Tag Archives: marketing resource allocations

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.


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).


  • 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:

Investing in the Marketing Management Infrastructure

Part 4 of Prioritizing Marketing Resources Key to Return on Investment Goals.

Marketing resource allocation planning is critical to assuring that limited marketing resources (dollars and FTEs) are focused on growth and marketing initiatives that have the best potential for improving business performance and positioning health systems for long-term success.  Parts 2 and 3 of this series described the first two primary 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 will be required to support effective growth and marketing management?”  In other words, what are the capabilities, technologies, skill sets, business partners, processes and tools necessary for the marketing team to execute marketing strategy and achieve growth objectives?  Building a high- performing marketing team and the systems to support that team are strategy-critical investments that will generate far greater 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, strategy and critical thinking skills?  Can they mobilize and align clinical, administrative and other functions to effect marketing strategy?   Are they fluent in new 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 strategies.  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 here 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 management.
  • 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.  One of the more difficult tasks for marketers is to eliminate activities and tasks 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.


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 growth initiatives.  

Both top-down and bottom-up approaches to marketing resource allocation are necessary; top down for strategic marketing planning across a health system’s portfolio of service lines and market initiatives – and bottom up to develop specific marketing plans and budgets within each priority program. 

Most important, perhaps, is to use this data-informed approach to gain organizational commitment to investment decisions and staying on strategy. 

Read the series:

The Healthcare Marketer’s Dilemma? Too Many Projects. Too Few Resources.

Part 2 of Prioritizing Marketing Resources Key to Return on Investment Goals.

How do healthcare marketing executives allocate marketing resources? 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.


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 of by lines of business (e.g., inpatient, ambulatory, physician services, etc.), service lines (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, the health system allocates 60% of marketing resource investments to tier one projects and the remaining 40% is 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?

Prioritizing Marketing Resources Key to Achieving Return on Investment Goals – Part 1

Someone once asked me what the difference is 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 planning and budgeting for a new fiscal year.

For those healthcare marketers managing to a calendar-based fiscal year, the mad rush of the holidays is compounded by winding down current year activities and preparations to launch newly-funded projects.  Hunkered down with marketing teams, plans and spreadsheets, most CMOs are trying to conjure up ways to achieve more with less.  Unfortunately, too many times we end up spreading scarce dollars over too many projects.

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 those 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; while it’s always difficult to move people out, 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