How To Create A Marketing Budget For Your Care Home… And Why It Could Add £1M+ to Your Revenue
Do you have a Care Home Marketing Budget for your care home?
Hello, it's Simon Beck here from Care Home Marketing Expert. Today, I want to discuss something that genuinely frustrates me when speaking with care homes across the country - the way most owners approach their marketing budgets.
I've seen it time and time again. The care home has no idea how to put together a marketing budget, so they simply pick a number that "feels right," cross their fingers, and hope for the best. It's like throwing darts blindfolded!
Even worse, many care homes don’t have a marketing budget at all! (Could this be you?)
Meanwhile, their competitors - the ones filling beds faster and generating massive returns - they're using precise calculations to ensure a massive ROI on their marketing budget.
Here's the uncomfortable truth, and I don't say this to be harsh, but if you're not using data to build your marketing budget, you're leaving hundreds of thousands—potentially over a million—in revenue on the table.
Watch the video below where I walk you through how to use our Care Marketing Budget Calculator to create your marketing budget
The Million-Pound Opportunity Hiding in Your Empty Beds
Let me give you a reality check that will grab your attention. Picture a typical 50-bed care home charging £950 per week, currently running at 78% occupancy. That's 39 beds filled and 11 empty.
Those 11 empty beds aren't just vacant rooms—they're like 11 suitcases stuffed with cash that you're turning away at the door! They represent £1,086,800 in lost annual revenue.
But here's where it gets really interesting: due to your fixed cost structure, the vast majority of revenue from those final 20% of beds drops straight to your bottom line as PURE PROFIT. Your staffing, utilities, and overhead are already covered. Every additional resident is essentially printing money for you.
So the question isn't whether you can afford to invest in filling those beds—it's whether you can afford not to. And trust me, you can't!
The Four Numbers That Control Your Financial Future
Before you can build an effective budget, you need to know your conversion funnel inside and out. I'm passionate about metrics because they don't lie. Tracking these four key performance indicators will determine whether your marketing investment generates massive returns or disappears into a black hole:
- Monthly Lead Generation - How many inquiries are you generating each month? This is your pipeline's starting point. Without leads, nothing else matters.
- Lead-to-Show-Around Conversion Rate - What percentage of leads actually book and attend a tour? Industry benchmarks suggest 10-20%, but this can be much higher rates with the right approach.
- Show-Around-to-Resident Conversion Rate - Of those who tour your facility, how many become residents? You should expect 60-80% if your sales process is optimized. Anything less than that and you have a problem. It makes me angry and sad when I see homes with beautiful facilities converting at just 25% simply because they haven't trained their staff properly!
- Average Length of Stay - Here's why this matters. At £950 per week, if your average resident stays for two years, that’s £98,800 in lifetime value. Cut that to one year, and you've halved your return while doubling the number of leads you need to generate. It's simple maths!
The upside: Achieveable improvements in these 4 metrics create exponential budget savings. Boost your show-around conversion from 50% to 75%, and you'll need dramatically fewer leads to fill your beds—slashing your marketing costs while maintaining the same occupancy results.
Visit www.carehomemarketingcalculator.com and enter your own figures to create your marketing budget today.
It’s completely FREE!
How Much Should You Spend Per Resident?
Next you need to decide how much of the Average Lifetime Value of a resident you are willing to invest to acquire one
In our example, each resident generates £98,800 over their stay. How much of that would you be willing to invest to acquire them? Industry leaders typically allocate at least 5% of lifetime value for acquisition costs. In our example, that’s £4,940 per resident or a maximum of £494 per qualified lead (as it takes 10 leads to generate each new resident).
This reframes everything! Suddenly, spending £200 on Facebook ads to generate one qualified lead isn't expensive—it's way under budget! Meanwhile, a £50 newspaper ad that generates zero leads is infinitely expensive.
The Two-Phase Budget Strategy That Maximizes ROI
It’s important to understand there are actually two distinct budget phases when solving an occupancy issue:
Phase 1: The "Get Full" Budget - This is your initial investment to reach 100% occupancy. Using our 50-bed example home above, you'd need to generate approximately 110 leads to fill those 11 empty beds. With a 5% acquisition spend (£4,940 per resident), your "get full" budget would be around £54,340. If you think that seems a lot, bear in mind:
1. You don't have to spend all of it
2. This will produce well over £1 million in additional revenue for the home and that almost all of that will be pure profit!
Phase 2: The "Stay Full" Budget - Once you're at capacity, you only need to replace residents due to natural attrition. This ongoing monthly budget is significantly lower—roughly £7,500 per month in our example—because you're maintaining rather than building occupancy.
The benefit: This two-phase approach prevents the common mistake I see all the time - either under-investing initially (never reaching full capacity) or over-investing long-term (wasting money on unnecessary leads when you're already full).
The Conversion Rate Multiplier Effect
Here's where the real magic happens. Instead of just throwing more money at lead generation, focus on optimising your conversion rates first. The impact is dramatic:
- Improve your lead-to-show-around rate from 20% to 30%, and you need 33% fewer leads
- Boost your show-around conversion from 50% to 75%, and you need 33% fewer tours
- Combine both improvements, and you've nearly halved your lead requirements
The bottom line: A £5,000 investment in sales training or facility improvements often delivers better ROI than a £20,000 increase in advertising spend.
Pro Tip - Always fix your conversion funnel from the end first and work backwards. It's pointless spending money on generating leads if they're going to fall through the cracks (or sometimes gaping holes!) in the conversion/sales process.
And, by fixing the show-Around-to-Resident Conversion Rate and the Lead-to-Show-Around Conversion Rate rates first, you'll need to generate far fewer leads to keep your beds full which means lower marketing budgets and higher profits. Who doesn't want that?
Your Next Steps to Marketing Budget Mastery
- Visit www.carehomemarketingcalculator.com and input your own figures. If you’re not sure of something, give it your best estimate to get you started.
- Start tracking your four key metrics immediately. CareMarketingSystems, our specialist marketing software for care homes will help you with this.
- Calculate your true lifetime value per resident.
- Decide on your acquisition spend percentage - how much you can afford to spend to acquire a new resident.
- Build your two-phase budget strategy.
- Get marketing!
The care homes that master this data-driven approach don't just fill beds faster—they do it more profitably, with predictable results and measurable ROI.
Your empty beds are costing you money every single day. The question is: will you continue guessing, or will you start calculating your way to consistent 100% occupancy?
The choice—and the potentially million-pound opportunity—is yours.
If you need help implementing any of this, don't hesitate to reach out. I'm passionate about helping care homes succeed, and I'd love to help you too.
