This post is the first in a four-part series that explains why hospitals need to transition from traditional marketing to digital marketing strategies. This post provides background on why the transition is necessary and what it means to you as a hospital executive. Be sure to check out part two, and three and four for more information on why hospital marketers must transition from traditional marketing campaigns and embrace digital marketing.
Traditional Marketing vs. Digital Marketing
In order to understand why you, as a hospital executive, need to consider digital marketing, let’s agree on definitions.
- Traditional Marketing: A series of off-line marketing campaigns (1) that typically are not integrated, (2) can be effective in raising brand awareness, and (3) the success of which are difficult or impossible to quantifiably measure.
- Digital Marketing: A marketing strategy that integrates highly segmented, targeted online and offline campaigns and tactics that are (1) designed to communicate, nurture, and encourage interaction with patients and consumers over the patient’s lifecycle, and (2) the success of which can be measured in terms of specific metrics, that are aligned with key performance indicators, and/or the return on marketing investment (ROMI).
Marketers have used “traditional marketing” campaigns for decades in one form or another and unfortunately, many hospital marketers are still clinging to these “old traditions.”
Over the years, traditional marketing worked because the fee-for-service mentality prevailed and hospitals had no problem getting patients. Premiums and consumer co-pays were significantly less, so consumers didn’t think twice about price, didn’t shop around for services, and insurance companies readily paid.
But, as healthcare costs increased over the past decade, insurance premiums and co-pays also increased. At the same time the Affordable Care Act provides incentives to keep populations healthy, instead of waiting until they get sick and need hospital services.
All of this resulted in creating a more cost-conscious consumer.
Today, consumers shop around for healthcare services and delay or cancel elective procedures. Furthermore, the population in general is healthier and living longer. While there is still a high percentage of the population with chronic illnesses, younger consumers typically don’t seek out hospital services unless they are sick.
For hospitals, fewer patients and fewer procedures means less revenue. Suddenly, hospitals need to seek out and motivate consumers to use their services.
Now, hospitals are in competition with and losing money to other hospitals and patient care facilities. They are also losing money because the consumer simply decides not to seek care at all due to costs. A 2013 article published in Becker’s Hospital Review puts it nicely.
“Hospitals are dealing with consumers who are remarkably smart, demanding transparency and two-way communication from their healthcare providers.”
Why Digital Marketing?
With the decline in hospital revenues, there have been many hospital consolidations and closures — hospital chains are buying out independent hospitals and community hospitals have closed. Academic hospitals that always thought their brand and reputation would help them stand out and get business are now discovering that they are not getting the traffic they used to, even in their world-renown specialties.
All of this now puts pressure on hospital marketing departments to find more patients and entice existing patients to come back for more services. Enter digital marketing.
Healthcare digital marketing not only allows marketers to target specific patient sets, but also helps nurture relationships with existing patients. The result? Better campaigns, better ROMI, and increased patient engagement.
Like marketing organizations in other industries, hospital executives are now holding their marketing departments accountable for metrics other than the number of responses to a direct mail campaign. The good news? Digital marketing tactics can give healthcare marketers those metrics they are now expected to have.
The bottom line is that in the past, hospitals did not need to find patients the way other industries needed to find customers. Hence, the marketing departments in many hospitals did not need to do anything particularly targeted.
However, this has changed; hospitals are now competing for patients based on both costs and quality of care. With the healthcare ecosystem changing, hospital Chief Marketing Officers must stop clinging to the old “traditions,” and move to digital marketing.