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IF YOUR COMPANY IS LIKE MOST ORGANIZATIONS,
it will begin annual planning and budget preparation within weeks. No doubt, you’re under increased pressure to justify your activities. Marketers are now being judged by the same criteria as other business unit managers and executives. You are held accountable for spending, head count and contribution.
Unfortunately, marketing is also one of those departments that always seems to be asked to do more with less — less staff, less allocation, less everything . . . except results. Here’s what you need to know before you begin. What are the key factors that drive profitability for your company? How do your marketing goals support these overall business objectives? Are there measurement metrics in place that help to demonstrate ROI?
By aligning your plan to support these high-level goals, your marketing plan has a better chance of surviving the budget process intact. It’s all about spending what you are allocated wisely. Here
are three steps to help you make every marketing dollar count.
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One: Focus on — and track — leading indicators of success
While marketing activities may not be able to influence some cost drivers, they can have an impact on others. For a managed care organization (MCO), it might be member education that is based on early intervention tactics, or targeting acquisition campaigns based on analysis of member characteristics and geographic location. For a hospital, this may mean supporting patient satisfaction efforts — which can influence a consumer’s choice of facilities — or promoting profit centers, such as laboratory or occupational, speech and physical therapy.
Measuring marketing’s impact is essential too. A call center and Web site are vital components to tracking leads. The primary piece of information needed is where the caller or Web visitor heard about your organization, or the specific item that generated the inquiry, such as a hospital’s physician referral line, an MCO’s health plan or pharmaceutical company’s brand product. Once the consumer’s information is collected and a period of time (usually 12-18 months) has elapsed, this information can be matched to an actual purchase or usage data. To determine ROI, you’ll also need to factor in the cost of your marketing effort, the operating cost of the call center and/or Web site, and costs associated with the consumer’s use of the product or service.
The results can be quite compelling. Solucient conducted a four-year study that found on average, 20 percent of a hospital’s customers will phone the call center in any given year — and that one in four callers contacting the call center will have an inpatient discharge or outpatient visit within the 12 months following his or her call. The average call-center caller is estimated to generate $13,848 in hospital charges within 12 months after contacting the call center versus $5,524 generated by hospital patients overall. |
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 Two: Target your message,
as well as your audience
Sure, niche marketing may cost a little more on the front end, but has been shown to generate greater results, thereby increasing profitability. From the data you have available, get a feel for what criteria you will use to identify a “best customer” profile. Is it someone who utilizes services of your hospital’s profit centers? Or a member with an individual insurance product that has low utilization of services but high satisfaction?
From there, you might benefit from a lifestyle segmentation analysis. It can help you better target prospects with similar profiles and create more relevant communications to existing customers. The level of information provided paints a more detailed picture of your most valuable segments. Your challenge is to make all this data actionable. Even if all you have are the basics, such as gender, age and ethnicity, you can develop compelling content. For example, you know that women make the majority of healthcare decisions for themselves and their families. But have you consciously done anything differently with your marketing as a result? Experts say women don’t just want to see themselves in the marketing; they want it to address their families too. Women value relationships and personal contacts, whereas men place a greater importance on product attributes. Women are also motivated by ease of use and by having all the information they need to make an informed decision. |
| There’s no sense continuing to spend money on acquisition only, when a large percentage of customers continue to fall out the bottom of your leaky bucket. |
| Another example is the fact that the U.S. Census shows the Hispanic population has grown by 13 percent in the past four years, increasing to 39.9 million. Hispanics are now the largest ethnic/minority group in the country. Are your marketing and education materials — both print and online — available in Spanish? Have you incorporated “cultural competency”? Doing so may actually help reduce costs because effective communication can improve overall care. |
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Three: Invest in compliance and retention
Your marketing plan should also have components that promote compliance and/or retention. There’s no sense continuing to spend money on acquisition only, when a large percentage of customers continue to fall out the bottom of your leaky bucket. Here, it’s essential to establish benchmarks so you can compare your future results against previous levels. You might track customer satisfaction, utilization of services, behavior and revenue.
Database marketing is an excellent tactic to employ that maximizes the investment you’ve made in collecting customer information. Your goal is to target the right person with the right message at the right time. Just as you focus efforts on “best customer” profiles, you should also examine those who represent a less-than-ideal profile. Disease management programs, and the patient education materials that support them, do just that. They encourage compliance to a treatment plan or therapy to improve the patient’s health and reduce long-term costs related to the condition. A recent study by Medco Health found that for diabetes patients, every additional dollar spent on medication saved $7 in medical costs. The medical cost savings were $5.10 for each additional dollar spent on medication for high cholesterol and $3.98 for patients with high blood pressure.
Need more evidence that compliance and retention can generate impressive results? The previously mentioned Solucient study found the retention rate of call-center callers was higher than noncallers — 70 percent over a three-year period compared to 46 percent. One reason may be that consumers who seek health information tend to be more engaged than the overall patient population. Clearly, these individuals represent potential long-term value to a company. Ensure your marketing plan includes elements that support this key business initiative. |
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| Jon Sumple is Senior Vice President of Client Development at First Marketing. He spends a lot of time asking clients “What’s missing in the marketplace today?” and simply listening to what they have to say. Jon can be reached at
jsumple@first-marketing.com.
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