Would you pay $2 million a year in labor and overhead costs for your marketing department? Sounds egregious, right? Yet most people don’t even think about the numbers before attempting to build a marketing department, so we’re always surprised when we hear a healthcare provider state that they bear the expense of an internal team.
What’s needed to build a bare-bones marketing department?
- SEO Specialist $80,000-$100,000 per year
- Content Writer $60,000-$80,000 per year
- Editor $70,000-$90,000 per year
- Data Analyst $40,000-$60,000 per year
- PPC Specialist $60,000-$80,000 per year
- Paid Social Specialist $60,000-$80,000 per year
- Web Developer $80,000-$100,000 per year
- Graphic Designer $40,000-$60,000 per year
- Director/Strategist $100,000-$120,000 per year
Total labor cost for a bare bones team? $590,000-$770,000 per year, not including the cost of benefits and taxes, which is another 15%.
Of course, small providers, out of necessity, look for jack-of-all-trades. It’s like having one person be the doctor, counselor, nurse, front desk administrator, and biller all-in-one. Technically, can providers find someone who knows a little about each of those roles? They certainly exist, but they won’t be very good at 4 of the 5 roles. The same is true in marketing.
When providers say they have an internal marketing department, they usually mean they hired a Director and maybe have one or two other people on staff, most commonly a Content Writer and perhaps someone doing PPC.
What are these people doing all day? The PPC specialist certainly doesn’t need to stare at campaigns for 8 hours a day for providers with small spends. Few companies need 40 new pieces of written content a month or 80 new graphics each month. So most of that labor cost is just wasted.
This isn’t even getting into specialties. To be really effective, providers can’t use an overall “SEO Specialist”. Instead, providers need a Technical SEO Specialist, Onpage SEO Specialist, and Offpage SEO Specialist. For Graphic Design, providers need a Designer, a Creative Director, and a Videographer. For Web Development, providers need a Backend Developer, Front End Developer, and Conversion Rate Optimizer. Now labor costs start to balloon to $1.5 to $2 million a year.
Then there’s the martech. At Circle Social, we spend $20,000 a month just on technology and software subscriptions for martech support across departments.
What about training and management? What are the KPIs for each of those roles? What training is provided? Who knows enough to make sure the team is working on the right things and can support them in continued growth?
At Circle Social, we invest $2,500 to $5,000 per new hire just for onboarding training. That doesn’t count the 500 labor hours spent to initially build the 2 weeks of trainings for each role.
Building an agency is not easy, even if you know what you’re doing. So when health providers with no marketing expertise attempt to build an internal marketing department, not only do costs get out of control, but results are weak since none of the internal staff have the expertise to build, manage, or train the department staff.
Many of our clients are enterprise level, which sometimes surprises people. Wouldn’t a $200 million-a-year organization build out its own marketing department? And the answer is, no, for the reasons above.
- It’s anywhere from 3-5 times cheaper to outsource. For example, instead of hiring a full-time Graphic Designer who has nothing to do most of the time, an agency provides fractional access to an entire team of specialists for the same cost
- The level of expertise is far higher in an agency
- There are no additional overhead costs such as martech, HR, and recruiting
- No training has to be created, provided, or regularly updated
- Switching cost between agencies is far less than trying to replace an entire department full of people
The average entry-level cost to work with an agency is in the $5,000 to $10,000 a month range depending on the scope of work. That’s the cost of a single FTE for which the provider gets a minimum of 8 specialists, at least that’s our minimum assigned team size here at Circle Social. Larger contracts have teams of anywhere from 30 to 50 people assigned to campaigns, which is an average base level labor cost of $2.2 to $3.7 million if the provider were to attempt to hire the same number of staff internally. We can deliver the same services for a third that cost. For most healthcare providers, it’s not even a question of internal expertise as much as it is one of economics and cost efficiency.
Another advantage of an agency is that’s all we do. The average provider has no idea when to hire their next SEO specialist, what marketing project management software to use, which software is needed in general, how big the content team should be, or a thousand other questions that we already have down pat. As marketing specialists, we know exactly what’s needed AND we’re the ones paying $20,000 a month in martech software and infrastructure to deliver campaigns results. That’s a cost most providers can’t afford to bear either, so they end up opting for bare bones martech or limited services.
Looking to get results for significantly less than the cost of hiring internally? Get in touch with us at engage@circlesocialinc.com or call 800-396-9927.