Warning! <ul><li>THIS PRESENTATION MAY CAUSE MENTAL CONSTERNATION AND PROVOKE UNBRIDLED “OUT OF BOX” THINKING. DO NOT ATTEND THIS PRESENTATION IF YOU ARE AVERSE TO UNDERTAKING A RADICAL TRANSFORMATION IN YOUR VIEW OF HOSPITAL MARKETING! </li></ul>
Why I Wrote “The Books” <ul><li>The Complete Guide To Hospital Marketing and Physician Entrepreneurs: Marketing Toolkit are based upon my experience of over 25 years as both a Chief Strategy and Marketing Executive and as a national health care marketing consultant </li></ul><ul><ul><li>Based on dozens of interviews with CEOs, C-suiters, marketing VPs, physician leaders, group practice administrators </li></ul></ul><ul><ul><li>Wanted to help people who are new to health marketing, but also those who are already in it </li></ul></ul><ul><ul><li>Aim was to provide “boulders of wisdom”: a decided emphasis on practice over theory </li></ul></ul><ul><ul><li>Currently writing 2 nd Edition of CGHM </li></ul></ul>
Workshops <ul><ul><li>Branding From The Inside </li></ul></ul><ul><li>Marketing Information and Analysis </li></ul><ul><li>Marketing Planning </li></ul><ul><li>Marketing Management </li></ul><ul><li>Marketing Communications </li></ul><ul><li>Marketing and Business Development </li></ul><ul><li>Marketing and Physicians </li></ul><ul><li>Managing Your Marketing Career </li></ul><ul><li>Full-day: all 7 modules </li></ul><ul><li>Half-day: two modules in- depth </li></ul>
Topics We Will Cover <ul><li>Perceptions Of Marketing From Within </li></ul><ul><li>Traditional ROI Measurement Methods And Why They Are Insufficient For Determining Marketing Effectiveness </li></ul><ul><li>Going On The Offensive: Demonstrating The Value Of Marketing </li></ul>
In Many Organizations, Hospital Marketing Struggles To Prove Its Value CMO
Observation #1: In many health systems, marketers have suffered from narrow and outdated stereotypes, some which have been self-inflicted.
Low Level Of Confidence In Marketing <ul><li>Only 8% of CEOs rate their marketing as very strong. </li></ul><ul><li>Only 27% of marketing officers rate their organization’s marketing as very strong. </li></ul><ul><li>51% of marketing officers say their work is highly valued by their CEO, whereas 59% of CEOs hold a neutral or negative view of their organization’s marketing efforts. </li></ul><ul><li>25% of CEOs say their chief marketing officer is a member of the senior executive team </li></ul>HCPRO/HEALTHLEADERS 2009 LEADERSHIP SURVEY Observations
How Others In Their Healthcare Organizations Rate Their Marketing Programs <ul><li>Q: How valued are the marketing department’s efforts to the following internal stakeholders? </li></ul><ul><li>Percent “Slightly Valued” or “Not Valued”: </li></ul><ul><li>Physicians: 38.6 </li></ul><ul><li>Staff: 43.8 </li></ul><ul><li>COO: 19.8 </li></ul><ul><li>CFO: 47.2 </li></ul><ul><li>Board Of Directors: 26.5 </li></ul><ul><li>Organizati0n-Wide: 34.8 </li></ul>HCPRO/HEALTHLEADERS 2009 LEADERSHIP SURVEY Observations
Unrealistic Expectations? <ul><li>Health leadership is anxious for results –often expecting returns in as little as 3 months! Other industries take a longer perspective (e.g. telecommunications companies look at five year returns) </li></ul>
Traditional ROI Formula <ul><li>Net Incremental Revenue-Direct Costs-Marketing Expenses </li></ul><ul><li>Marketing Expenses </li></ul><ul><li>Key Questions: </li></ul><ul><ul><li>Is marketing an “investment” or an “indispensible operating expense”? </li></ul></ul><ul><ul><li>The Answer Is: Both </li></ul></ul><ul><ul><li>What constitutes an appropriate level of investment? </li></ul></ul><ul><ul><li>Should ROI denominator be operational and marketing expenses? </li></ul></ul><ul><ul><li>For how long do we keep attributing results to a campaign? </li></ul></ul><ul><ul><li>Are we following through to see if the business we generate from a marketing effort is being well-served? </li></ul></ul>
I N V E S T M E N T RETURN Image Campaign Service Line Campaign Single Procedure Promotion $ $ The most effective application of the traditional ROI measure is to focus on specific high revenue to expense procedures that can be tracked to specific physicians
Midwest Hospital’s Promotional Campaign: Is This An Accurate ROI Calculation? <ul><li>Revenue Projections </li></ul><ul><li>Physician Office Visits (employed Drs.) $ 154,392 </li></ul><ul><li>Associated Stream-- Hospital -Related $ 898,054 </li></ul><ul><li>Total Revenue $ 1,052,446 </li></ul><ul><li>Investment </li></ul><ul><li>Start-up & Marketing ($ 20,000) </li></ul><ul><li>Fixed Costs ($66,569) </li></ul><ul><li>Investment Total ($86,596) </li></ul><ul><li>ROI: $1,052,446 -- $86,596 / $86,596 = 11.15 </li></ul>
Observation #2: <ul><li>Healthcare is a moving target: today’s best practice is tomorrow’s runner up </li></ul><ul><li>Benchmarking can institutionalize current ways of doing things and stifle new or alternative approaches to measuring marketing’s value </li></ul><ul><li>Over time, it becomes increasingly difficult to show new incremental business from a campaign </li></ul><ul><li>MARKETING is a team effort, not a department’s responsibility </li></ul>Relying Solely On Traditional Measures of Marketing Success Can Be Dangerous To Your Long-Term Marketing Health!
Observation #3: Then why would you staff or budget for your marketing program according to the median in an association survey? Would you buy a medium size pair of pants because it’s the most popular size in the store? Or would you buy the pair that fits you best? Relying On “Norms” and Averages Can Be Dangerous To Your Long-Term Marketing Health!
Provider Interaction: Breast Care Clinic Hospital Interaction: Surgery, Chemo, Radiation Therapy Follow-up and Self-Management <ul><li>* Marketing Interaction: </li></ul><ul><li>Research </li></ul><ul><li>Service Planning </li></ul><ul><li>Promotion </li></ul><ul><li>Operations Consulting and Customer Fulfillment </li></ul>*All of these are inputs to ROI Internet/Web sites Community Resources Provider-sponsored prevention/ educational programs Employer Site and Community-Based Screenings
Observation #4: <ul><li>Most of our marketing efforts have been focused on looking for current level solutions. Can we really attribute changes in market share (which take over a year to measure and can be affected by several variables) to a specific marketing promotion? If so, what if market share drops? Do we then say it is because of a lousy marketing campaign? Not! </li></ul><ul><li>Are there better measures where we can tangibly demonstrate improvements to the bottom line as a direct result of a marketing department initiative? </li></ul><ul><li>And if there aren’t, can we create them, and who else should be accountable? </li></ul>Do We Need A New Business Model And Philosophy?
<ul><li>“ It can be argued that one of the biggest reasons that companies fail to overcome their competition is their leadership’s inability to think in a way that enables execution at the next level.” </li></ul><ul><ul><li>--Rand Stagen, “Next-Level Leadership” </li></ul></ul><ul><li>“ You can’t solve a problem with the same level of thinking that created the problem” </li></ul><ul><ul><li>--Albert Einstein </li></ul></ul>
TRADITIONAL MEASURES OF MARKETING PERFORMANCE Build our awareness and preference Increase inpatient market shares Create positive media coverage Sustain and increase physician referrals Improve customer satisfaction
NEXT LEVEL MEASURES OF MARKETING PERFORMANCE Attraction and retention of strong performers Improvements in physician/provider business relationships Improvements in our community’s health status Innovations in customer service and in the way we price, deliver, and engage customers in “healthing themselves” Others:
CURRENT LEVEL THINKING NEXT LEVEL THINKING Focus On Winning Market Share Focus On Changing The Market Focus On Promoting Services Focus On Innovating Processes: “What Can We Do Better?” Focus On Short Term Results Focus On Long-Term and Sustained Results Focus On Post-service surveys Focus On Making The Right Experience in Real Time Offer Product >Market It Product Occurs From Re-Defining Practices, Based on Customers’ Value Assessment Linear Solutions Integrated Solutions
Case Study: Apple I-Pod and SONY Walkman* Photos courtesy of Apple, Inc. and SONY, Inc.
CURRENT LEVEL THINKING APPROACH RESULT SONY “command and control” Own its own music, compete with other music labels Precipitous drop in sales revenues Missed a major opportunity to connect with customers NEXT LEVEL THINKING APPROACH RESULT APPLE “diffused ownership” Develop I Tunes Store where consumer picks and chooses music from several labels. Make store compatible with all MP3 players Huge success—a win/win for all of the music labels, APPLE, and consumers.
So What Can Marketers Do To Strengthen Perceptions Of Their Value To Their Employers?
Five Steps To Bolster Value <ul><li>Step One: Re-define your role as the Chief Business Coach (CBC). Be a change agent by educating your leadership on the difference between the marketing department and MARKETING </li></ul><ul><li>Step Two: Start associating all of your activities with outcomes that go beyond short-term “fill a bed” thinking. Show how what you do leads to new investments in clinical technology, enhancements in the community’s health status, innovation in our products and services, and to recruitment of the highest level performers </li></ul><ul><li>Step Three: Forget comparing yourself to industry norms—they won’t get you results. All that matters is your impact on your customers and your community. </li></ul><ul><li>Step Four: Stop wasting $ on traditional research and self-promotional activities such as annual community perceptions surveys. These rarely make a difference in decisions to improve products and services. Focus more on helping to make your internal employees more engaged and on making provider and customer processes more effective. </li></ul><ul><li>Step Five: Bolster your budget for physician relationship management. If your budget is limited, sacrifice advertising and non-strategic sponsorships and put that money into building physician loyalty. </li></ul>
<ul><li>“ To exist is to change </li></ul><ul><li>To change is to mature </li></ul><ul><li>To mature is to go on creating oneself endlessly” </li></ul><ul><ul><li>--Henri Bergson </li></ul></ul>
PB H ealthcare B usiness S olutions LLC Strategy, Marketing, Management for Health Care SM 262-408-5549 www.pbhealthbiz.com
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