What Makes a Good Health Care Marketing Plan

What Makes a Good Health Care
Marketing Plan?

What Is A Health Care Marketing Plan?

• A marketing plan is not a list of marketing
ideas from which you randomly select
different concepts to test or combine for trial-
and-error experimentation
– That is just random, episodic, spaghetti-on-the-
wall marketing activity - which is almost always a
high-risk prescription for disappointment,
frustration and failure

• A marketing plan is a strategic document that
is designed to facilitate the achievement of
specific business goals and objectives over a
specific time period

• Would you consider hiring contractors to build
out your new office or clinic without first
developing and approving the architectural
blueprints?
• That's essentially what you are doing when
you engage in random, reactionary marketing
activities without first developing a well
thought out marketing plan

• Most marketing plans are conceived to extend no
longer than one year before the plan is
reassessed for modifications, additions,
subtractions or entire reinvention depending on
constantly evolving business goals and
circumstances
– A properly implemented marketing plan is constantly
being assessed by accurate and consistent tracking
systems to evaluate the plan's performance against
expectations
– This continual evaluation is performed so that ongoing
adjustments can be made to improve the plan's yield

• A good marketing plan allows you to
anticipate, assess, prepare, build a road map
to follow, cover-your-bases, construct
necessary support systems, protect yourself
and dramatically improve your chances for
marketing success

Elements of a Marketing Plan
• Target Marketing
• Competition Analysis
• SWOT Analysis (Strengths, Weaknesses,
Opportunities and Threats
• Smart Goals
• Strategies and Tactics
• Marketing Budgets
• Marketing System

Target Marketing

Target Marketing
• Your marketing budget is going to be most
effective when it reaches your selected target
market
– The benefit of target marketing is simple—
efficiency
– Solid target marketing is a method to more
efficiently reach your patients
– Target marketing is a better use of your most
valuable resources, i.e. time and money, to
generate additional revenue

Target Marketing
• Your goal is to get to know as much
information as you can about your existing or
prospective customers
– The more you know about your customers, the
better you will be able to make decisions that will
enhance your ability to communicate and connect
with them

Target Marketing
• Four Ways to Identify Target Markets
– Geographics: The location, size of the area, density, and
climate zone of your customers
– Demographics: The age, gender, income, family
composition and size, occupation, and education of your
customers
– Psychographics: The general personality, behavior, life-
style, rate of use, repetition of need, benefits sought,
and loyalty characteristics of your customers
– Behaviors: The needs and wants your customers seek to
fulfill, the level of knowledge, information sources,
attitude, use or response to a product of your customers

Target Marketing
• Focus on Benefits
– One of the marketing fundamentals is focusing on
benefits
– This perspective is critical to target marketing
– Establishing an intimate understanding about the
needs and wants of your desired target market is
critical
– How will your customer benefit from using your
services or products?

Target Marketing
– What tangible or intangible benefits might customers
realize, and is it possible to quantify these benefits?
– What is your customer really buying?
– This much is certain: No one wants to buy surgery!
Or dentistry! Or physical therapy! Or invasive
procedures!

Target Marketing
– People purchase services and products to realize one or
more of the following life-improvement benefits:
• Pain relief
• Productivity
• Abilities
• Confidence
• Appearance
• Personal relationships
• Peace of mind
– Basically, you all sell the same product - a happier life, at
least that is what your customer wants to buy

Target Marketing
• The Target Market Profile
– Geographics:
• Lives within the ZIP codes 97401, 97402 and 97405
– Demographics:
• Married
• Between the ages of 21-35
• At least one child
• Condominium or home owner
• Education experiences beyond high school
• Earning a combined annual family income of $50,000 or
greater

Target Marketing
– Psychographics:
• Values time and considers it their single most limited
resource
• Excited about accepting and using innovative ideas and
products
• Consistent Web users
• Prefer the Internet over magazines and newspapers for
information they trust
• Increasing resources invested into safety and security
issues
• Beginning to plan for their future

Target Marketing
– Behaviors:
– They are leaders in product selection and respond to the
opinions of the "industry experts" when making
purchase decisions
– This group will first look to the Internet to acquire this
information
– They defend these decisions under most any
circumstance and will adamantly "sell" those that ask
why they use the product or service and why they made
the choice they did
– This group can be a powerful, unpaid sales force
resulting from the referral network they build and use

Target Marketing
• Target marketing allows you to reach, create
awareness in, and ultimately influence, that
group of people most likely to select your
products and services as a solution to their
needs, while using fewer resources and
generating greater returns
• The more detail you know about your "ideal"
customers and clients, the better you will be
able to make them aware of your products and
services, and how to purchase them through you

Target Marketing
• Who do you consider will benefit the most from your
products and services?
– Think of the people and their most common characteristics
and attributes
– One of the best ways to identify your target market is to
look at your existing customer base
– Who are your ideal clients? What do they have in
common?
– If you do not have an existing customer base, or if you are
targeting a completely new audience, speculate on who
they might be, based on their needs and the benefits they
will receive
– Investigate competitors or similar businesses in other
markets to gain insight

Competition Analysis

• Success is not achieved by ignoring your
competitors but rather by anticipating
competitive issues and influences so you can
always have a proactive plan and strategy for
staying ahead of your competition
• There are many ways to compile good
research on your competition
• Following is a list the easiest and most
effective processes

• Internet Competitive Research
– In today's Internet society, access to information has
never been better or easier
– For the primary competitors you have already
identified, you can conduct a simple Google search
with the name of the practice or the name of the
owner(s) and that will usually lead you to their
website (if they have one)
– In many cases, their website will feature how they are
attempting to position and differentiate themselves,
as well as listing the scope of programs, services
and/or products they offer

• In addition to a competitor's website, you may
also find other interesting information about
the provider(s) or the practice
– This information might include articles they have
authored, media interviews, legal actions that are
public information, etc

• For a more comprehensive list of your competitors, you can
do an Internet search by your profession or specialty and
your area, just like a prospective patient might do
– For example, if you type "plastic surgeons Los Angeles" you will
draw up a search result that includes:
• sites that list plastic surgeons throughout the Los Angeles area
• "find a doctor" sites
• Yellow Pages online directory sites
• individual sites of some of your more sophisticated and aggressive
Internet competitors who have managed to get a high search engine
ranking for their website through effective search optimization
– In many cases, the compilation list sites include links to the
individual practice websites (if they have one)

• Media Competitive research
– There are many ways you can study your local
media to get additional competitive information
– For example, even though Yellow Pages
advertising has been impacted somewhat by
increasing Internet marketing, you will still find
the most aggressive marketing competitors
through their large space display ads in your local
Yellow Pages directories

• As with your competitive website research,
you will learn from these Yellow Pages ads
how your more ambitious competitors try to
position and differentiate themselves, as well
as the programs, services and products that
they offer, their hours of operation, special
features and benefits, emergency access, etc

• You can also scan and collect competitive
advertising from local newspaper ads, direct
mail, TV commercials, radio commercials,
billboards or other media
– When you pay more attention, you will also begin
to notice any articles, publicity or other public
relations exposure that your competitors may
achieve in the media

• If you don't live in the area where you
practice, you can enlist the help of others who
do live in the area of your practice
– This group may include employees, friends,
relatives or even your patients (assuming they are
unquestionably loyal to you)

• Ear-to-the-ground Competitive Research
• Often, this type of "in the field" sleuthing is
the most effective way to gain competitive
intelligence, especially from those competitors
whose marketing is not advertising-based or
visible in the media
– You can - and should enlist a virtually army of
"special agents" who are conditioned to have their
ears to the ground for anything they hear or learn
about your competitors

• Ear-to-the-ground Competitive Research
• This group includes pharmaceutical detail
reps, vendors, loyal patients, hospital staff,
your employees, friends and relatives
– You may be surprised at how much information is
available to you if you know how to uncover it

• Analyzing Your Data
• When you ferret out valuable competitive
research, you need to take advantage of what you
learn
– Success in business is about anticipation, planning
and action
– Business is not designed to be fair and 80% of the
business will go to 20% of the players (The 80-20 Rule
– The winners in that 20% group are able to anticipate,
plan and take decisive action before their competitors
even know what hit them

SWOT Analysis

SWOT Analysis
• SWOT is an acronym for Strengths,
Weaknesses, Opportunities and Threats
– A periodic evaluation of your internal and external
environment is an important part of the strategic
planning process
– Because SWOTS are inherently subjective, it is
always good to get an external SWOT analysis
from a well-informed but objective third party
that can be compared to your own SWOT

SWOT Analysis
• Strengths and Weaknesses are the internal
evaluation components of the SWOT
– Opportunities and Threats comprise the external
evaluation
• One of the more interesting definitions of
marketing is that "Marketing is the process by
which resources are brought to bear against
opportunities and threats"
– In order to determine which resources you can bring
to bear against opportunities and threats, you have to
understand your strengths and weaknesses

SWOT Analysis
• Strengths are your capabilities and resources that can be
used as the basis for developing a competitive advantage
Strengths could include:
– your special expertise and/or experience
– a new, innovative product or service
– location of your business
– quality processes and procedures
– any other aspect of your business that adds value to your
product or service
– Weaknesses include areas you need to improve and/or avoid
– Weaknesses can sometimes be considered as the absence of
certain strengths
– In some cases, a weakness may actually be the flip side of one
of your strengths

SWOT Analysis
• Weaknesses could include: -
– lack of marketing expertise, plan or system (or all
three) –
– undifferentiated products or services (i.e. in relation
to your competitors) –
– location of your business –
– poor quality goods or services –
– damaged reputation
– In addition to new or significant trends or other
opportunities you may already know, additional
opportunities can spring up based on your external
environment analysis

SWOT Analysis
• Opportunities could include:
– a developing market (such as the Internet)
– a new technology, service or procedure you can offer
– mergers, joint ventures or strategic alliances
– moving into new market segments that offer improved
profits
– a market vacated by an ineffective competitor
– changes in population profile, social patterns, lifestyle
changes, etc
• A threat could be anything that stands in the way of
your success
– No practice is immune to threats, but too many practice
owners miss or ignore these threats, often at great cost

SWOT Analysis
• Threats could include:
– a new competitor in your home market
– price wars with competitors
– a competitor has a new, innovative product or service
– competitors have superior access to channels of
distribution
– economic slowdown
– change in governmental policies and/or regulations
– changing insurance plans and/or contracts for major
area employers Simple rules for successful SWOT
analysis

SWOT Analysis
• SWOT Conclusion:
– Be realistic about the strengths and weaknesses of your
practice
– Analysis should distinguish between where your
organization is today, and where it could be in the future
– Be specific
– Avoid gray areas
– Always analyze in relation to your competition i.e. better
than or worse than your competition
– Keep your SWOT short and simple
• Avoid complexity and over analysis Once key issues have been
identified, they feed into marketing goal
• You can also apply SWOT analysis to your competitors
• This may produce some interesting insights!

SMART Goals

SMART Goals
• So many businesses fail to thrive because they
have never really established SMART goals
• SMART is used as an acronym in goal-setting
discussions
S=specific, significant, systematic, synergistic
M=measurable, meaningful, motivational
A=achievable, agreed-upon, action-based,
accountable
R=relevant, realistic, responsible, results-oriented,
rewarding
T=tangible, time-based, thoughtful

SMART Goals
• Long-term vs. Short-term goals
• Most businesses that consider goals seriously establish
both short-term and long-term goals
– Marketing plans are generally real-time exercises in goal-
achievement, so most marketing plans emphasize short-term
goals (achievable within one year or less)
– Remember that marketing plans are organic, dynamic and
constantly evolving, so they are well-suited to short-term goals
• If you are just establishing or reinventing your marketing
system, you may also establish long-term goals in your
initial marketing plan because you will need to include
long-term system infrastructure in your initial marketing
plan
– However, with ongoing, year-to-year marketing plans, short-
term goals will typically be the primary focus

Marketing Strategies and Tactics

• After you have identified your goals, you need to
evaluate, prioritize and organize the combination
of specific marketing strategies and tactics that
will be best suited for you to use in pursuing your
goals
• A well constructed marketing plan is a perfect
illustration of a whole that is greater than the
sum of its parts
– The selected strategies and tactics work synergistically
to complement one another for exponential positive
results

• Goals vs. Strategies vs. Tactics
– Goals are specific, measurable, achievable, relevant
and tangible business objectives
– Strategies are the ideas and approaches that are
developed to achieve the goals
– Tactics are the specific actions, details and activities
that must occur in order for the strategy to succeed
– Here's one good example of the relationship between
goals, strategies and tactics, and represents only a few
of the possible strategies and tactics for the sample
goal

• Goal: Increase new patient volume by 20% in the next
year
• Strategy: Improve patient experience to inspire more
word-of-mouth referrals
• Tactics:
– Institute quarterly customer service training sessions for
staff and owners
– Create incentive program for staff based on increased
referral volume
– Devote one staff meeting per month to new ideas for
improving patient care
• Experience - Create and display a framed poster in
reception area defining our practice's unwavering
patient satisfaction commitment

• Strategy: Leverage relationships with established
patients and improved patient experience for more
word-of-mouth referrals
• Tactics:
– Develop and institute new patient satisfaction survey
Leave space on survey for happy patients to refer others
– Practice owner(s) asks patients for referrals at opportune
times
– Staff supports owner(s) with additional encouragement to
patients to refer when the opportunity presents itself
– Post "Thank You For Referring" bulletin board in reception
area with names of patients who have referred others

• Strategy: Develop and test targeted external
advertising campaign
• Tactics:
– Test new print ad series in local newspaper
– Test direct mail program to new residents using
oversized postcard
– In an optimally implemented marketing plan, all
strategies and tactics are implemented
comprehensively
– At the very least, each strategy in your plan should be
implemented in the same comprehensive and
synergistic manner that it was conceived

Marketing Budgets

Marketing Budgets
• Practices typically establish budgets for various
categories of operational expenses but rarely for
marketing
• Even practices who frequently engage in
marketing activities and expenditures will often
have no pre-established budget for marketing
• Unless they develop and take advantage of the
many benefits of an annual marketing plan, most
practices determine their marketing expenditures
on a case-by-case basis, a process consistent with
random marketing activities

Marketing Budgets
• Unfortunately, random financial decisions made
out of context of a real strategic plan frequently
yield disappointing results
• In a marketing plan, a pre-established and
committed budget is essential to assuring the
plan's viability
– Remember, in establishing SMART goals, the "A"
stands for "achievable" and the "R" stands for
"realistic" (among other attributes)
– How can you know that you are developing an
achievable and realistic plan if you don't know what
budget resources you can or will commit?

Marketing Budgets
• Cost Centers vs. Revenue Centers
– Most practice owners and administrators put most
of their focus on budgeting for operational cost
centers
• A cost center is an accounting term used to refer to a
department in a business that incurs expenses but does
not generate revenue directly

Marketing Budgets
– Your cost centers cover the expenses that are
required to service and operate your business
– A revenue center, on the other hand, refers to
departments and/or activities engaged in by the
business that generate revenues directly into the
business

Marketing Budgets
– Money in your business flows out of your cost
centers and money flows in to your revenue
centers
• Another way of understanding the relationship is that
without sufficient revenue coming into the business,
you will not be able to afford to fund your cost centers
without operating in the red, which eventually leads
you into bankruptcy

Marketing Budgets
– Revenue centers also incur expenses for the
specific purpose of stimulating and generating
revenue into the business - unlike cost centers,
which are required to operate the business but do
not generate revenue directly

Marketing Budgets
• Revenue Center Profit Influences vs. Cost
Center Profit Influences
– Because cost centers service the revenue
generated by the business but don't contribute
directly to that revenue, the key to increased
profitability in cost center management is based
on efficiency
• The more efficiently the business functions to keep
operating costs as low as possible without
compromising quality, the more profit that is left at the
end of the process

Marketing Budgets
– Since most of the focus of owners, administrators
and management of the practice is on cost
centers, it is common for owners and managers of
the practice to assume that keeping costs under
control is the key to all profitability for the
business

Marketing Budgets
– To operate the practice with this mentality is often
a critical mistake because the cost center
profitability model does not work for revenue
centers
– In fact, the exact opposite model applies to
revenue center profitability

Marketing Budgets
– Revenue centers require "fuel" in the form of
investment capital in order to stimulate and
generate the desired revenue
– If you don't put enough fuel in your engine, you're
going to run out of gas!

Marketing Budgets
• Marketing is a Revenue Center - NOT a Cost
Center
– Because marketing is primarily concerned with
generating and protecting sources of revenue, a
marketing budget belongs in a revenue center, not a
cost center
• Marketing budgets should be evaluated in the context of
supporting your SMART goals
– If you don't have the financial resources or the
willingness to commit them to this category of
investment in the growth and/or protection of you,
you may need to rethink your goals and possibly
establish less ambitious objectives

Marketing Budgets
• Marketing Budgets Based on Month-to-
Month Cash Flow are NOT Budgets
– Effective marketing is a consistent, ongoing
process based on solid systems, good planning
and excellent implementation
– If you attempt to fund your marketing budget
based on a month-to-month assessment of
positive cash flow, you will find that you cannot
maintain consistency in your marketing plan and
your results will be seriously compromised -
sometimes disastrously

Marketing Budgets
– A marketing budget must be taken seriously as a
financial commitment to your business success or
your efforts will almost certainly be doomed to
disappointment and failure

Marketing Budgets
– Does this mean that you have to have your entire
annual marketing budget secured in some
separate account before you begin your
implementation program?
– Not necessarily

Marketing Budgets
– You may not have all of your necessary budget
funding set aside when you start, but you have to
know with confidence that you will have access to
those funds as you need to utilize them without
having to rely on the hope that your cash flow will
be continuously positive enough to support your
budget without compromise or interruption

Marketing Budgets
• Budget Models
– There are many different budgetary models you
can consider
– Here is a list the most common, in order from the
most highly recommended for practice owners
who are serious about their goals to those models
that are not recommended but do exist

Marketing Budgets
• Budget Models
• Objective and Task Budgets
• This method is probably the "purest"
budgeting method for a marketing plan
– The budgeter must specify exactly what goals and
outcomes are expected
– Budgets are then based on this expected outcome
• For example, the primary objective could be to increase
overall revenues by 20% over a 12-month period

Marketing Budgets
• Budget Models
• The following steps are followed in developing an
Objective and Task Budget:
– a. Specify the marketing objective(s) to be achieved
– Ideally, these goals must be quantifiable and
measurable
– b. Specify the marketing strategies and tactics
necessary to achieve the stated objectives (i.e., brand
development or enhancement, advertising, public
relations, networking, internal marketing, training,
etc.) including quantity and frequency of activity and
associated costs

Marketing Budgets
• Budget Models
• The following steps are followed in developing an
Objective and Task Budget:
– c. Evaluate profitability of marketing plan if goals are
achieved at the expected costs
– d. Assuming profitability level is acceptable, assign
budget based on anticipated costs associated with
strategies and tactics necessary to achieve the goal
– e. Launch plan, monitoring and tracking closely to
adjust strategies and tactics as necessary to achieve,
maintain or exceed anticipated profit levels

Marketing Budgets
• Budget Models
• ROI-based Budgets
– In this model, the marketing budget is established
based on a ratio of anticipated return-on-
investment for the budget and its associated
marketing activities
– The challenge in ROI-based budgets comes in
identifying a reasonable expectation for return

Marketing Budgets
• Budget Models
– Most ROI-based budgets work from a source of
quantified data on performance of similar
marketing plans or activities in similar situations
and circumstances to those of the budgeter
– The difficulties in this model are
• a) limitations on availability of statistically meaningful
comparative data; and
• b) there is no guarantee that the performance of the
new budgeter's marketing plan will mirror those whose
data was used for the ROI modeling

Marketing Budgets
• Budget Models
– There are many variables that affect the
performance of a marketing plan which are
difficult or impossible to measure and compare
– These include personal initiative, attitude, sales
skills, focus, etc

Marketing Budgets
• Budget Models
– Still, ROI-based budgets are employed in certain
situations - assuming the data is available - where
a marketer wants some level of reassurance,
however unscientific, that the odds of success are
in their favor

Marketing Budgets
• Budget Models
• Percentage Method
– In using this method, the budgeter simply allots a
predetermined percentage amount for marketing
– That percentage might be a percentage of profits,
a percentage of revenues, a percentage of sales,
etc
– Although this method is easy to administer, there
are some problems associated with it

Marketing Budgets
• Budget Models
• For example, how do you determine what
percentage to assign for marketing?
– Is 5% too much?
– Is 2% too little?
• The assignment of a percentage is typically
subjective or even arbitrary, based on advice
of financial advisors, experience, "gut feel" or
other factors

Marketing Budgets
• Budget Models
• Also, with this method, the marketing budget
increases as profits, revenues or sales go up or
are expected to go up
– What happens to a new product with few sales?
– Also if there is a recessionary period, sales generally
go down
– If sales go down, advertising dollars also decline
– In this situation, it may be wiser to increase marketing
budget to generate additional market share and sales
rather than letting the marketing budget have less
financial support

Marketing Budgets
• Budget Models
– The percentage method of budgeting does not
necessarily correspond to goal achievement, even
if it worked successfully during a previous period

Marketing Budgets
• Budget Models
• Zero-based Budgets
– A zero-based budget is one where you start with
no predetermined or authorized funds
– In a zero-based budget, each activity to be funded
must be justified - or re-justified - each time a new
budget is evaluated

Marketing Budgets
• Budget Models
– The problem with zero-based marketing budgets is
that the basic concept of the model compromises
consistency, which is essential for long-term success in
marketing
– For most small business owners, zero-based budgeting
means that each marketing expenditure, even though
previously assigned to the plan and marketing budget,
is constantly being re-evaluated and re-justified as the
money needs to be committed

Marketing Budgets
• Budget Models
• Most small business owners find it difficult or
impossible to avoid second-guessing their
previous commitments due to fear or financial
strain of the moment or uncertain
circumstances or any combination of these
factors, most of which are constantly present
in a small business environment

Marketing Budgets
• Budget Models
– Often, therefore, previously committed marketing
activities and associated funding is withdrawn or
reallocated
– This interrupts or even destroys the consistency of
the marketing effort and the chances for success
of the plan as originally conceived

Marketing Budgets
• Budget Models
• SWAG Budgets
– SWAG is defined variously as everything from "super
wild ass guess" to "sophisticated wild ass guess" to
"scientific wild ass guess" to "silly wild ass guess“
– Regardless of your preferred definition, please note
the common words in all the variations
– SWAG budgets are anything BUT scientific
– Usually, these budgets are based more of emotional
beliefs, perceptions, misperceptions and comfort
levels
– Rarely and only accidentally do SWAG budgets have
any relationship to success in achieving one's goals

Marketing Budgets
• Budget Models
• All-you-can-afford Budgets
– In this method, the budgeter looks at the funds
that remain after all other budgets have been
developed
• Whatever is left over is spent on marketing
– This is usually a model for disappointment and
failure of the marketing plan because marketing
has already been determined to be of relatively
low importance and priority to the business

Marketing Budgets
• Budget Models
• On-the-fly Budgets
– This is the most common method for assigning
marketing costs in most small businesses -
particularly in private practice healthcare
• It is also the most consistently unsuccessful

Marketing Budgets
• Budget Models
• On-the-fly Budgets
– On-the-fly budgets are not really budgets at all
• Marketing expenditures are determined on a case-by-
case basis as a marketing opportunity is identified
• There is no real plan, no strategy - just reactive,
spontaneous behavior
• It is not difficult to understand why the margin for error
is so high and the odds of success so low with this
method

Marketing System

Marketing System
• The quality of implementation of a marketing
plan is certainly as critical as the quality of the
plan itself to the chances for a successful
outcome

Marketing System
• While the success formula here may not
exactly correspond to the Thomas Edison
quote that "Genius is 1% inspiration and 99%
perspiration," it is clear that effective
implementation of a well conceived marketing
plan is at least half the battle
– Dramatic differences in the outcome of similar or
identical marketing strategies and plans, executed
in similar or identical situations, reinforces this
reality

Conclusion
• Like so many other business processes,
marketing implementation is far more
successful when a practice executes a solid
marketing plan with the support of a
structured system

Additional Information
• Fred J. Tyson
• 239-201-9587
• ftyson@comcast.net

What Makes a Good Health Care Marketing Plan

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