Tag Archives: marketing investments

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

Posted on January 23, 2014 | 3 comments

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. 

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Five essential moves to transform healthcare marketing

Posted on April 1, 2013 | Leave a comment

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:

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When it Comes to Service Line Marketing, it Takes a Village.

Posted on August 22, 2012 | Leave a comment

Healthcare marketers know all too well that when someone from operations shows up to talk about marketing clinical service lines, they are usually asking for service line advertising.  The narrow view of service line marketing as simply promotions sub-optimizes marketing performance and wastes money.  Every marketer knows the agony of launching a promotions campaign only to learn that some aspect of access, capacity, physician loyalty, etc. is out of whack.

A few years ago, I met with a hospital that had launched an aggressive advertising campaign for their orthopedic service line.  As campaigns go, it was pretty effective in making the phone ring.  The problem was the hospital’s physicians had excessive wait time for appointments.  The one physician with capacity was taking procedures to another hospital.  And no one thought to ask the OR about capacity.  The surgical services director insisted that no additional time slots existed or could be made available for new volumes.

Both service line administrators and marketing executives should expect more of their marketing investments.

The bottom line is this:  the purpose of marketing is profitable revenue generation.  And this doesn’t happen through promotions alone.  Especially when other parts of the marketing mix (e.g., access, capacity, customer experience, product design, clinical quality, pricing, physician relationships) operate outside the realm of the marketing department’s influence.  Achieving service line growth targets, improving financial performance and increasing customer loyalty requires a purposeful, comprehensive and cross-functional approach to service line marketing.

Where to start?  Pull together a cross-functional strategy team that includes service line operations and marketing staff, along with representatives of other core clinical or business functions relevant to that service line, such as the emergency department, nursing, OR, diagnostic imaging, physician services, managed care contracting, IT, or supply chain.  Develop a strategic marketing plan that addresses all aspects of the marketing mix.  With a comprehensive and focused strategy in place, marketing tactics and investments – including promotions – will be much better aligned to achieve its objectives.

Here are 12 critical questions to guide the service line marketing discussion:

  1. Do we understand the unique, competitive position we currently hold or desire to hold for this service line and how to strengthen points of differentiation?
  2. Have we quantified the opportunity for volume and revenue growth, and do we have the appropriate mix, number of and relationships with physician specialists to achieve our volume goals?
  3. Have we identified other key referral and access points for this service line and do we have the means and capacity to generate volume through those channels (e.g., emergency department, urgent care, employer sites, on-line appointment scheduling, etc.)?
  4. Do we know which population/disease/needs-based segments offer the highest potential for profitable growth for this service line, and does our plan address both the clinical programming and promotions strategies needed to attract and serve those segments?
  5. Do we have strategies and tactics in place to optimize our position with employers and improve contracting leverage with commercial payors?
  6. Are screening, education and outreach events targeting at risk populations, and do we have mechanisms in place to connect high risk participants with providers and services?
  7. Are promotional strategies and tactics (e.g., sales, events, advertising, digital and social media, etc.) designed to strengthen the service line brand, stimulate demand and influence consumers to take action?  Are we optimized for search?
  8. Are marketing resources and investments prioritized to strategies that have the greatest potential to impact volume and financial goals, and what non-revenue generating activities need to be discontinued, minimized or re-assigned?
  9. Do we have the marketing management capabilities and systems (e.g., structure, skills and tools such as call centers, CRM/PRM, appointment scheduling, etc.) to drive customer acquisition and retention by generating demand, capturing and converting referrals into appointments and procedures?
  10. Is operations a willing partner in the growth agenda, and do our operating processes, procedures, and systems support patient acquisition and retention; e.g., customer service orientation, timely and convenient appointments, care coordination, quality and safety outcomes, patient satisfaction, etc.?
  11. Have we identified core marketing performance metrics, and put in place methods to monitor, track and report outcomes?
  12. How will we communicate the plan to key internal constituents, gain agreement for the focus and investments, and create co-accountability (marketing, clinical, administrative) for results?

When operations and marketing plan together and share accountability for delivering on revenue and profit targets, marketing magic can happen.  It takes a marketing village, not just the marketing department, to generate success.

 

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Investing in the Marketing Management Infrastructure

Posted on December 21, 2011 | Leave a comment

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.

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 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:

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

Posted on November 29, 2011 | 2 comments

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.

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 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?

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

Posted on November 26, 2011 | 3 comments

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. 

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