During a recent webinar, Gary Druckenmiller, VP of Client Solutions at Evariant, discussed how healthcare marketers could benefit from measuring and optimizing the cost per acquisition (CPA) of their marketing campaigns. CPA is an often-overlooked metric that can be used to drive the most qualified leads, as well as predict the long-term ROMI in healthcare marketing campaigns.
Due to an evolving healthcare landscape and shrinking budgets, marketers need to start running leaner and neater campaigns by lowering their CPA and ultimately making their campaigns more cost-effective. Marketers can see lower CPAs after constant, daily optimization, made possible with the help of a CRM system to keep all campaign data and metrics in one place.
Let’s take a look at some key takeaways and questions asked during the webinar:
What is the definition of a conversion used in the CPA ratio? Are these conversions new patients, or are they considered only new campaign members?
They are considered new campaign members, or leads. Marketers need to be looking at the cost to acquire, not the cost to convert clinically – those are two different metrics. The idea is to use CPA as an early indicator of long-term ROI success.
What types of campaigns yield the lowest CPA?
There is no particular type of campaign that consistency yields a low CPA. It comes down to optimization efforts, real-time data management, the rear-view mirror effect, data insight strategy, and constant monitoring and management of behavioral data coming in. In essence, marketers need to be able to adjust their campaigns on the fly.
What’s the correlation between CPA and ROI?
CPA and ROI are linked in two ways. The first is on a micro scale, where CPA can be used as an early indicator to demonstrate long-term ROI success. This means that if optimization is done correctly, conversions will increase when CPA lowers. This may seem counterintuitive, but the CPA metric is indicative of how efficient a campaign is. When conversions increase and CPAs decrease, that means the hospital revenue is increasing.
CPA is also related to ROI on a macro scale. At the end of a campaign, when ROI is showing itself over time in the form of clinical acquisition, it’s important to look back at CPAs to see how accurate long-term ROI predictions were.
You mentioned CPA is calculated off of web leads AND call center calls. How do you track conversions from calls?
Marketers need to have a tracking mechanism for a CRM system that ties call center calls back to original digital marketing catalysts. By generating trackable 1-800 numbers for consumers to call in to, institutions can direct the information into a CRM to track call center activity just like ad, display, and social activity is tracked. Call centers are then thought of as a trackable channel and the initial point of contact can be traced back to the marketing catalyst.
When you lower your CPA, can you start lowering your spend? At what point should you do that?
Healthcare marketers who see the CPA start to drop should absolutely not lower spend. Lowering CPA should never be viewed as a way to save money, but instead looked at as a reinvestment opportunity. The goal is to create campaigns that can operate at a lower cost so that extra money can be reinvested into other campaigns or marketing tactics. Healthcare marketers shouldn’t be going over budget – but they shouldn’t be under-budget, either.
Do you have best practices for how to split spend across your channels?
The optimized split between digital and offline marketing would be around 70 percent and 30 percent, respectively. Digital marketing tactics like search, email, mobile, social, and direct mail all can have value for healthcare systems and the amount they’re utilized will vary depending on what’s effective for the system. For individual offline channels, digital print ads should be 10 percent, TV and radio should be 10 percent, and remaining tactics should be 10 percent of spend.
Why is paid search the most optimized channel?
In healthcare, 95 percent of people start with a search. If they or a loved one has been diagnosed with something, they respond by searching for more information. This is why search engines are at the top of the marketing food chain. The healthcare audience is a search audience. Its significance means healthcare marketers need to optimize constantly.
Can you give examples of what you meant by “multi-level optimization”?
Multi-level optimization is exposing every tactical level of change that could be deployed. These tactical levels include micro-site landing page visits, email opens, and click-through, to name a few. There are so many areas of campaigns marketers can optimize, and all of them need to be looked at. Most agencies fail because they aren’t optimizing all of the metrics available to them.
The campaign results are often indicative of the work that’s put in. Marketers should have a “no stone left un-turned” approach to campaign management to make sure that every conceivable element is looked at closely on a daily basis. This will ensure that the campaign is in harmony, and all of the working parts are moving together.
How are remarketing and retargeting different?
Retargeting is a subset of remarketing. If remarketing is considered the broad term that covers any re-engagement activity, retargeting is the actual technical action made.
What larger campaign changes are required to lower CPA?
Every single aspect of a campaign needs to be examined in order to lower CPA. Marketers can’t focus on only one or two pieces and hope that those alone will optimize the campaign. All SEM, display, social, and email metrics that go through the CRM engine should be easily accessible for campaign managers so they can optimize more efficiently and readily. If marketers aren’t optimizing all elements of a campaign, CPAs will never be as low and conversions will never be as high as they could be.
How much optimization should happen daily / weekly?
Optimization is an hour-to-hour, daily event. It’s not a weekly or monthly event. Optimization should happen multiple times a day.
What is a “keyword retreat”?
A keyword retreat is an exercise performed by Evariant where media planners and media specialists will visit the client on-site and break down their campaign media program and determine the changes that could be made for optimization.
What do you say to the executive team or boss who still feels leads are an intermediary step? What they really care about are patients and downstream revenue.
They are absolutely correct that leads are an intermediary step, but the problem is that there isn’t a “buy now” button in healthcare. There is no instantaneous ROI, because the decision process can take months. That’s why it’s important to track the entry point at which patients come in contact with a health system.
A CRM system can track ROMI in healthcare within a specific timeframe and service line to attribute clinically converting patients to the initial point of contact (whether it was search, an email, or an ad), even if it happened months previously. CPA is a way to show healthcare leaders that costs are lowering and leads are increasing, which is indicative of the potential for clinical conversions in the near future.
Healthcare marketers optimizing campaigns with the goal of lowering CPAs and increasing conversions can take advantage of a few different tactics. First, they should pause all unprofitable campaigns that have generated little to no conversions in the last three months to optimize and determine whether they are worth running again. Next, they need to run remarketing campaigns to target patients and consumers who have abandoned the site and lead to a conversion.
Marketers can also start growing email marketing lists to decrease dependence on paid advertisements and reduce ad spend. Lastly, they should find and focus on optimizing the 20 percent of business that generates 80 percent of the results. These practices can help to lower CPAs and increase the ROI of healthcare marketing campaigns.