I don’t know about you, but it’s more than a little scary when I occasionally am faced with the stark reality that I have been working as a strategist and marketer in the health care industry for more than two decades. It usually reminds me that regardless of the consistent and often breathtaking medical advances that have punctuated these past few decades, the core aspects of marketing health care services and measuring the success of those efforts have not changed nearly as much during the same time period.
That’s exactly the feeling I had six or seven months ago when a steady stream of new materials focused on measuring, documenting, and presenting the Return on Investment (ROI) from healthcare marketing came to my attention. More recently, few weeks have passed without a new book, article, Webinar, or “how-to” template aimed at helping health care marketers better understand, define and document the ROI of marketing “investments” and related Customer Relationship Management (CRM) activities.
Upon reviewing the descriptions for some of these ROI-oriented publications and presentations, I was suddenly back in 1985 again; direct marketing was the “new, new” thing because it provided detailed “performance metrics” regarding campaign response rates and actual ROI while also helping create new “institutional knowledge” of individual consumers. These “calls to action” were also expected to ultimately support stronger and deeper “one-to-one” relationships with respondents.
So why, more than 20 years after the widespread growth of “metrics-based” marketing, do many hospitals and health system executives seem to have a substantially increased need for detailed documentation of the ROI from marketing efforts? Today, few healthcare marketing executives have leadership that unilaterally supports increased (or sometimes even level) investment in branding, market differentiation, and relationship management. The reasons for the downward pressure on marketing budgets are myriad, and admittedly, many are beyond the control of marketing leadership, including: institutional challenges to maintaining margin, substantial increases in competing capital investments, high inpatient occupancy, and re-alignment of service line priorities. For example, at the expense of a little hyperbole, whenever health system leadership needs to decide between a new treatment modality and even a compelling investment in service line marketing, direct clinical investment options invariably prevail.
However, one challenge to marketing budgets in particular has been behaviorally “self-inflicted”: when marketing leadership waits to develop a robust and “leadership approved” methodology for documenting the ROI of marketing efforts until after your leadership has requested it. Because ROI is a “lagging” performance indicator, it is always too late to begin detailed performance measurement after leadership has asked for such data. Under such circumstances, expansion or even preservation of budgeted marketing resources is invariably an uphill battle.
So how should marketing executives respond to the increasing challenge of documenting the economic value of marketing and relationship management efforts? The reactive (but still necessary) approach is to document the return from every key marketing investment that can be quantified in a manner that has the full approval of your CFO. Remember, the correct formula for measuring ROI is “whatever your CFO says it is”. If this step has long since been completed, so much the better; if not, many good books and publications exist to help you through the process. Get started today.
The proactive approach requires taking a big step back from “push”-oriented marketing and database-driven customer intelligence gathering. It requires asking the question “How do we support the consumer and/or patient in their self-directed experience as they move over time through cycles of health maintenance, health issue research, health issue treatment, health recovery/improvement, and health issue maintenance?” Specifically, how can marketing leaders begin evolving into”experience” leaders within their organizations? If your immediate reaction is “that’s not my job”, then it’s time to revisit a few inexorable changes reshaping the expectations of consumers, patients, and the communities you serve:
The challenges facing healthcare marketers are not only external ones. For many hospitals and health systems, past efforts to develop a comprehensive view of the patient and his/her wants and needs have largely fallen short of objectives. Many organizations have spent years and in some cases tens of millions of dollars investing in patient “portals” extending from their Hospital Information System (HIS) vendors only to find that that developing these online portals based on an inpatient perspective was like trying to create a detailed “picture” of the patient and his/her needs based on the small percentage of the healthcare experience typically incurred in an inpatient setting. Putting it another way, efforts to understand and improve the “patient experience” have often been from an “inside…out” rather than an “outside…in” perspective. How can healthcare marketers help lead the substantial rethink required to improve and ultimately optimize the patient (and consumer) experience? Additionally, how can the learning laboratory of the Web enable this radical change?
Key Near-Term Opportunities to Consider
As I see it, marketing executives must consistently document the value of what they are doing for their organization in a manner that ensures continued relevance in an increasingly tough financial environment. However, if the focus is strictly on documenting the ROI of today’s priorities, the once common view of a strong marketing department as a strategic imperative will never be regained.
Document the financial return of every marketing relationship management effort. If your organization doesn’t already have a “CFO approved” and budget-tested methodology for documenting the return of marketing campaigns, Web investments, and CRM capabilities, get it in place as soon as possible and use it for everything you do. The specific methodologies used (e.g., NPV, IRR, payback period, percent return) and the parameters for documenting “value” (e.g., incremental vs. total volume, revenue vs. contribution margin, single episode of care vs. discounted lifetime value) are up to your leadership: use what they give you.
Begin to provide the foundation for an “end-to-end perspective” of hospital consumers/patients via the Web. While the traditional segmented model has marketing overseeing the Web experience of “consumers” and IT driving patient Web (or portal) development, this approach typically misses the ever-changing wants and needs of the consumer/patient. For example, “last years” gastric bypass patient may no longer need regular access to their EMR (the patient perspective), but still needs regular access to the online community that will support their ongoing quest for a healthy lifestyle, much as a consumer Web site does. Help lead the development of a lifecycle model of the consumer/patient that can be deployed, tested, and refined on the Web. Typically 80-90% of the offerings on a leading edge consumer Web site are important to patients too.
Exploit the role that user-defined “experience” plays in consumer/patient perspectives of satisfaction and quality. While the development of and consensus-building around a lifecycle-oriented experience model may take time, creating high value additions to your external Web can occur much more quickly. Move past any lingering concerns about controlling the marketing message (those days are numbered) and lead the development of the Web features most in demand by both consumers and patients online: patient blogs about their experience with a specific condition or disease, condition/disease-specific online support groups, rich media information regarding condition-specific breaking news, procedures, etc. Allow your online users to actively engage and receive regular updates either through “push” (e-mail subscriptions) or “pull” (RSS or pod-/vodcasting) technologies. Above all, through a wide range of content and interactive choice let the user-define their online experience with your organization.
Challenge the “from the inside…out” perspective that has dominated Web portal development effort for the better part of a decade. Online, the wants and needs of consumers and patients overlap dramatically. In fact, on a given day a patient may need any information or interaction that might be available on a typical consumer Web site. The key to creating the ideal patient “portal” might be to offer that patient everything a consumer might be expected to want plus the all of functionality offered by a comprehensive Electronic Medical Record (EMR). That perspective alone challenges the “silo-based” approach that has typically defined past portal development efforts. How should healthcare marketers help create understanding of and support for a “patient-centric” online experience that is wrapped within a “consumer-centric” online experience? And finally, how will healthcare marketers prove align their current ROI methodologies with the emerging realities dictated by this overlapping and integrated consumer/patient model?
Conclusions
While the immediate challenge facing healthcare marketing executives, documenting the economic return of marketing and relationship management initiatives, may bring back wistful memories of a time when marketing, branding, and relationship management were strategic imperatives, for most those days are long gone. However, in its place is the opportunity for healthcare marketers to leverage the consumer-oriented online experience they typically oversee into a comprehensive, online user experience that consistently supports individual wants and needs as they move regularly and freely among roles as community member, health information seeker, concerned family member and patient. Such an opportunity will be squandered, however, if both the strategic and economic case are not made for it. Maybe it isn’t déjà vu after all.
Dale Boylston is Managing Partner of Transform Healthcare.
