1000/mo.

The great thing about investing in SEO is that once you’re ranking highly, it’s not something you lose when you stop spending on it.

Step 2: Determine Your Customer Lifetime Value

How much are you willing to spend to acquire a new customer?

If you don’t know how much a customer is worth, you can’t answer that question.

While some medical spas keep extensive spreadsheets and track of their customer lifetime value to the penny, most small to medium-size medical spas don’t. When I ask them questions about their customer lifetime value, few can give me a number for their average customer lifetime value.

Customer lifetime value is the net present value of your average customer profit over a lifetime, including any potential referral business that may be generated. While I’m not going to get into the details of calculating CLV, this post will show you how to handle it.

Once you determine your customer lifetime value, you can calculate the amount you can spend on acquiring customers.

As you can imagine, this is a really important number for your marketing and future growth.

Just keep in mind that this must align itself with the growth strategy you are pursuing. It may be worth earning cash to acquire market share with the hope of profiting once you dominate the market. You also may find yourself in a situation where you need to generate profits now.

Ultimately, All That Matters Is Cash Flow and When Your Med Spa Needs It

Once you determine how much a customer is worth to you, you can determine how much you can spend to acquire a customer.

The next question is if you need them now and or sometime in the future.

Fire up a spreadsheet, calculate your customer lifetime value. Next, choose a growth strategy—SEO and organic social are long-term strategies (6-12 months). Google Ads is a short-term strategy.

Finally, establish a budget and start testing.

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