Prioritizing Marketing Resources Key to Achieving Return on Investment Goals - Part 1

For most healthcare marketers, seasonal affective disorder (SAD) comes not in the dead of winter but in the dreaded annual cycle of budget planning.  Hunkered down with plans and spreadsheets, most are trying to conjure up ways to achieve more with less.  Unfortunately, too many end up spreading scarce dollars over too many projects.
When stuck between a rock (the health system's need for profitable growth) and a hard place (the drive to cut costs), how do marketers prioritize marketing investments and gain organizational commitment to those investment decisions?

First, clean house.  Use this opportunity as a time to take a stand and stop funding those activities that have no or minimal impact on strategic growth, customer acquisition, customer retention and financial performance.  Specifically look at non-marketing activities that sap resources and work with your colleagues across the health system to eliminate or move those deeds elsewhere.  Make sure your team is performing at its best; while it's always difficult to move people out, when you are being asked to do more with fewer FTEs, each has to be a stellar performer.

Second, use a marketing resource allocation methodology to prioritize limited marketing resources (dollars and FTEs) to those growth and marketing initiatives that have the best potential for improving business performance and positioning the organization for long-term success.

In prioritizing marketing resource investments, there are three basic decision points:

1. What businesses, clinical programs or market expansion initiatives offer the best opportunity for growth and profitability?
2. Within priority programs and service lines, what strategies and tactical initiatives will best achieve marketing goals?
3. What infrastructure investments will be required to support effective growth and marketing management?

In other words, what will you choose to invest in to drive growth and improve profitability, and what activities and support systems will contribute most to those objectives? Both top-down and bottom-up approaches to resource allocation are necessary; top down for strategic planning across a health system’s portfolio of service lines and market initiatives; bottom up to develop individual marketing budgets within each priority program.

I know that some of the toughest issues marketers face during the long, cold winter of the budget season are cutting others' pet projects, sunsetting outdated communications tactics, navigating the politics of competing priorities, and so on and so on.  Just saying 'no' has not been an option for some;  a marketing resource allocation method can better arm the marketer with data-driven rationale for investment decisions.

Over the next couple of weeks, I'll explore the components and key questions to delve into for each of the three decision points listed above.  In the meantime, let me know some of your toughest budget challenges -- together let's find a way to stop doing more and focus on achieving more. 

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.