So, you’re jumping into budgeting — nice work! Starting now will allow you to align your budget with attainable goals that can get you where you need to be. Whether that’s building census, growing awareness, executing on a rebrand, maximizing a referral program or all of the above, your goals are what ultimately will drive your marketing budget.
“Don’t make the mistake of starting with a number and then backing into your goals,” says Angell Marketing director of account services, Brittany Dagenhart.
Some teams approach it just like that: We have this budget allocation for marketing and here are our goals.
“On the surface, that seems to make sense,” Brittany shares. “But the smart way to go about budgeting is to begin with goals. Then, use historical data to calculate what it will take to get you to those goals. And, finally, align the tactics most suited to achieving them.”
START WITH TWO BASE NUMBERS
For all communities, managing occupancy — and doing the calculations around attrition, advancement into assisted living or memory care inventory, and any other census drivers — is the first step in planning for your next fiscal year goals. Essentially, you want to determine your budget by matching the net gain in occupancy with the cost per move-in. Stay with us here … If you have data on your census, including total inquiries, move-ins and move-outs for the past year, you can start to build your budget equation. If you don’t have this data, you can use industry standards (but do make a commitment that moving forward you and your team will track these numbers).
The numbers you first want to establish to create a budget include:
- Total inquiry-to-move-in (aka closing) ratio
- Cost per inquiry
Total inquiry-to-move-in (aka closing) ratio.
Using 2025 numbers, a standard calculation to establish your inquiry-to-move-in ratio may look like this (and keep in mind, these numbers are for instructional purposes only and may be wildly different from your own):
- Total number of inquiries you received in FY2025 = 825
- Total number of move-ins in FY2025 = 33
- Inquiry-to-move-in ratio (33 ÷ 825 = .04) = 4%
Cost per inquiry.
A standard calculation to establish your cost per inquiry may look like this:
- Total number of inquiries you received in FY2025 = 825
- Inquiry-generating marketing budget for FY2025 = $330,000
- Your cost per inquiry last full year of data was ($330,000 ÷ 825) = $400
CALCULATE YOUR ANNUAL MARKETING BUDGET
Now that you’ve established those two important numbers, it’s time to figure out your marketing budget number for the coming year. Again, this is an example only.
First, establish total move-ins needed. Getting to your “move-ins needed” number starts with the occupancy goal. How many move-ins do you need to reach your occupancy goal? How many move-outs do you expect that you’ll need to back-fill?
A standard calculation to establish your move-in goal for the coming year may look like this:
- Net move-in goal = 40
- Your average attrition = 5
- Total move-ins needed (40 + 5) = 45
Now, establish total inquiries needed. Using your closing ratio, along with your move-ins needed, figure out your inquiry number. And then multiply that by your cost-per-lead figure.
A standard calculation to establish your total inquiries needed may look like this:
- 45 move-ins needed ÷ 4% closing ratio = 1,125 inquiries needed in 2027
- 1,125 x $400 (cost per inquiry) = $450,000 annual budget for direct marketing expenditures
WHAT ABOUT NON-LEAD-GEN TACTICS?
If you need tactics or activities to help the sales team do its job more effectively but are not direct inquiry generators, you’ll need to increase your marketing budget to accommodate those. Such tactics could include:
- New collateral materials (brochures, information sheets, floor plan updates)
- A photo shoot to update your photography library
- Website refresh or redesign
- Sales training for your team
All of these strategies will help your conversion/closing rate, but they won’t necessarily impact the number of inquiries delivered to your front door.
WHAT IF BUDGET ALLOCATIONS ARE HIGHER THAN MY AVAILABLE MARKETING BUDGET?
What if my leadership says my marketing budget is $400,000 but the math says it needs to be $450,000 … and that’s only lead-gen! In a perfect world, your team would have all the money you need to achieve your goals. If you don’t live in that world, some adjustments you can make to the calculations to close the gap, include:
- Improving your inquiry-to-move-in ratio. The better the ratio, the fewer leads you need. But your sales team has to be up for the challenge in order to meet the goal.
- Working with other departments within your community. Investigate where resources could be shifted and tactics could be shared to benefit multiple departments. Perhaps HR has budget that could help cover non-lead-gen tactics like a photo shoot or new collateral that could be used in recruiting efforts.
- Partnering with a strong, full-service marketing agency. You probably knew this was coming. But ensuring you have the right mix of tactics in place is essentially the key to making sure your spend is working for you. Some tactics drive cheaper inquiries. Some drive better quality inquiries. Having the right mix to balance cost-per-inquiry AND taking full advantage of lower-hanging fruit will help improve ratios and potentially reduce cost-per-inquiry.
Budgeting is our jam. Let us know how we can help.