How to set your clinic marketing budget without guessing

The first number you need is your patient lifetime value: the total revenue a typical new patient brings in before they stop coming. For a physio clinic, using easy round numbers: average session fee of $100, average of ten sessions across an episode of care, fifty percent of revenue to wages, super, and commissions. That's $1,000 gross revenue per patient, $500 gross profit. That $500 is the number that governs your marketing decision, not the monthly ad spend.

For a lot of clinic owners, this is the first time they've done the calculation. Once they have it, the conversation about what to spend per new patient becomes a different kind of conversation entirely. A number that felt expensive suddenly looks cheap at the right multiple.

The gross profit figure above assumes your team is fully utilised. That's the scenario where every new patient requires more of your practitioners' time, and where wages are genuinely variable on a per patient basis: more patients means more capacity consumed and a real cost on top of your acquisition spend. But many growing clinics aren't in that situation.

If you have practitioners on a salary working a full week and only seeing clients for a fraction of it, you're already paying for the rest of that time regardless of whether another patient comes in. A new patient in that chair doesn't cost you any additional wages. The wage is sunk.

In that scenario, the right number to measure your acquisition cost against is not gross profit. It's the full appointment value. Paying $130 to acquire a patient who delivers $1,040 across their episode of care, when the practitioner was going to be paid regardless of whether that patient walked in, is a fundamentally different proposition to the same spend where a real $520 wage cost also sits on top of it.

The practical implication: a clinic with significant practitioner white space can justify a higher acquisition cost than the gross profit model suggests, because the real marginal cost of adding a patient is near zero. The calculator below has a toggle for this. If your team is underutilised, switch to that mode and the ceiling it gives you will reflect your actual economics.

Where you are in your growth journey changes what percentage of that gross profit it makes sense to spend on acquisition. A clinic in a growth phase (actively trying to fill chairs, build brand, accelerate) might be comfortable spending $200 to $300 of that $500 gross profit per new patient. The logic is the same one Uber and Airbnb applied in their early years: buy growth aggressively now, build the patient database, then cut spend back once the machine is running. Every new patient is also a potential referrer and a reactivation candidate for years after their first episode.

A clinic in consolidation mode (growing well, focused on profitability, protecting margin) will look at the same maths and arrive at a very different number. Maybe twenty percent of gross profit per patient. In the $500 example, that's $100 per new patient as the ceiling. Same suburb, same clinic type, same lifetime value. Completely different budget.

Neither number is right or wrong. The right number is the one that matches what the clinic is actually trying to do in the next six months. The mistake is using someone else's benchmark when you should be using your own maths.

Once you have your gross profit per patient and your target acquisition cost, there's a clean way to turn that into a monthly budget. It starts with a simple question: how many new patients do you want this month?

Say the answer is twenty. The next question is: where are they going to come from? Break it down. How many do you expect from reactivations (past patients you'll bring back with an email or SMS campaign)? A reactivated patient costs almost nothing to acquire. Maybe five of those twenty come from there. That leaves fifteen who need to come through paid acquisition, referrals, or organic search.

If fifteen is the number you need from paid advertising, multiply by your target acquisition cost. Happy to spend $100 per new patient? That's $1,500 a month in ad spend. Not a number you invented. A derivation from the actual patient outcome you need and the economics of your clinic.

The calculation above shows why two physio clinics in the same suburb, bidding on the same keywords, can have very different marketing budgets and both be making sound decisions. But the difference in budget authority gets truly dramatic when you compare across different clinic types.

For a clinic with NDIS clients, annual lifetime value can be $10,000 to $12,000 per client. At fifty percent gross profit, that's $5,000 to $6,000 gross profit per client. A clinic owner who runs those numbers and is comfortable spending ten percent on acquisition can justify $500 to $600 per new client. Most NDIS clinic owners I talk to are spending nowhere near that, leaving significant growth sitting on the table because the benchmark they're comparing to is 'what MSK physio clinics spend,' not 'what my actual maths says I can afford.'

The inverse is also true. An exercise physiology clinic where the search volume for EP services is genuinely thin and most referrals come via GP should probably not be the clinic in the building with the largest Google Ads budget. The maths only work if the channel can actually deliver the avatar you want at volume.

There's a version of this maths that clinic owners often miss. The budget calculation assumes you're going after the patients Google can efficiently deliver. If you're chasing avatars that barely appear in search volume, or that research online and then call their GP for a referral, the whole model breaks down regardless of how good your campaign is.

I worked with a clinic that wanted to fill their exercise physiology books through Google Ads. Search volume for EP was low. Cost per click was higher than for physio. The conversion rate was poor because most patients looking for EP had been told about it by their doctor, not searched for it themselves. We pivoted: ran Google Ads for physiotherapy, which the clinic was excellent at and the local search volume supported, then built a referral pathway from physio to EP internally. The cost per EP patient through that route was less than a third of what direct Google Ads had been delivering.

Start with the patients that are easiest to reach through the channel you're using. Once you know the channel works and the CPA is where you need it to be, you can begin pushing toward the more specific avatars.

The question of how large to start is almost always answered badly in both directions. Too small ($200 a week) and there isn't enough data to know what's working. Google needs volume to optimise, and with twenty dollars a day you'll get a handful of clicks and nothing statistically meaningful to act on.

Too large ($5,000 a month before you've established what keywords convert in your area) and you're buying an education at high speed. Get it right at $1,000 to $1,500 a month first. Set a budget that generates eight to twelve confirmed bookings a month. Run that for two to three months until you know which keywords, landing pages, and time windows are performing. Then scale the budget by thirty to fifty percent and repeat. Each time you scale, you're scaling something that demonstrably works.