Why Doctor Marketing Budgets Are Sometimes Larger Than Hospital Marketing Budgets

If you were to guess that hospitals always outspend private practices on marketing, you’d be wrong. While it’s true that most doctors spend very little on marketing, that is not always the case.

Our healthcare marketing firm works with many kinds of clients including doctors, hospitals and corporations. In recent years, we have noticed a number of instances where hospitals are being significantly outspent in the marketplace by individual doctors. How can that be?


The doctors who invest significantly in marketing are willing to do so because they look at marketing as an investment, not an expense. In other words, these doctors will happily spend $50,000 on marketing to bring in $250,000 in revenue. They are also willing to try a variety of ideas until they find a proven, profitable formula. Finally, they tend to focus on strategies which attract specific types of cases, rather than mere, “feel good” marketing.

Meanwhile, hospitals usually have a variety of stakeholders with different and sometimes competing objectives. While some executives at a given hospital may look at marketing with a similar return-on-investment philosophy, others may argue that marketing is “expensive,” “ineffective,” a “waste of resources,” or even, “beneath us.”

In instances like these, the “marketing-savvy” Davids can handily take lucrative cases from the unwitting Goliaths, without their even knowing it.

I realize that hospital and medical practice politics are complex, but be forewarned: sometimes the little (but business smart) guys win.


Marketing Lessons From My Favorite Neurobiology Professor

As Associate Dean of Neurobiology at University of California, Irvine, my good friend Dr. Michael Leon knows a great deal about how the brain works. What’s more, he is as fascinated with marketing’s impact on human behavior as I am.

After a long, fun conversation the other day about taking smart marketing risks, he sent me an email that I think you will find both interesting and useful.

“I don’t know why, but I love this kind of thing. You may also be able to get some mileage out of the story about how Orange County, California, got its name. When it split from LA county, there were many suggestions about what to name to the new county, including Hog County, because there were many grown here. Finally, to evoke the idea that it had a Mediterranean climate, someone suggested that it be called Orange County.

Oranges at that time were a rare commodity that were often given as Christmas presents. The problem was, no orange had ever been grown in the area.

AFTER they named it Orange County, they imported some orange trees from Florida but they all died (the juice oranges needed the plentiful rain that comes down in Florida).

Finally, they tried navel orange trees and the county was soon covered with them. Perhaps the moral is that sometimes you have to have enough confidence in doing something like marketing, even if you’re not sure of the outcome. The ones with the confidence eventually figure it out.”

The First Step To Dealing With Our “New Normal” Is Acceptance

Another recession is “unavoidable” according to an article today by Yahoo! Finance. Lakshman Achuthan, co-founder of the Economic Cycle Research Institute (ECRI) went on to elaborate, “You haven’t seen anything yet. It’s going to get a lot worse.”

These comments are significant for two reasons: 1. the whole point of the ECRI is to identify whether or not we are in a recession, and 2. only a month ago Acuthan said the “jury is still out.”

Now, apparently, the jury has returned and the verdict is “guilty.”

Many people would argue that the “old recession” never ended – that this “new recession” is not a double dip but rather the continuation of a very long recession. (Achuthan disputes that.)

Of course, the “Great Recession” was vehemently denied by our government and the media for over a year, until finally in December 2008 the widespread financial panic made further denial impossible. But just four months later, Bernanke already began talking about “green shoots.” Then, in September 2010, the recession was declared to have been over since June 2009!

Talk about the Emperor wearing no clothes!

I have lived through a number of recessions in my lifetime, and I can say with absolute certainty that this recession (oh excuse me, the LAST recession) was the most denied recession I have experienced.

But frankly, the debate of whether we are entering a “double dip” or that the “Great Recession” never ended misses the point.

The fact is, we are now in a “new normal.”

Most people think 2007 was normal, and we just need to get back there.

The trouble is, 2007 was NOT normal. It was a crack high.

The economy was funded by an insane real estate Ponzi Scheme. As real estate values soared, lots of people got rich, and far more THOUGHT they were rich.

Two examples from my own little world:

1. A friend’s cleaning lady asked him for advice about what to do with her THREE investment condos that were all under water. Now I am all for the Great American Dream, but I am not sure a cleaning lady earning $12 an hour should be investing in three condos.

2. A house in my neighborhood was purchased as a rental by a cocky twenty-something sub-prime mortgage broker who drove around in a Bentley. I remember thinking, “Uh oh, this isn’t going to last.” Sure enough, when the music stopped a few months later he lost both the house and the Bentley. He mistook being at the right place at the right time for his own financial genius.

These little anecdotes were repeated across the USA countless times. I am sure you have stories like these too.

But the hangover from a crack binge isn’t the whole story.

While the media rightly talks about the real estate fiasco as a cause of the recession, very few people connect the dots about the larger, structural changes that are taking place at the same time.

As baby boomers age, they will spend much less on big houses and big cars. Younger consumers are both fewer in number and poorer. As someone wrote awhile back, “Who is going to buy and furnish all these 4,000 s.f. mini mansions?” (Harry Dent has been writing about the economic impact of demographics for years.)

Meanwhile, while almost everyone acknowledges demographics make Medicare and Social Security unsustainable in the long run, virtually no one has the political will to do much about it. Just yesterday I saw a commercial from AARP extolling us to protect Social Security and Medicare – which would be great except that we cannot afford to keep funding these” birthrights” like we have in the past.

As if that weren’t enough, official unemployment figures remain close to 10%, and the hard truth is that a lot of jobs aren’t coming back. Culprits include:

1. Many high-paying manufacturing jobs have disappeared overseas, replaced by lower cost workers.

2. Now that many of today’s unemployed have become chronically unemployed, their skills are out of date.

3. In a world where high tech is the future, we are graduating far too few engineers and scientists.

Then on top of all that we have crushing domestic debt, financial crises in Europe and ongoing consumer malaise.

I could go on, but the bigger question is, “What should we do?”

I would argue that it is time to get past the earlier Kübler-Ross stages (denial, anger, bargaining, depression) and finally get straight to “acceptance.”

Only from a perspective of reality will we finally make the necessary decisions we have been putting off.

I remember reading a book by Robert Ringer  in the 1970’s that sums it up nicely:

“Reality isn’t the way you wish things to be, or the way they appear to be, but the way they actually are. You either acknowledge reality and use it to your benefit, or it will automatically work against you.”

So going forward, I advocate preparing for ongoing economic problems and staying flexible in your approach.

I am a Partner in a medical advertising agency, and I think it is a good case study.

Through most of 2008, we (like a lot of companies) had strong sales.

When the bottom fell out in 2009, the phone almost stopped ringing. The doctors, hospitals and manufacturers we serve either froze or panicked. It was really amazing that demand could drop by almost 50% so quickly.

We survived those tough times, though, because our company is “new economy” based. Due to technology, we have very little overhead and most of our costs are variable. When demand slowed, we cut expenses and our costs shrank almost proportionately.

(I cannot tell you how happy I am that we didn’t have all the expenses of a traditional ad agency during that time.)

When the phone started ringing again in 2010, we didn’t see any “green shoots.”

No one was calling because they were optimistic about the economy. Rather, prospective clients told us they simply couldn’t wait any longer for things to get better.

(To this day, I cannot think of a single client who has told us he or she wants to market in order to take advantage of the “better economy.”)

Today, my company is receiving new opportunities from every direction. This is in fact the most exciting time of my professional career.

But despite all the good things that are happening for our team, I still “hope for the best, but prepare for the worst.”

There are fundamental changes going on in the economy (and in healthcare for that matter), and things are going to limp along for a LONG time.

So your job is to accept and deal with that fact.

Let’s rethink, restructure, rebuild, be flexible and especially prepare for our “new normal.”




Medical Advertising Lessons From Daniel Boone

Let’s be honest, some doctors (and executives) are  so risk averse that they are simply not cut out for external advertising.

When we are worried about a potential client, we work extra hard to confirm if they have realistic expectations. Not everyone passes.

As an extreme example, I once had someone ask for a guarantee on one, $500 ad. (Do you think that doctor can guarantee his patients good health for $500?)

In cases like that we politely say something like, “Based upon your level of anxiety and expectations, frankly we think you shouldn’t do advertising.”

That always surprises them, because they expect us to sell them. But not only would “selling them” be unethical, we know from experience that hyper anxious attitudes doom advertising campaigns from the outset.

Besides, there are always more conservative alternatives for these clients to pursue.

But the big “a-ha” for me came from an episode of History Channels’ “America: The Story of Us.”

This episode reminded me that America became America because some people were willing to take (much graver) risks as pioneers.

Sometimes we all think a little small, and it is easy to become paralyzed by even inconsequential risks.

Of course, not everyone in the old days was a pioneer – and some pioneers failed – but there were enough successes that America became the envy of the world.

So the next time you have to decide whether or not you want to take a small marketing risk, I recommend you ask, “What would Daniel Boone do?”

Insist On A Specialist – 7 Reasons to Choose a Medical Advertising Agency

Is the following story a case example of “marketing malpractice?”

A few weeks ago I received an email from an employee of a “general” advertising agency that was either pitching or trying to hold on to a healthcare client. (For your sake, I hope the email wasn’t from your ad agency.)

The people at this advertising agency apparently needed to do their homework. They asked us which media are best for healthcare clients, how to get return on investment, when to run, how to buy the media, what makes the phone ring, etc.

Funny thing. While their website  claims healthcare advertising expertise, they are apparently trying to figure these things out as they go. On their client’s dime.

Putting aside the fact that we politely declined to give them a free education (our kids need to eat too after all), there is a larger lesson to be learned from this anecdote.

It turns out many healthcare clients unwittingly settle for an inexperienced marketing or advertising generalist. Sadly, they often choose a firm that is local, has good salespeople and touts itself as being very “creative.”

Now while everyone needs to make a buck these days, and I don’t begrudge general ad agencies, I truly believe medical advertising is so unique that it requires specialized expertise. Here’s why:

1. The culture of healthcare is unique. Hospitals, for example, are run by business people but depend on the cooperation of doctors. Their day-to-day world is rife with political landmines. “Oops, my bad, the entire project just exploded for political reasons I don’t fully understand.”

2. Medical marketing laws and ethics can trip up medical advertising amateurs left and right. (See this recent article for some good insights.)

3. Why would anyone want to reinvent the wheel? Medical advertising is hard enough when you know best practices. Without relevant experience, you are doomed to experiment with hit-and-miss efforts, on the client’s tab.

4. While most advertising agencies try to differentiate themselves by how creative they are, healthcare clients are usually far more interested in tangible results. Hospitals, practices and manufacturers typically don’t want to pay for their ad agency’s creative fulfillment or art awards. Sure we want to be clever and imaginative, but not at the expense of results.

5. Consumers react differently to healthcare offerings than to traditional products or services. The stakes are higher, the consequences of a poor decision are worse, insurance reimbursement completely distorts free market dynamics, reputation is paramount, referral patterns are different and the consumer has no idea what the hell it is that you do. Winging it for a local restaurant is one thing, but to feel your way around healthcare advertising is quite another.

6. Ad agencies typically view their job as ending once the ads are run. What about doctor referral patterns? How do you track? Who is going to answer the phones? What about after hours inquiries? How do you convert visitors into patients? I used to work for one of the world’s leading ad agencies. Problems like those were “client-side.” But in healthcare, there is rarely someone that can handle all those thorny issues internally by themselves.

7. Finally, the marketing people that work for hospitals, practices or manufacturers often feel “all alone.” A true healthcare advertising agency can help internal marketing people finally get buy off from “higher ups.”

Of course you could argue, “Naturally you advocate these things so well, after all, you own a medical advertising agency.”

Fair enough.

But no one said you have to hire our firm.

Whomever you hire, just make sure they truly have medical advertising expertise and can bring added value based on real world experiences.

After all medical advertising is hard enough when you know what you are doing.

Trying to figure it out along the way is just to brutal to contemplate.





Shrugging Off Unhappy Customers Can Be Hazardous – Just Ask United Airlines

I still remember the day early in my career when an “old hat” at the company I worked for pulled me aside and confided, “While other companies give lip service to customer service, we don’t even do that here.”

Now, of course, that was an atrocious attitude, though he turned out to be correct. (I left shortly thereafter.)

However, in the age of the Internet and social media, such corporate indifference could be hazardous to your bottom line.

I will write soon about patient ratings (you may well be surprised by my views), but in the meantime I want to share a story starring United Airlines.

Dave Carroll, a musician, watched helplessly as his expensive Taylor guitar was dropped and broken by United’s baggage handlers. After a long and frustrating process, United refused to  reimburse him for the repairs. It felt like a slap in the face, so he told the representative, “I am a musician and I am going to create three videos about my experiences with United.”

It must have caused quite a whirlwind at United’s corporate offices when Carroll’s humorous first video, “United Breaks Guitars,” appeared YouTube. The PR folks tried to intervene, but by then the damage was done. Carroll refused to back down and later created the second and third videos as well.

Take  moment to watch the first video – just like 10,000,000 people already have. That’s 10 MILLION. What a debacle.

But the story continues. Last year I was stranded in Denver at a United Airlines customer service line for over 2 hours, with about a dozen other travelers. The one indifferent clerk would disappear for long stretches at a time. Worse, she never apologized, got help or even looked up at us. By then our little group had developed the cynical camaraderie common to situations like these, and I happened to mention the United Breaks Guitars video. But if only I could show it to them…

Ah, but then I remembered I could. So I pulled out my iPhone, and for a moment my fellow travelers enjoyed a vengeful laugh at United’s expense.

What do you think happened to those weary travelers when they (finally) got home? Think any of them posted their travel story on Facebook, along with the aforementioned video link?

The viral aspect of the video is easy to understand. Everyone has had the experience of feeling powerless when dealing with an indifferent corporation. (United isn’t alone, of course.) The video struck a nerve, clearly.

So what does this mean to you? Well, if you are in healthcare, whether you like it or not, your patients are now empowered. And, as they get used to technology, they are going to use it a lot more than they do now.

Most patients will forgive your organization for slights if someone apologizes, shows sincerity and handles the problem. But if all patients get is an indifferent runaround, look out. Someone is going to want to get even online.

By the way, if you  are ever standing in an endless line, feeling slighted by a certain airline, you now have a good story and video to share…

Healthcare Marketing is a World of Specialists

Are you setting up your marketing person (or department) to fail?

Almost every day we hear from a frustrated provider-based marketer whose boss thinks she should be an expert at every imaginable marketing task.

The problem is that marketing – just like medicine – is a world made up of specialists.

For example, our firm works with over 40 healthcare marketers on our team. They include: Marketing Strategists, Account Managers, Web Designers, Web Programmers (a different skill set entirely from design), Pay-Per-Click Specialists, Search Engine Optimization Specialists, Writers, Art Directors, Directors of Photography (video), Editors (video), Graphics (video), Editor (print), Proofreader, Director of Client Services, a Media Buyer, Publicists (to get press coverage), Physician Liaisons, Trainers and Administrative personnel. Beyond our core team, we utilize others as needed, e.g., talent agents, photographers, production assistants, etc.

Most doctors and healthcare executives are very surprised to learn there are so many areas of expertise required. “That’s great, but all we need is a website.”

Really? While people typically assume a graphic designer is the person to see for a website, the designer is often the last person involved. Someone needs to dictate the strategy, someone else writes copy and someone else has to manage the process. If getting traffic is an objective (almost always), someone has to run the pay-per-click campaign, while someone else will be responsible for the search engine optimization. If the site is complicated, someone has to create the programming, while someone else handles the artistic design.

If it were possible to hire one person that could do everything well, believe me, agencies like mine would beat you to it and hire them.

People who do everything well are like Bigfoot – very hard to find in the real world.

Another truth to consider: some marketing tasks require higher levels of expertise, training and cost than others. Just like in medicine and in law, marketing firms like mine work with “extenders” as an important part of the team. Extenders keep the process moving forward, and keep your costs under control.

One final thought.

It’s bad enough that healthcare marketing is often a thankless job. Please don’t make it an impossible one too.

The next time your marketing person tells you she needs expert help to accomplish your objectives, please support her, rather than set her up for failure.

New Instructional Video Series About Creating Healthcare Videos

The use of video in healthcare marketing is exploding these days for two reasons.

First, production is getting easier and costs are declining. Second, doctors, hospitals and healthcare corporations want to post video on their websites, in their social media efforts and in their general marketing programs.

As a result, my firm created a 6-part instructional video series, “Heathcare Video Marketing Secrets.” The first two segments are ready, and the remaining segments will be released over the coming month. You can check them out here.

Where Can You Find a Retail “Boost” to Your Bottom Line?

In case you haven’t noticed, many healthcare services are now on the fast track toward “retailization.”

For example, within the past two weeks I have seen flu shots sold at the airport, the upscale gym I frequent, and also my mother’s Walgreens pharmacy.

Of these new-kid-on-the-block flu shot providers, Walgreens was the most sophisticated. They had a large banner facing a heavily trafficked street, plus internal point-of-purchase signage to boot. This particular pharmacy serves a large senior population, and I noticed several “sweet little old ladies” waiting in line, their sleeves dutifully rolled up.

Please note that Walgreens not only gets extra revenue from providing the flu shots, but also generates goodwill, foot traffic and add-on sales from seniors who wish to avoid the flu without the inconvenience of a formal doctor visit.

What struck me about all this is how fast things are changing.

LASIK surgery is really a competitive retail business these days, doc-in-a-box retail locations abound in drug and grocery stores, and flu shots are offered nearly everywhere.

While many providers (doctors and hospitals) often gloomily complain about declining revenues, savvy retailers and others recognize competitive voids in the marketplace and seize the day.

After all, every flu shot my mother’s Walgreens provides does NOT come from a neighborhood doctor.

Of course, I am not saying everyone needs to provide flu shots (though some of you should).

Rather, I merely wish to remind you that creative thinking can open new opportunities, especially when you look at things from the consumers point of view. You may think offering flu shots would appear “salesy,” but consumers see it as “convenient.”

There are dozens of services beyond flu shots that providers can offer, including:  therapeutic massages, teeth whitening, cosmetic services, sports enhancement programs, work and school physicals, workplace evaluations, supplements, weight loss programs and others. These kinds of other services can open whole new, non-insurance, “consumer direct” opportunities.

Sometimes you can build revenue easily, by asking patients during their office visits something like, “Have you had your flu shot?”

Other times, your new idea might be bigger, and lead to an entirely new business. Of course, whole new businesses usually will require time, money and courage.

Either way, I have to ask you….

Which new consumer-direct services are you going to provide this year?