I am flying home from the Society for Healthcare Strategy and Market Development (SHSMD) conference as I write this, and one of the many conversations I had in Chicago is particularly relevant to our readers.
This particular hospital’s Director of Marketing has spent a lot of money on branding this year, with virtually no impact on the bottom line. Next year’s budget is in question.
She asked for advice.
First I told her that while branding has its place, I’d recommend focusing next year on strategies that can deliver actual patients, rather than activities that solely “feel good” or build her hospital’s image. I also told her that she’d likely rebuild her skeptical CEO’s confidence by showing him some tangible results.
My newfound pal wholeheartedly agreed. However, once she has a budget, she’ll still need to decide where and how to spend it, particularly in lieu of her limited internal resources.
So, I grabbed a napkin and sketched out a diagram we sometimes use at our medical marketing seminars to help people think more clearly about choosing from among various strategies and tactics.
The vertical axis represents financial investment required. The higher up on the line, the more a given tactic or strategy costs. Conversely, the lower on the line you go, the lower up front costs are required.
Keep in mind that the cost line simply illustrates up front costs – NOT return on investment (ROI). In other words, just because a given strategy costs a lot, that doesn’t mean it is necessarily bad. Is $100,000 a year for strategy “X” expensive? Not at all if it delivers $500,000 in trackable revenue.
Of course, if you don’t HAVE $100,000, then strategy X disappears from consideration very quickly.
(Note: Before putting down that kind of cash for a given strategy, we usually recommend starting with a reasonable investment, and then growing the level of commitment as warranted based upon results.)
The horizontal line represents time requirement, starting from very little on the left, to a great deal on the right.
The next step is to fill in the quadrants with various tactics or strategies under consideration. Now, here’s why this simple exercise is so valuable.
Some clients (doctors, hospitals, manufacturers, etc.) have more time than money. Others have more money than time.
Likewise, some strategies and tactics require a lot of time, others require a lot of money, and some require both. (The only thing I can think of that requires zero time and zero money is Santa Claus.)
Of the hundreds of things you could reasonably do, it is easy to get overwhelmed, and underestimate either the time or budget constraint.
Let’s take yellow pages for example. Now, I know you probably HATE yellow pages, but until recent years, many of our clients quietly “cleaned up” with them. (That is after we got them past the gag reflex.)
Dentists and many “consumer-direct” medical specialties like plastic surgeons did particularly well. So well, in fact, that we helped create hundreds of million-dollar-plus practices over the years with this ugly, unpopular strategy.
Now to be sure, yellow pages has its own set of rules, and you need to know how to play by them or you’ll get killed. But if you choose the right combination of variables (size, book, section, ad creative, etc.) you could (and sometimes still can) do quite well.
But ROI wasn’t our only consideration when we recommended yellow pages. We especially liked it for time stressed providers. Why?
Because once we got past developing the strategy and ads, the whole endeavor would become passive for a whole year. Aside from answering the calls, clients didn’t have to do anything again. If our yellow pages test worked, we’d do it again the following year. If not, we’d cut our losses and move on.
Meanwhile, internal strategies were (and are) especially good for clients who have lots of time but little budget. Just keep in mind that while everyone loves internal marketing, most underestimate the time requirement and results are usually more of a “slow burn” rather than explosive.
The chart below is a hypothetical example, though the placement of specific strategies will change based upon your own situation.
For example, building doctor referrals (physician relations) can require time, money or both.
If your doctors are good, willing “schmoozers,” they can invest time and not much cash to build relationships with other doctors. However, most doctors are either unable or unwilling to schmooze. Plus, the opportunity cost of their time can be quite expensive.
(We often hear things like, “My children would have to be starving before I’d go out selling myself.)
On the other extreme, hospitals sometimes deploy a dozen full time field salespeople to build relationships with admitting doctors. Obviously, those salaries and expenses can really add up.
Another example would be office signage. It can cost a lot to get an outdoor office sign installed the first time, but after that it becomes an almost cost-free, 100% passive recruiter.
Community events are fun, feel good and everyone loves them. But elves don’t put them on in the night – you and/or your employees will have to invest time into them.
My last example here would be search engine optimization (SEO). You can outsource all of it, or you can do much of it yourself. Either way, there is a time versus money consideration.
Of course, you’ll need to consider your internal capabilities. You may rather spend time than money on SEO, but you will 1. Need employees who know HOW to do it, and 2. Not have more productive things for them to do with their time.
Finally, you’ll also need to consider projected ROI too.
However, as you consider your marketing options going forward, this simple exercise can help you remember to realistically consider both your investment of money and time for various alternatives.
Unless you have a special “in” with Santa, you are going to have to invest in one or the other.