Category Archives: Marketing Leadership

Evidence-based Healthcare Marketing: Rethinking Measurement

Save the dateHealthcare marketers face increasing pressure to make the most of their marketing investments.  The C-suite wants accountability for outcomes – volume, revenue, greater customer loyalty – and assurance that the health system is strengthening its competitive position.

The bottom line is that marketing is becoming more science than art.  Today, sophisticated tools and marketing analytics provide great insights into customer needs, values, drivers and behaviors.  They inform our decision-making, shape strategy, focus investments.  When actionable information is combined with rigorous planning, innovative ideas and disciplined tracking, marketing executives quickly close the accountability gap.

Welcome to evidence-based marketing.

On July 10, 2014, I’ll join Marian Dezelan, Chief Marketing Officer, and Chris Boyer, AVP Digital Marketing Strategy, for North Shore–LIJ Health System (Great Neck, NY) on a webinar to discuss how an evidence-based approach to healthcare marketing can better focus your strategy and produce measureable results.  Marian and Chris will share how North Shore-LIJ’s marketing department applies evidence-based marketing techniques for personalized targeted marketing, patient engagement and making the most of marketing data.

Sponsored by the Forum for Healthcare Strategists, the webinar is scheduled from 11:30 am to 1:00 pm CDT.  The session is complimentary for Forum members; non-members can participate for $125.

I hope you’ll join us.  In fact, gather your team, order in lunch and make time to learn together.

Click here to learn more about the webinar and register for the program.

Are you seeing greater consumer scrutiny of healthcare prices? You will.

eye drops 3More and more, I hear from healthcare colleagues that the number of consumers inquiring about healthcare prices is increasing. Some just want to know what a specific procedure or drug will cost. Others want to understand their out-of-pocket contributions. And many, many more complain about prices and pricing structures that, quite frankly, just don’t make sense.

It’s ironic that I ran across this Huffington Post article – More Proof that American Health Care Prices are Sky High – just when my husband called to let me know that the price of the eye drops prescription I had asked him to pick up was $208.00. Our health insurance company wanted to consult with the provider about alternatives before approving and paying for the script. It was 7:30 in the evening and the doctor’s office was closed – meanwhile my eyes are nearly swollen shut from the overabundance of pollen we’re experiencing this year. So we shelled out the $208 and will spend the next few days making multiple phone calls to try and align this patient’s needs with the doctor’s recommendations and the insurance company’s procedures.

I was curious about the cost of the drug when I read this blog post regarding the latest data from the International Federation of Health Plans, an industry group representing health insurers from 28 countries including the United States. The author’s point is that American patients pay the highest prices in the world for a variety of prescription drugs and common medical procedures.

So I looked up pricing for the eye drops on drug retailer websites from several countries, including the UK and Canada, and found that prices for the very same prescription (brand name, strength, dosage, etc.) were significantly less – around $40 (with free shipping). That’s about $8 per ml, whereas we paid $41.60 per ml. I’m talking about a bottle of eye drops that barely stands 1½ inches high. The pharmaceutical people have some explaining to do.

In fact, all of us who work in this industry do – about how prices are established, why there is so much variation across providers, products and services, why it cost so darn much. As healthcare marketers, we’re removed from pricing decisions, which are core to branding, positioning and marketing strategies for both wholesale (contracting) and retail (out of pocket) relationships.

Personally, I hope we see consumers ask more questions – and demand more answers – about the price of healthcare services and goods. And I hope we as an industry will have good answers.

It’s time to bring pricing into public view.

Part 4. Invest to build a high performing healthcare marketing team.

Marketing Team 2
Final post in a four-part series.

Marketing resource allocation planning is critical to assuring that limited marketing funds (and FTEs) are focused on marketing initiatives that have the best potential for driving revenue growth, improving overall business performance and positioning health systems for long-term success. Parts 2 and 3 of this series described the first two decision points in resource allocation modeling:

  • First, what businesses, clinical programs or market expansion initiatives offer the best opportunity for growth and profitability?
  • Second, within priority programs and service lines, what strategies and tactical initiatives will best achieve marketing goals?

The third decision point is: what infrastructure investments are required to optimize marketing performance and ROI? In other words, what capabilities, technologies, skill sets, business partners, processes and tools are necessary for the marketing team to effectively execute marketing strategy? Building a high-performing marketing team and the systems to support them are strategy-critical investments that will generate significant returns over the long term.

What should you consider?

  •  Structure, staffing and skill set of the marketing team. Is the team optimally organized and staffed to execute and manage against strategic priorities? Do they possess the skills required in today’s complex and competitive world – including business analytics and strategic thinking skills? Can they mobilize and align clinical, administrative and other functions to execute marketing strategy? Are they fluent in digital media and skilled in web, social networking and mobile technology platforms?
  • CRM and call centers. Next, evaluate the capabilities, systems and processes to capture and respond to customer inquiries (both consumer and physician), and to capture, analyze and manage customer level data. Today, marketers are moving toward integrated customer contact centers that better leverage call center, web inquiry and CRM capabilities in order to connect customers with services, capture data to improve marketing decision-making, and measure the effectiveness of marketing investments.
  • Digital marketing capabilities and systems. One of the biggest challenges facing marketers today is the pace of change and shift in investments required to ramp up digital marketing. Web, search, social media and mobile marketing are no longer optional – nor should they be secondary priorities. There is no better time to stop funding tactics with marginal returns (among my favorites are billboards) and plow those dollars into the staffing, training and systems to become digital marketing experts.
  • Decision support systems. The key question for marketers is “do we have the information needed to inform our decisions about strategy, investments and outcomes?” Competitive intelligence, market research, trended performance data (e.g. volume growth, revenue, margin, etc.), market projections, industry trends, segmentation studies and other robust information sources are vital to effective marketing decision-making.
  • Business partners and outsourced support. What to build in-house versus what to outsource is often a tough question. The rule of thumb is that if it’s not critical to core operations or a core competency in which you’re willing to invest and nurture, then outsourcing is probably the best alternative. Business or outsourced partners include advertising agencies, digital marketing firms, call center operations and research firms, among others. A periodic review of contract terms and performance is always a good idea.
  • Shorten your “to do” list. Often, one of the more difficult tasks for marketers is to eliminate activities that do not contribute to growth and improved competitive performance. But in today’s environment, “squeaky wheels” must give way to an evidence-based approach to marketing investment. The key to success is focusing your time – and dollars – on fewer, more impactful activities.

Conclusion

More than ever, chief marketing executives are being held to a higher standard of accountability for return on marketing investments. A disciplined approach to marketing resource allocation planning is required to understand what programs, services or segments will best drive growth and improve business performance, and what activities and support systems will contribute most to those initiatives.

Both top-down and bottom-up approaches to marketing resource allocation planning are necessary; top down for strategic marketing planning across a health system’s portfolio of service lines and growth initiatives – and bottom up to develop specific marketing plans and budgets within each priority program.
Most important, perhaps, is to use a data-informed approach to gain organizational commitment to stay on strategy.

Read the series:

Part 3. Let strategy drive healthcare marketing decisions.

Marketing FocusWe’ve all been there.  That place where we’re executing carefully crafted marketing plans, launching highly targeted and creative strategies, balancing both the over-stressed marketing team’s time and the under-resourced budget to make it all work when someone (e.g., administrator, doctor, service line leader) marches in with the marketing demand du jour.  Without a methodology for focusing activities and budgets on strategy-critical projects with the best potential for return on investment, every new demand takes on equal importance and, in the end, sabotages marketing performance.

Marketing resource allocation planning is the process of determining how returns on marketing investments are optimized.  It’s a multi-dimensional decision process encompassing priority services, markets and segments, the marketing mix, and marketing operations and infrastructure investments.

Part two of this series (Focus Healthcare Marketing Investments to Improve Business Performance) described the first decision point – determining those programs, products, markets, segments and initiatives with the greatest potential for growth and ROI.  Once the decision of what programs and service lines to grow has been made, you will then need to determine how time and budget dollars are allocated against the marketing mix.

Investment considerations that come into play at this point include:

  • Research and development to build, expand and enhance the mix of service offerings
  • Service line planning, clinical program development and patient care experience design
  • Building brand awareness and stimulating demand in target customer segments
  • Cultivating and strengthening access channels, physician relations and referrals
  • Sales, third party contracting and pricing
  • Advertising, promotions, marketing events and co-marketing partnerships
  • Digital, social and mobile strategies and tactics

Marketing goals and strategy decisions should clearly guide these choices. The secret to success in marketing resource allocation is to know where investments return the biggest bang.  Consumer influenced or directed services such as bariatric surgery, plastic surgery or sports marketing require more investment in direct consumer marketing, events marketing and call center support; services and procedures influenced more by physician referrals should be more heavily invested in sales, physician relations and new clinical program development.

SCALING ACTIVITIES TO INVESTMENTS

The scope and scale of marketing activities should be matched to investment levels and expected return on investment.  In the example below, Tier One priorities (those most important to strategic and financial goals) receive the majority of marketing resources whereas activities and resources for Tiers Two and Three (those with modest to no return on investment potential) are scaled back considerably.

This may seem like a no-brainer but too often, the marketing team’s time and budget are compromised by squeaky-wheels, pet projects and deep-seated needs to keep everyone happy. (I think the misguided concept of ‘internal customers’ is also to blame, but that’s an entirely different post to write).

CRITICAL QUESTIONS TO ANSWER

  • For Tier One initiatives, do we have adequate research and market intelligence to discern strategies and methods to more effectively attract consumers, increase physician referrals and move volume and market share from competitors?  What additional information do we need?
  • By service line, what segments are most attractive in terms of growth and profitability?  How are those segments likely to be influenced (e.g. consumer marketing, physician referral development, program design, hours of operation, etc.)?
  • What improvements/innovations at the service interface (e.g. scheduling, registration, access, patient navigation, web appointments, MD hotlines, etc.) differentiate and add value? What do we invest to create these programs?
  • How can we leverage existing communications channels and tools to provide effective but lower investment support to lower tier programs?  Should we provide tools, templates and information to program managers to support their marketing efforts?
  • Do we have an adequate balance of activities and investments across research, product development, web, advertising and sales activities?
  • How will we track the effectiveness of these initiatives and when do we regroup to change course?
  • What marketing constraints, risks, etc. exist and how will those be addressed?
  • How will we gain consensus for resource allocation decisions and cultivate support for that focus?

Gaining consensus is critical to keeping the organization focused on the marketing plan and investment decisions.  Not that every bright shining object can or should be ignored – some may very well offer significant opportunities – but distractions can be minimized.  The keys to effective marketing management are the discipline of focused execution, ability to discern when course corrections should be made, and capacity to seize new on-strategy opportunities.

In part four, I’ll discuss investments to build marketing infrastructure and capabilities.

Read parts one and two:

Part 2. Focus healthcare marketing investments to improve business performance.

questions3How do healthcare marketing executives decide where to allocate scarce marketing resources – both people and dollars? In today’s complex environment, determining what gets funded and what doesn’t, how much to invest and what your team should be spending time on can be a daunting task.

Marketing resource allocation decisions must be made across multiple dimensions. What services offer the best opportunity for growth, profitability and improved competitive performance? Within those programs, what specific marketing strategies and tactics should be used to achieve goals? What staffing and infrastructure investments are needed to improve marketing performance?

While it’s not an exact science, the process of marketing resource allocation modeling will help CMOs better invest limited marketing resources in initiatives that improve business performance, build brand equity and position the organization for success.

The first decision point is determining what lines of business, clinical programs, market expansion initiatives and customer segments offer the best opportunity for growth, profitability and competitive advantage.

ESTABLISHING TARGETS AND OBJECTIVES

Effectiveness of the marketing resource allocation model is supported by the discipline to target and select the FEWEST, MOST IMPACTFUL programs in which to concentrate resources. Priority growth program investments are derived from the analysis of key elements such as:

  • Volume, revenue and profitability contributions by line of business (e.g., inpatient, ambulatory, physician services, etc.), service lines and clinical programs (e.g. cardiovascular, orthopedics, etc.), new market initiatives (e.g. joint venture partnerships, facility development, etc.) or customer segments (e.g., geographic, demographic, psychographic, etc.)
  • Overall utilization, volume and demand projections
  • Rate of market growth for encounters and procedures
  • Reimbursement and profitability rates and trends
  • Organizational capacity for new growth
  • Physician supply, access, capacity and alignment
  • Health system competencies, technologies, facilities
  • Patient experience and satisfaction
  • Quality indicators and rankings
  • Competitive positioning, brand strength and market distinctiveness

This will require some work but the outcome will be well worth the effort. By comparing this information across major business initiatives and service lines, it becomes obvious that a focused subset should be targeted.

The following is a simple framework for ranking business lines, services or segments in accordance with their potential for contribution. Tier one programs are those with the greatest potential for financial or strategic returns on investment. Tier two and tier three programs are supported at lower investment levels. In this example, 60% of marketing resources are allocated to tier one projects and the remaining 40% spread across tiers two and three, with three receiving a minimal amount.

These percentages can be adjusted up and down – keeping in mind that the objective is to adequately resource those projects most important to organizational performance.

I’ve found this process to be particularly helpful in arming the marketing team with an effective, data-driven platform to ward off requests that that seem to fly in from left field on an all too frequent basis. You know the ones I’m talking about. It also helps the CMO build agreement with his or her peer executives on a focused growth agenda.

In the next post, I’ll discuss decision point two: within priority programs and service lines, what strategies and tactical initiatives will best achieve marketing goals?

Read Part One:  The Secret to Healthcare Marketing ROI? Focus. Focus. Focus.

The secret to healthcare marketing ROI? Focus. Focus. Focus.

focusPART ONE

Someone once asked me about the difference between ‘focusing’ and ‘prioritizing’ – focusing is knowing what to do; prioritizing is knowing what to do first.  These are the decision points faced by marketers every day. And especially when it comes to marketing planning and budgeting.

Most CMOs are trying to conjure up ways to achieve more with less.  Too many times, unfortunately, they end up spreading scarce dollars over too many projects which can significantly diminish the impact and desired outcomes.

When stuck between a rock (the health system’s need for profitable growth) and a hard place (the drive to cut costs), how do marketers prioritize marketing investments and gain organizational commitment to those investment decisions?

First, clean house.  Use this opportunity as a time to take a stand and stop funding activities that have no or minimal impact on strategic growth, customer acquisition, customer retention and financial performance.  Specifically look at non-marketing activities that sap resources and work with your colleagues across the health system to eliminate or move those deeds elsewhere.  Make sure your team is performing at its best; when you are being asked to do more with fewer FTEs, each has to be a stellar performer.

Second, use a marketing resource allocation methodology to prioritize limited marketing resources (dollars and FTEs) to those growth and marketing initiatives that have the best potential for improving business performance and positioning the organization for long-term success.

In prioritizing marketing resource investments, there are three basic decision points:

  1. What businesses, clinical programs or market expansion initiatives offer the best opportunity for growth and profitability?
  2. Within priority programs and service lines, what strategies and tactical initiatives will best achieve marketing goals?
  3. What infrastructure investments will be required to support effective growth and marketing management?

In other words, what will you choose to invest in to drive growth and improve profitability, and what activities and support systems will contribute most to those objectives? Both top-down and bottom-up approaches to resource allocation are necessary; top down for strategic planning across a health system’s portfolio of service lines and market initiatives; bottom up to develop individual marketing budgets within each priority program.

I know that some of the toughest issues marketers face are cutting others’ pet projects, sunsetting outdated communications tactics, navigating the politics of competing priorities, and so on and so on.  Just saying ‘no’ has not been an option for some;  a marketing resource allocation method can better arm the CMO with data-driven rationale for investment decisions.

In upcoming posts, I’ll explore the components and key questions to delve into for each of the three decision points listed above.  In the meantime, let me know some of your toughest budget challenges — together let’s find a way to stop doing more and focus on achieving more

What’s on your Top 10 reading list?

booksSo much to read; so little time.  To make it easier, McKinsey & Company has compiled a list of its readers favorite articles from 2013.  There’s excellent material here, especially for marketing executives:

  • How 12 disruptive technologies have the potential to reshape the world in which we live and work
  • How big data is changing the world for marketers and quickly becoming the new source of competitive advantage
  • Why marketers need to understand on-demand marketing (really – anytime, anywhere) and how to prepare
  • What six social media skills every leader needs
  • What game changers can stimulate US growth and renewal

Click here and start reading. Top Ten Articles of 2013.

Susan Alcorn awarded SHSMD’s highest honor

alcornCongratulations to Susan Alcorn, senior vice president  at the Jarrard Phillips Cate & Hancock, Inc. (Nashville, Tenn.), who today was awarded the 2013 Award for Individual Professional Excellence from the Society for Healthcare Strategy & Market Development (SHSMD). SHSMD’s Award for Individual Professional Excellence is the highest honor the Society can bestow on one of its members. A well deserved honor!

Click here to read more.

Five big trends, five key roles, five bold moves for healthcare marketers

neshco logoNext week, long-time colleague Candace Quinn (Brand Equals Experience) and I will present a keynote address at the New England Society for Healthcare Communications Spring Conference in Newport, Rhode Island.

Our session – Preparing for a New Era of Healthcare Marketing – kicks off at 8:30 a.m. on Monday, May 20.  Here’s a sneak preview of the talk:

Five Forces Changing Healthcare Marketing

  1. The new economics of health care reform – the industry is transitioning from ‘pay for volume’ to ‘pay for value’ through accountable care systems and risk reimbursement models.
  2. Market restructuring and emerging delivery models – consolidation and alignment through mergers, acquisitions and strategic partnerships will change competitive dynamics in local markets.
  3. Evolution of brands in physical and virtual environments – healthcare is getting smart about brands as competitive assets that drive business performance, and the importance of brand experience.
  4. Technologies that disrupt and transform – digital technologies are revolutionizing business processes everywhere, and profoundly changing the way patients and providers interact.
  5. Growing, changing, graying, connected consumers – aging baby boomers will be a driving force for healthcare services in the coming decades – not just for ‘what’ is delivered, but ‘how’ it will be delivered.

Five Critical Roles for Healthcare Marketers

  1. Growth strategist – revenue generation is the priority; adopt a strong P&L mindset, drive clear alignment of brand, marketing and sales investments to the health system’s growth strategy.
  2. Brand advocate – invest in the brand; create a powerful, differentiated, competitive brand position, and lead organizational change to deliver brand value, not just promote it.
  3. Digital change agent – web, social networking, search marketing and mobile capabilities – integrated with clinical IT systems, are no longer optional for providers that want to remain relevant.
  4. Experience champion – advocate for customer-centered decision-making and design systems and services that transform customer experience.
  5. Innovation catalyst – bring creative thinking and fresh solutions to systems, programs, services and products that attract, serve and retain customers.

Five Bold Moves to Transform Healthcare Marketing

  1. Change the marketing culture – this requires an organizational shift in thinking about marketing as tactical communications to a discipline that is strategic, cross-functional and bottom line oriented.
  2. Reconfigure the marketing organization – establish a vision, role and scope for marketing as a revenue-generating capability, then restructure marketing operations to support growth goals.
  3. Acquire new competencies, capabilities and skills – acquire expertise in business analytics, R & D, brand building, customer acquisition/retention, CRM/PRM, digital, search and social marketing.
  4. Create a compelling case for change and bias for action – focus marketing investments on strategies that grow revenue and improve business performance.
  5. Communicate new roles, new rules, new expectations – create co-ownership and co-accountability for marketing outcomes across administrative, clinical and business operations.

We hope to see you there.  If you can’t make it and would like a copy of the slide deck, just let me know.

The value of healthcare networking is, well, priceless

cactusI flew into Phoenix early yesterday to meet with Healthcare Executive Forum (HEF) colleagues.  HEF is a self-organized, self-managed group of senior executives that lead strategic planning, business development, brand management and marketing for leading health systems, as well as consultants, experts and thought-leaders in the health industry.  Among the members are leaders from Penn Medicine, The Camden Group, Henry Ford Health System, Greystone.Net, Oschner Health System, ND&P, New York-Presbyterian Hospital, Truven Health Analytics, University Hospitals, Healthcare Advisory Board, Partners Healthcare, Studer Group, and many other top notch organizations.

Yesterday’s agenda tackled topics from the latest trends in mergers and acquisitions to population health to brand valuation.  Klein & Partners’ Rob Klein shared insights from his annual Omnibus Survey on consumers and healthcare.  Today, we’re going to hear about breakthroughs in mobile health, learn how employee engagement played a role in winning the Baldrige Award, and techniques for improving marketing effectiveness.

We’ve been meeting an average of twice a year for nearly twenty-five years to monitor national trends and developments in the health industry, and to share insights, experiences and case studies.  Most of our original members are still active, and new recruits have been invited along the way as people inevitably retire or move on to opportunities outside of healthcare.

Often, our sessions are held in conjunction with industry conferences such as the Greystone.Net Healthcare Internet Conference or, as is the case this week, with the Forum for Healthcare Strategists Marketing Strategies Summit.  And we also seek opportunities to visit leading organizations and locations where we can interact with companies and leaders forging new paths in healthcare.  Over the decades I’ve been involved, that has included Mayo Clinic, Chicago’s Northwestern Memorial Hospital, and the National Health Service in the U.K.

The rich content and discussions that occur at each meeting, along with the intimate forum of our gatherings, produce a supportive, learning environment.  And the trust and mutual respect among the members cannot be understated.  We are each unto each other mentors, teachers, students, colleagues and, most of all, friends.

I’m already looking forward to our Fall session.

Straight talk about the state of healthcare marketing

chief revenue officerEarlier this week, I sent an email to a group of long-time and much respected healthcare marketing colleagues with a rather innocent request:  one of our health system clients is recruiting a director of marketing and seeking candidates for the position.  What followed was a firestorm of comments – about the lack of qualified candidates, murky state of healthcare marketing, unattractiveness of healthcare to people that want to practice “real” marketing – countered by a few expositions on the societal flaws that brought us to this state.

So here are my two cents.  By and large, healthcare executives do not really understand the marketing discipline. And I’m not just pointing fingers at the C-suite; as marketers, we’ve made our own beds, so to speak.  In nearly every other industry, marketing is considered a strategy-critical, revenue-generating core business capability.  But if we’re honest, in healthcare, marketing is still very much structured and primarily resourced around communications activities that are not designed nor hardwired to significantly impact customer acquisition and retention.

Holding on to a narrow view of healthcare marketing as simply promotions wastes marketing investments and sub-optimizes performance.

Changing these dynamics requires straight talk from the chief marketing executive, CEO and other C-suite leaders about what it really takes for marketing to drive revenue growth, build brand equity and improve financial performance.

Let’s get that conversation started:

  • How is competition changing and what will be required of the health system to compete effectively? Is a plan in place and are actions underway to effect those changes? If not, why not?
  • Is the marketing department structured, staffed and resourced to achieve revenue targets, build brand equity and improve the organization’s competitive leverage? If not, why not?
  • Are financial, business and market analytics driving marketing planning, and the decisions for where you focus marketing activities and investments?  If not, why not?
  • Do you have the right people with the right skills sets and the right tools in place to execute marketing strategies that drive patient acquisition?  If not, why not?
  • Are you investing full speed ahead in web, social, search, mobile, CRM/PRM and other marketing systems and capabilities required both now and in the future? If not, why not?
  • Do marketing and operations work collaboratively, and are they held mutually-accountable for customer acquisition, customer experience, and customer retention outcomes? If not, why not?
  • Are you measuring marketing performance?  If not, why not?

I’m sure there are other questions, but you’ll probably need to order in lunch just to get through these.  Tell me what you think.  And, if you know a good candidate for that director of marketing position, please give me a call.

Five essential moves to transform healthcare marketing

Across the U.S., healthcare marketers are feeling the pressure to deliver greater returns on marketing investments. Changing economics are front and center, and make a compelling case for the role that marketers must play in an increasingly competitive environment.

Holding on to a narrow view of healthcare marketing as simply promotions sub-optimizes marketing performance and wastes marketing investments.  Best practice performers understand marketing as a business discipline aimed at achieving revenue growth and better business performance.

Success requires a purposeful, comprehensive and integrated approach to better understand markets, develop and deliver quality healthcare services, build effective business models, and create loyal customers.

Five essential moves

Creating a marketing or growth-oriented culture may seem formidable in organizations that are operations versus market driven – and many health systems are just that. However, with increasing recognition by healthcare executives that significant change is required for success under new reform mandates, marketers play a key role in helping organizations understand competitive dynamics, discover new growth opportunities, create new lines of business, and enhance points of competitive differentiation .

Here are five essential moves to effect the change:

  1. Transform the marketing culture – David Packard (of the Hewlett-Packard’s) is credited with saying that “marketing is too important to be left to the marketing department.” His point is that marketing, like HR, finance and other core business functions, is a strategy-critical competency for organizations that want to grow, thrive and succeed. This requires an organizational shift in thinking about marketing as tactical communications to a discipline that is strategic (focused on stuff that matters), cross-functional (orchestrated across the value chain), and bottom line oriented (delivers on revenue targets).
  2. Reconfigure the marketing organization – today, many (far too many) health system marketing organizations are structured strictly along functional lines (advertising, PR, events, sales, etc.) and operate primarily as communications service bureaus rather than revenue-generating strategists. Health systems must establish a vision, role and scope for marketing as a revenue-generating capability, then restructure marketing operations to support growth imperatives. Building a unified, high performance marketing operation is job one – investing in the marketing management infrastructure, elevating skills, adopting data-driven planning methods, laser-focusing marketing resources, establishing performance metrics.
  3. Acquire new competencies, capabilities and skills – Historically, healthcare marketing departments have over-invested in communications activities and under-resourced other aspects of marketing practice that drive customer acquisition and revenue growth. Today’s healthcare marketers must demonstrate expertise in market intelligence, business analytics, new product/program R & D, brand building (not just brand promotion), market and customer creation, relationship sales, social commerce, community management, cross-channel content marketing, and more. Customer relationship management (CRM), provider relationship management (PRM) and customer contact or call centers are essential marketing systems.
  4. Create a compelling case for change and bias for action – Data builds the case for focusing marketing investments on strategies that grow revenue, improve business performance, increase brand loyalty and build sustainable competitive advantage. For healthcare marketers, the strategy-critical short list includes brand building, volume building, channel management, new models of care and customer engagement that optimize profitability under reform economics, and leveraging web, social, search and mobile technologies for patient acquisition and retention.
  5. Communicate new roles, new rules, new expectations – The first step for marketers is to forge a robust partnership with administrative, clinical and business operations, and create co-ownership and co-accountability for marketing outcomes. Establish new ground rules, such as: marketing resources will be prioritized to strategic planning, business development, growth and financial performance imperatives. Or that data and analysis will inform strategic marketing thinking and planning, and provide an evidence-based approach to marketing investment. And, my favorite: time – and dollars – will be focused on fewer, more impactful activities; and tasks that do not contribute to growth and improved competitive performance will be transitioned or eliminated.

Now is the time

For health systems, growth and profitability are imperative. New reimbursement methods and emerging business models necessitate a different approach to customer acquisition, a fresh focus on customer retention, and a greater emphasis on customer engagement. And the transformation of marketing practice driven by social networking, search and mobile technologies can no longer be ignored.

Now is the time for marketers to assess the role, functions and performance of marketing departments, and move aggressively to transform marketing from promotions-oriented tactics to growth-oriented strategic leadership.  To build powerful, differentiated brands that drive growth, innovation and better business performance.  To lead organizations in mainstreaming social, search and mobile technologies that engage customers, build commerce and improve business functions.

Change can be difficult. Yet, will deliver substantial and long-lasting benefits.

This post is number three in a 3-part series.  Click here to read parts 1 and 2:

5 Roles for Healthcare Marketers to Adopt Now

things to doAcross the US, healthcare marketers are moving quickly to transform the role, capabilities and functions of their marketing departments. Powerful forces are converging to change the underlying basis for competition in the healthcare industry, and health systems are experiencing more intense competitive activity in anticipation of reform and other industry pressures. For the foreseeable future, providers will be operating with competing and somewhat conflicting objectives as they attempt to optimize volumes for core clinical programs, while simultaneously building accountable care delivery models.

Marketing executives can help health systems successfully navigate the new competitive landscape by adopting five key roles:

  1. Growth strategist – Revenue generation is the priority. In nearly every other industry, marketing is valued as a revenue-generating business competency critical to driving growth, brand loyalty and better financial performance. Health systems that hold on to a narrow view of healthcare marketing as simply promotions sub-optimize marketing performance and waste marketing investments. It is essential for chief marketing executives to adopt a strong P&L mindset, drive clear alignment of brand, marketing and sales investments to the health system’s growth strategy, and create co-accountability for outcomes across the entire executive team. Success demands a marketing culture, not just a marketing department.
  2. Brand advocate Marketers must lead the change to create organizations that deliver brand value, not just promote it. Powerful brands drive growth, profitability, market leverage, staff commitment and customer loyalty. To date, however, brand investments have been largely focused on brand communications, including brand identity systems, advertising and promotions. Today’s approach to brand building must be focused on delivering brand-differentiated value, and address the complexities of newly developing accountable care models, mergers, acquisitions, employed medical practices, ambulatory, post acute and retail health services.
  3. Digital change agent – Digital technologies are revolutionizing business processes everywhere. More than ever, consumers are seeking healthcare information, sharing experiences, selecting treatments and interacting with providers online. Leading health systems are accelerating efforts to move from static websites to integrated, multi-platforms that reach and engage consumers, support patients and families with care management, facilitate workplace communications and promote clinical decision-making. Web, social networking, search marketing and mobile capabilities – integrated with clinical IT systems such as EMR and patient portals – are no longer optional for providers that want to remain relevant.
  4. Experience champion – Customer experience is more than HCAHPS scores. It’s about meeting customer expectations every day in every interaction by hard-wiring administrative systems, appointment scheduling, meeting and greeting, clinical processes, customer engagement, billing, follow-up and other critical touch points to deliver on your brand’s value proposition. Rich, meaningful, loyalty-building experiences don’t happen by accident, they happen through experience design, training and establishing direct accountability for customer experience. Marketers can champion customer-centered decision-making and innovations that transform customer experience.
  5. Innovation catalyst – Transformation of care delivery systems, business processes, and market-driving strategies are top priorities for health systems. Marketers can help by creating a focused customer-centered approach to innovation. Opportunities to take the hassle out of healthcare are vast. Consumers are frustrated and most of the industry is woefully behind in providing on-line conveniences such as scheduling and customer communications. Success stems from creative thinking, fresh solutions, and relevance to customers – and that puts marketing front and center as the curator of customer intelligence.

Where to start? Establish a transformative agenda for change.

The CMO mandate is transformation of marketing practice. It’s a challenge that will require a purposeful, comprehensive and integrated approach to evolve healthcare marketing. But it will deliver substantial and long-lasting benefits – profitable growth, brand loyalty and better business performance.

This post is number two in a 3-part series. Click here to read the first – Five Forces that will Change Healthcare Marketing. In an upcoming post, I’ll address Five Bold Moves to Transform Healthcare Marketing.

 

Five Forces that will Change Healthcare Marketing

In the healthcare industry, powerful demographic, economic, societal, technology and legislative forces are converging to change the underlying basis for competition. For health systems, new economic models, disruptive technologies and transformation of care delivery systems are front and center – challenging marketing executives to better understand and anticipate the impact of this change.

Here are five forces marketers must watch:

One – the new economics of health care reform.

While it is difficult to predict with certainty the future of legislated mandates for reform, the wheels of change have been set in motion. Reimbursement models featuring bundled payments and warranties to deny payment for errors, rework and readmissions are being developed and implemented. If health insurance exchanges survive political challenges, they are set to roll out at the state level in 2014. Insurance mandates could result in many more insured individuals and providers worry whether they have capacity for the newly insured, particularly at primary care access points.

Marketers can play a critical role in how health systems better understand and relate to consumers under these new structures. And must know not only the top line revenue implications of customer acquisition, but also the bottom line impact of key customer segments.

Two – market restructuring and emerging delivery models.

Consolidation and alignment among health systems, hospitals, physician groups and post acute care providers will continue as organizations move to create the critical mass, economies of scale and geographic coverage to improve market leverage. Competition for physician alignment remains fierce in many markets and employment is the primary model for integration. These strategies are core to creation of accountable care delivery models where financial performance hinges on care coordination, quality outcomes and cost effectiveness, and will command executive attention for some time to come.

When it comes to market restructuring and emerging delivery models, marketers will be challenged on many levels, including brand building across a diverse portfolio and in multiple markets, and developing marketing systems to support multiple SBUs.

Three – evolution of brand in physical and virtual environments.

As in other industries, healthcare is seeing a rise in brand driven competition. Brands that align core elements of competitive positioning, operational design, brand architecture, and service experience, will begin to establish value that ultimately equates to brand loyalty, growth and expansion. Other critical aspects of brand evolution for healthcare marketers will be brand building and brand management for multi-facility, multi-market and multi-service health systems and standardizing brand experience across health system-branded, employed physician groups.

Additionally, as organizations invest in clinical information systems such as electronic health records, and embrace web, social and mobile technologies, marketers will find that the complexity of building and managing brands in the digital space also increasing.

Four – technologies that disrupt and transform.

We’re witnessing an amazing shift in terms of how people are relying on web, social networking and mobile technologies, and that’s changing everything for how providers engage with customers. The rise of smart phones and tablets such as the iPhone and iPad have put information, communications and commerce just a click or voice command away. Digital strategies have to move beyond the hospital website and Facebook page to a fully integrated approach for reaching and engaging consumers, supporting patients with care management, facilitating workplace communications and promoting clinical decision-making.

A comprehensive web, social and mobile capability, integrated with clinical IT systems such as EMR and patient portals, and embedded in physical environments, is no longer optional for organizations that want to remain relevant.

Five – growing, changing, graying, connected consumers.

The United States is experiencing a dramatic increase in the numbers of people who live to old age, challenging Americans of all ages as they cope with retirement funding, health care, lifestyle and other issues that are important to an aging population. People 65 and older numbered 39.6 million in 2009, representing 12.9% of the U.S. population – or about one in every eight Americans. By 2030, there will be about 72.1 million older persons, more than twice their number in 2000 and will count for nearly 20% of the population (Administration on Aging, DHHS).

For demographers, 2011 was significant in that it marked the first year that baby-boomers began turning 65; and for the next 15 to 20 years, about 10,000 people will turn 65 years old every single day. They will be a driving force for healthcare services in the coming decades – not just for ‘what’ is delivered, but ‘how’ it will be delivered.

So, what’s a marketer to do?

In the short term, one of the most important roles chief marketing officers can play is helping organizations understand and address the competitive dynamics of restructuring markets and intensifying competitor activities. Longer term, the over-arching objective is to create a future-ready, high-performing marketing capability that can address the changing basis for competition and drive growth, innovation and better business performance.

In a future post, I’ll address five critical roles for healthcare marketing executives to embrace in this new era. Please let me know if you have ideas and examples that you’d like to share.

 

Healthcare Marketers – Are You Future Ready?

This past week, I attended both the Healthcare Executive Forum gathering and the 17th National Summit for Healthcare Marketing Strategies in Orlando, Florida.  Both meetings were rich with important, timely content presented by many of the best in the industry.

One theme carried through all the sessions – the times, they are a changin’ – and the clarion call for marketers was to move purposefully and rapidly to help organizations embrace change and drive transformation.

 The underlying basis for competition is shifting in the health industry and will continue to do so as market and government reform-driven movements take hold.  Changing economics are front and center, creating unprecedented opportunities for marketing leaders to step up and be integral catalysts for innovative practices that drive growth, customer loyalty, and better business performance.

I had the honor of speaking with three marketing professional who are doing just that.  In our session – Are You Future Ready? – Ellen Barron (AVP Marketing and Communications for University of Iowa Healthcare), Phyllis Marino (VP Marketing and Communications at MetroHealth), and Suzanne Sawyer (Chief Marketing Officer and AVP for Penn Medicine) each spoke about overhauling their respective marketing operations to create the competencies and systems required in today’s and tomorrow’s competitive environment.  In upcoming posts, I’ll share highlights from their case studies.

So here’s my takeaway.  Now is the time for chief marketing officers to:

  • Assess the role, functions and performance of marketing departments and move aggressively to transform marketing practice from promotions-oriented tactics to growth-oriented strategic leadership. 
  • Build powerful, differentiated brands that drive growth, innovation and better business performance.  
  • Lead organizations in mainstreaming web, social and mobile technologies that engage customers, build commerce and improve business functions. 
  • Be a champion for customer-centered decision-making and innovations that transform customer experience. 

Following is a snapshot of a slide from our presentation – these are urgent and essential actions for all healthcare marketing leaders. 

Greetings from the 17th National Summit – Healthcare Marketing Strategies

The 17th National Healthcare Marketing Strategies Summit kicked off yesterday at the Ritz Carlton Grande Lakes here in Orlando, Florida.  I need a clone to take advantage of the many great sessions, speakers and networking opportunities. 

What’s up today?  Here are just a few of the sessions and speakers worth checking out:

  • Aligning brands across digital channels – Jessica Carlson (Sentara) and Carla Bryant (Corrigan Partners)
  • Integrating new media into physician marketing – Lyle Green (MD Anderson Cancer Center), Jill Lawlor (Cooper University Hospital) and Dan Dunlop (Jennings Health)
  • Improving patient experience: a marketing and clinical partnership – Suzanne Hendrey (Baystate)
  • Driving results with marketing analytics – Marc Beaumont (UAB Health System), Danny Fell (Neathawk Dubuque & Packett), and Linda MacCracken (Thomson Reuters)
  • Breaking the rules of website design – Chris Boyer (Inova) and Chris Bevolo (Interval)
  • Digital marketing – focus on conversations – Suzanne Sawyer (Penn Medicine) and Rob Grant (eVariant)
  • Physician trends: the impact on marketers – Peter Brumleve, C. Josef Ghosn (Florida Hospital) and Steve Sloate (Cirra)

Hope to run into you – if you’re here, stop by the Brains on Demand booth in the exhibition hall and say hello.

Want to Improve Your Marketing Department? Seven Questions to Get Started.

Across the US, healthcare marketing executives are looking hard at their marketing department structures, capabilities and practices, and asking if they have what it takes to transcend the ‘pay for volume’ to ‘pay for value’ economic model.  It’s my belief that we’ll be living in both worlds for some time to come. 

Nonetheless, it’s important for marketers to re-evaluate their marketing operations in this new environment, do a thorough assessment of capabilities and skills gaps, and move purposefully and quickly to reinvent the role of the marketing department.  Building a high performing and accountable marketing team is job one. 

Here are seven questions to help CMOs get started:

  1. What is the current state of marketing in terms of priorities, effectiveness, capabilities, skills, systems, structure and performance?
  2. Are our marketing strategies, activities and investments tightly aligned to the health system’s strategic vision and growth objectives?
  3. What are the marketing opportunities and challenges in regards to changes in the market (e.g., reform economics, market consolidation, competitor activities, etc.), and in the delivery system (e.g., care transformation, multiple geographies, expanding services portfolios, employed physician SBUs, etc.)? 
  4. How are advances in technology (digital, social media marketing, CRM, etc.) changing marketing practice, and what new infrastructure, skills and competencies will this require?
  5. Do we have the infrastructure, decision-support systems and analytic skills to assess and quantify opportunities, drive strategic decisions, monitor and track return on marketing investments? 
  6. How do I strengthen relationships between planning, business develeopment, marketing, PR and sales, as well as with finance, IT and operations, to better inform and support brand building, business development and growth priorities?
  7. What marketing capabilities and controls should be held by the corporate operation; what is optimally administered by major business units?

Now is the time for chief marketing officers to move boldly and transform healthcare marketing from promotions-oriented tactics to growth-oriented strategic leadership.   Embracing change is the first step.

What is Your Health System’s Marketing Philosophy?

Marketing departments differ from health system to health system. Some are expansive, core business functions with strong growth accountabili­ties aligned to strategic planning, business development, clinical operations and financial management initiatives.

In others, marketing is configured more functionally to support the development and deployment of marketing tactics aimed at research, promotions and sales.

And some have not evolved far from those early days when marketing relied on a narrow set of tools (e.g. press releases, health fairs, advertising, newsletters) to promote programs and services,  making it difficult to link marketing expenditures and activities to business outcomes.

Why such a difference? An organization’s approach to marketing is shaped by a variety of factors including strategic focus, growth objectives, culture or even leadership’s understanding of the marketing discipline.

Which of the following describes your health system’s approach to marketing?

  • Product-driven.  A product-driven marketing orientation assumes that as long as a health system has excellent outcomes and a top notch safety record, business will find its way to the front door. Performance improvement, leading edge clinical technologies, physician talent and development of clinical centers of excellence are core areas of focus. Awards and recognitions (such as “Top 100” designations) reinforce the organization’s quality achievements. Physician influ­ence trumps consumer choice. The clichéd expression “build it and they will come” is an entrenched belief, as it the assumption that clinical quality alone will create com­petitive advantage.
  • Sales-driven.  Sales-driven health systems primarily view marketing as a tactical tools to drive volume to clinical programs. Filling beds, getting appointments, and securing contracts are primary goals. Consumer pro­motions, physician referral development and managed care contracting are core capabilities. The focus is on more volume for existing services. These are all good things, but a purely sales-driven organization may miss opportuni­ties to discover new niches, create new products and lines of business, or enhance points of differentiation that grow overall revenue potential.
  • Market-driven.  Market-driven organizations place greater emphasis on market research to better understand customer needs and discover market opportunities that can be addressed in unique ways. Designing and developing services, programs and access points to attract key customer segments are priorities for the marketing operation, making R&D a core competency requirement. Marketing planning is more strategic than in sales-driven organiza­tions, encompassing segmentation and targeting, product positioning and design, pricing, promotion and channel strategies – and is a more integrated process through which value is created. Because growing overall market potential and profitability is as important as growing market share, marketers must have a strong P&L mindset.
  • Relationship-driven. Customer-driven organizations place significant emphasis on mass customization as a competen­cy to create one-to-one relationships, enabled by sophisti­cated, enabling CRM technology that recognizes, supports and delivers customized messages, offerings and solutions for valued customers. Today, some of these capabilities are embedded in call center and CRM systems, but new advancements, such as the widespread implementation of electronic health records and growth in social media communities offer health systems unprecedented opportunity to better understand and predict the needs of patients and customers – and proactively design the marketing strategies, tactics and programs that stimulate and drive demand.
  • Market-DRIVING.  Market-driving companies are those that re-set the rules of competition through value innovation – radical, disruptive moves that create new markets, transform customers into fans, and build such distinct points of competitive advantage that they are dif­ficult to duplicate. Think Apple, which continually breaks its own sales records, most recently having sold over 1 million units in the first 24 hours of the iPhone 4S launch. Innovation is the core competency – and success comes from developing deep insights into core human desires, discovering unmet needs, and bringing creative, profitable ideas to market.  Who are the market-DRIVING health systems?

One approach is not necessarily “right” where another is “wrong” – what is important to understand is that each path requires a specific configuration of core competen­cies, staff capabilities, processes and investments.  Misalignment occurs when management wants to achieve significant improvements in strategic growth, for example, but has a production-orient­ed marketing operation.

With all of the change going on in the industry, this is an ideal time for marketers to assess their marketing department structures, capabilities and investment priorities. 

So where do we start?