Historically, marketing’s role in healthcare fiscal planning is reactive – the team gets a budget and proposed goals from upper management, and then must devise a tactical approach to meet those goals. The marketing team rarely has a role in proposing goals based on voice of the customer and consumer market behaviors.
But the industry is changing. A data and consumer-driven marketing strategy plays a critical role when hospitals are competing on price and convenience against brands like CVS, Walgreens and other disruptive players.
Instead of sitting idly by during FY planning, marketers must take a more proactive approach. In the months leading up to the actual planning meeting, the team can establish leadership buy-in, identify high-value market opportunities, and start working on end-to-end consumer marketing strategies and not just a tactical hodgepodge of paid and earned media.
Imagine this: Your team comes to the table with a data-driven campaign strategy that supports top-level organizational goals, including forecasted results and the budget required to execute. That sets the stage for a much different conversation. Quantifying the impact of marketing on your organizations’ bottom line establishes marketing as a revenue driver instead of a cost center.
Let’s dive into the required steps to improve the FY marketing planning process:
1. Identify Key Stakeholders
First, marketers must identify key stakeholders within C-suite management and understand their enterprise objectives in specific, quantifiable terms. It’s best to begin this interviewing process three months before the beginning of your organization’s fiscal year.
Below is a list of potential enterprise stakeholders and questions marketers should ask to identify their objectives:
- Chief Executive Officer – What long term goals are a priority for execution over the fiscal year?
- Chief Financial Officer – What are our yearly margin and revenue goals?
- Chief Operations Officer – What are our yearly volume and growth goals? In which markets?
- Chief Marketing Officer – What are our brand positioning and marketing goals?
Take the executive team’s yearly goals and create a shortlist of objectives that marketing can directly support. For example, say the COO’s goal is to improve surgical volume by 2% during the fiscal year. Marketing can support this specific objective with precisely targeted campaigns.
By identifying key stakeholders and understanding their fiscal year goals before planning is fully underway, marketing teams can begin to forecast how much budget they will need to produce quantifiable results.
2. Determine Opportunities for Service Line Growth
With key stakeholders’ goals in mind, take advantage of a business intelligence solution to identify top service line opportunities in a defined geography (including one or many counties, a radius around a zip, and across state lines).
Think back to the COO’s goal to improve surgical volume by 2%. Dig into market analysis and service line activity to determine which surgical service lines and procedures present the greatest opportunity for growth – for instance, a clear market increase in households with an average age of 55+ presents a ripe opportunity for orthopedic surgery. Or another example, a market that sees an increase in cardiac surgeon referrals may signal an opportunity for a primary care practice location.
Here are a few guiding questions to help you meet market demand with opportunities:
- Where is the organization’s market share currently trending, by service line and by region?
- Which service lines within our organization are growing – or shrinking?
- In which markets are we gaining or losing physician opportunities?
- What are some prevalent consumer behavior trends that may impact need for services? IE – Preference for urgent care over ER.
The outcome of this exercise will be a long list of areas where opportunity exists in your market environment, which should complement the shortlist of goals previously outlined by executives.
Ultimately, analyzing these questions will help your team understand market dynamics external to your organization, such as newly instated competitors, and further refine campaign strategy.
3. Understand Your Current Clinical Capacity
At this stage, marketing teams must resolve known market demands with their existing clinical capacity. On its most basic level, this means ensuring your organization can fulfill basic supply and demand requirements – for instance, using the example from above, do your orthopedic surgeons have the practice capacity to handle an incremental 50 new patients a week?
The value of understanding clinical capacity cannot be understated – if there is not enough capacity in your organization, the demand that your marketing campaigns generate will become an opportunity for your competitors. Historically, we’ve seen clients have to shut down nearly 1 in 6 campaigns due to capacity and throughput issues. Not only was that wasted marketing investment, but those patients likely went to a competition provider.
To identify areas of low capacity before launching your marketing campaign, consider becoming a “secret shopper.” Call in to the officers of each service line and ask to make an appointment. If the next available appointment is in eight weeks, that service line might be over capacity or have other operational issues that should be discussed. From there, it’s important that marketing teams take accountability, and work with management as well as chairs of the service line to solve this problem.
Once a campaign is in flight, a decline in conversion rate is another indicator that you are potentially suffering from capacity issues – you’ll waste precious marketing dollars focusing on service lines with decreasing conversion rates.
At this point, capacity concerns may disqualify some potential opportunities identified earlier. While fixing these capacity challenges is possible, it requires a concerted effort that may take more than one fiscal year. Rather than welcoming new patients in service lines that lack capacity, focus on the more attainable objectives that have not yet been disqualified.
Or, pick your battle and leverage data to drive operational improvements. If a market opportunity is so significant, say in orthopedics, escalate the need for improvement orthopedic practice input to your most senior leadership. Take ownership of marketing’s ability to drive revenue by forcing internal change.
Here’s a recent example of how one of our clients forced the issue, and partnered with Operations, to create a Win-Win. In fact, if you were at the Healthcare Marketing & Physician Strategy Summit this year, Nancy Durant shared this in her keynote. I like this story because it’s a powerful example of how a precision marketing approach has fundamentally changed the conversation within the organization:
The Marketing Director noticed that lead-to-patient conversion rates for their orthopedic campaign had dropped 10% from one quarter to the next.
Armed with actionable data and knowing that the market demand for orthopedics was high, the Marketing Director called a meeting with the Chief of Orthopedics to hold him accountable for this decline.
After discussing the data to identify the source of reduced throughput, they discovered operating room hours for two total joint replacement surgeons had recently been reduced to make room for a new cardiac surgeon. The Marketing Director and Chief of Orthopedics, in partnership, elevated this issue to the C-suite who promptly reallocated OR time and reduced the downstream operational issue that was proactively flagged by marketing.
4. Get to Know Your Target Audience
Before presenting your findings to the executive team and securing a budget, it’s important to understand what drives consumers to make decisions about their health. To do this, we must understand the two main entry points of the patient’s journey: Referral-driven, and self-directed.
- Referral-Driven – A serious diagnosis will encourage patients to rely on their physician’s expertise to refer them to a quality specialist. To effectively execute referral-driven campaigns, create a marketing campaign that focuses on the physicians.
Give physicians sales sheets and make an effort to introduce them to your specialists. If physicians become informed on the high-quality, specialized services your health center offers, they will be more likely to become evangelists for your marketing campaign.
- Self-Directed – On the other hand, self-directed decision making refers to patient-side, consumer-driven traffic. For example, a patient may occasionally suffer from joint pain that is typically tolerable, but after a long bike ride their pain became more severe. As a result, the patient seeks out a doctor with joint pain expertise on their own accord.
To target these patients, create an acquisition campaign that is specific to that service line. In the campaign, highlight the service line’s offerings while supporting a value proposition around cost, convenience, or clinical quality
Another aspect to consider in the campaign planning process is how a patient’s digital fluency influences decision making. Before budgeting spend for digital marketing initiatives, determine how many of these patients are online, how they find your health center via search, and which devices they used. Optimize your search and web strategy based on these insights.
This deep understanding of your target audience will extend to the messaging you use. Understand what they want from your health center – not what your health center wants from them. Leveraging a healthcare CRM will help your organization determine exactly what motivates patients to make an appointment. Remember the 4 Ps of marketing? Product, price, place, promotion. Knowing when to differentiate on quality versus convenience, and for which service lines, is critical to building an effective campaign messaging strategy. These insights, powered by consumer and physician data, are essential during fiscal year planning.
5. Project Your Performance
Once your marketing team has a sound campaign roadmap in place, reverse engineer the quantifiable goals set by the stakeholders in step one. We recommend using your own internal benchmarks contained with HCRM for the most accurate forecast, and the Evariant Campaign Center team can also provide benchmarks based on the thousands of campaigns we’ve run for clients.
Here are critical metrics to consider when projecting marketing’s impact on the bottom line of the organization:
- Overall investment $
- Leads / Cost Per Lead
- Patients Acquired / Cost Per Acquisition
- Return / ROI
This allows you to clearly communicate the business impact of your campaign roadmap on the bottom line. Now, rather than being a recipient of your annual budget you are using market data to recommend the resources necessary to drive bottom line growth. This fundamentally changes marketing’s position at the strategy decision making table.
Creating a proactive strategy for fiscal year planning has a significant impact on your healthcare organization’s bottom line. Imagine a future where marketing teams can directly relate their budget to how much revenue was generated for the organization. They can also attribute exactly which line item programs and campaigns lead to that growth.
While every healthcare marketing team can attain this reality, the primary limiting factor is a lack of structure around what a proactive process really looks like.
Once the proactive process is better understood and properly executed, marketing justifies their seat at the fiscal year planning table.