Putting Market Share in Perspective

Chris Bevolo

A Point of View from Chris Bevolo
For many hospital marketers and their CEOs, market share is the ultimate measure of marketing success. In the “2010 State of the Art” survey highlighted in the last issue of Healthcare Strategy Alert, respondents listed the top area of marketing focus as “increase market share.” When asked to rate “measures of success” however, respondents listed market share third, behind awareness/preference and patient volume, a drop from its first place position in 2005. But this actually may not be a bad thing.

While market share is a critical metric, it’s what I call a relative metric, meaning its value is based on how it compares to other organizations. A competitive comparison is, of course, always treasured by leadership, but it should not be considered the ultimate measure of success. For example, increased market share in volumes for a specific service line doesn’t necessarily ensure increased revenue or margin. To measure these important financial data, using Return On Investment (ROI) would be a better choice.

There also are many variables that lie outside of marketing that can move your share up or down. The capacity of your physicians or facilities, and competitor moves are two of the biggest. The best approach is to identify as many variables as you can, work hard to control for their impact, and be transparent about how much marketing really drives any shift in market share.

Market share should be one of your top metrics, and will likely always be a hot point for leadership. But to demonstrate the true value of your marketing efforts, it’s best to employ a multifaceted approach to measuring success and keep market share in the proper perspective. 

Chris Bevolo is a recognized thought-leader in healthcare marketing and branding. He is a fervent blogger and frequent keynoter on the topics of marketing, branding, innovation, the patient experience, and consumer trends. He is also is the author of two books, “A Marketer’s Guide to Measuring Results” and “A Marketer’s Guide to Brand Strategy.”  Chris is owner, founder and lead strategist of the Minneapolis-based healthcare marketing agency, Interval.

Part 2: Customer Relationship Management - Getting Started

A Point of View from Guest Blogger Les Stern.

So last time I asked you: “What are you waiting for?” in terms of starting a Customer Relationship Management (CRM) program for your organization. And I’m thinking, maybe you just don’t know how to get started.

Getting started means answering three questions.

1. Who in our organization should be involved?

First, you need to sell the concept to everybody. CRM is an enterprise-wide initiative that needs buy in from the highest levels (see last post on the benefits of CRM).  The team that actually selects the CRM vendor should include the following:

• Marketing (to spearhead the process)
• IT (to deal with the data)
• Finance (to ensure all assumptions on ROI, etc. are correct)
• Physician relations (if marketing to physicians is a key strategy)

2. Who should we contact?

Stay away from generic CRM companies that have a technology solution that they claim they can “adapt” to healthcare. Instead, look at CRM providers that offer:

• A database specifically designed for healthcare
• Built in segmentation or modeling that can quickly target the right people for specific campaigns (the ideal target is likely to need the service and be profitable)
• Reports that can easily answer all your questions, from targeting to tracking ROI
• Staff that are healthcare CRM experts
• An easy to use tool, if you do not want the CRM provider to do everything (both options are available)

3. How do we make our decision?

There are several excellent providers, but no one provider is the best choice for everybody. Here are the key steps:

• Initial presentations at your location, focusing on how their solutions can meet your needs. At the initial meeting, if you are planning on using their tool, you may ask for a demonstration. (Note: the companies may ask for a call prior to this meeting so they can get an overview of your organization, your needs, etc.)
• Compile all features and put together a matrix of all features, including pricing, so you can easily make comparisons.
• Check references. Do this early on, so any red flags can be raised early in the process.
• Visit the finalists. Make sure you meet the person who will be your account manager. And go through a case study from beginning to end.
• Make your decision. You will have a lot of information to make your decision. Trust your instincts.

Good luck. Let us know how you do.

Les Stern is president of L. Stern & Associates. He can be reached at info@lsternmktg.com.

Part 1: Customer Relationship Management - What are You Waiting For?

A Point of View from Guest Blogger Les Stern.

Sophisticated customer relationship management systems for healthcare organizations have been around for almost 15 years.  Yet only 15% or so of healthcare providers are using them.

Before we understand the benefits of CRM, let’s agree on what the three key components of a CRM program for healthcare organizations. 

• Capturing data from across the enterprise and consolidating it into a database
• Analyzing the database to determine the best marketing opportunities and the best targets for those opportunities 
• Identifying the return on investment from those campaigns

 Here are the benefits of implementing a CRM solution:

1. It improves the bottom line.  A CRM program allows you to target your efforts on your most profitable customers (consumers or physicians) and people who “look like” your most profitable customers.  For example, if you are doing a promotion for mammographies, CRM will allow you to target women who not only are most likely to need these services, but will also be more profitable customers for you. CRM also can improve your bottom line by lowering marketing expense.  Since you know the best people to market to, you don’t have to spend money marketing to others.
2. It is quantifiable.  CRM allows you to track the return on investment of your programs.  By using control groups, you can measure the impact of the marketing campaign, and counter the objection that “they would have come anyway.”  As one hospital marketer recently told me: “It is a great way to substantiate that marketing decisions are valid, that marketing does move the needle, and that we need to continue to market, even in bad economies.”
3. It enhances relationships (and your brand).  Your CRM program will enable you to send the right message to the right people at the right time, thereby allowing them to take better care of their health.  Programs such as these can boost customer loyalty.
4. It can help you achieve your mission by improving the health of your community.   This may seem counterintuitive, since you may be reducing the number of people to whom you are marketing.  But think about it:  (1) Through targeting, you are sending your messages to the people who most need the services; and (2)  Improving the bottom line will free up resources for charity care and other initiatives to help you better serve your entire community.

So how do you go about setting up your CRM program?  That topic next time.

Les Stern is president of L. Stern & Associates.  He can be reached at  info@lsternmktg.com.