What is Your Approach to Marketing Leadership? Part 2

Marketing orientations differ across hospitals and health systems for a variety of reasons - culture, philosophy, strategy, even knowledge or understanding of the marketing discipline.  One approach is not necessarily “right” where another is “wrong” – what is important to understand is that each path requires a specific configuration of core competencies, staff capabilities, processes and investments aligned to organizational vision, strategy and business objectives in order to produce results. Misalignment occurs when management wants to achieve significant improvements in strategic growth, for example, but has a production-oriented marketing operation.

Which of the following best describes your organization's approach to marketing management?

Product-driven

A product-driven marketing orientation assumes that as long as a health system has excellent outcomes and a top notch safety record, business will find its way to the front door. Performance improvement, leading edge clinical technologies, physician talent and development of clinical centers of excellence are core areas of focus. Awards and recognitions (such as “Top 100” designations) reinforce the organization’s quality achievements. Physician influence trumps consumer choice. The clichéd expression “build it and they will come” is an entrenched belief, as it the assumption that clinical quality alone will create competitive advantage.

Sales-driven

Sales-driven health systems primarily view marketing as a tactical tool or set of tools to drive volume to clinical services or programs. Filling beds, getting appointments, and securing contracts are primary goals. Consumer promotions, physician referral development and managed care contracting are core capabilities. The focus is on more volume for existing services. These are all good things, but a purely sales-driven organization may miss opportunities to discover new niches, create new products and lines of business, or enhance points of differentiation that grow overall revenue potential.

Market-driven

Market-driven organizations place greater emphasis on market research to better understand customer needs and discover market opportunities that can be addressed in unique ways. Designing and developing services, programs and access points to attract key customer segments are priorities for the marketing operation, making R&D a core competency requirement. Marketing planning is more strategic than in sales-driven organizations, encompassing segmentation and targeting, product positioning and design, pricing, promotion and channel strategies – and is a more integrated process through which value is created. Because growing overall market potential and profitability is as important as growing market share, marketers must have a strong P&L mindset.

Relationship-driven

Relationship or customer-driven organizations place significant emphasis on mass customization as a competency to create one-to-one relationships, enabled by sophisticated, enabling CRM technology that recognizes, supports and delivers customized messages, offerings and solutions for valued customers. Today, some of these capabilities are embedded in call center and CRM systems, but new advancements, such as the widespread implementation of electronic health records and growth in social media communities offer health systems unprecedented opportunity to better understand and predict the needs of patients and customers – and proactively design the marketing strategies, tactics and programs that stimulate and drive demand.

There is one more position to consider: the MARKET- DRIVING organization. Market-driving companies are those that re-set the rules of competition through value innovation – radical, disruptive moves that create new markets, transform customers into fans, and build such distinct points of competitive advantage that they are difficult to duplicate. Think Apple, which sold 1,000,000 iPads in less than 30 days from the product launch. Innovation is the core competency – and success comes from developing deep insights into core human desires, discovering unmet needs, and bringing creative, profitable ideas to market.

Who are the market-DRIVING health systems?

Is that YouTube soundtrack legal?

Seems all it takes these days to video-publish is an idea, a Flipcam, editing software and the right theme song. Before you upload, remember that publishing a video with copyrighted music requires a license for the song.

Beginning June 29, 2010, music licensing company Rumblefish will allow users to buy a license to a copyrighted song for $1.99. However, this new service, Friendly Music, can be used only for noncommercial purposes — any commercial use requires a different license.

Taking a minute out to check the rights on your video soundtracks is a good idea.

What is Your Approach to Marketing Leadership? Part 1

Marketing departments emerged in health care organizations in the early 1980s when prospective payment methodologies made it evident that certain clinical programs were more profitable than others. Hospitals began to compete for patients for those services and procedures that produced better financial outcomes. Many of these early marketing programs were administered by existing public relations or community relations functions, and had a strong communications focus. Over the next two decades, marketing practices matured to include other aspects of the discipline such as research, sales and referral development, segmentation, product development and brand building.

Today, marketing management systems differ significantly across health care organizations. Some are expansive, core business functions with strong growth accountabilities aligned to strategic planning, business development, clinical operations and financial management initiatives. ROI expectations center on overall growth, profitability, brand equity and creation of sustainable competitive advantage.

In other health systems, marketing is configured more functionally to support the development and deployment of marketing tactics aimed at research, promotions and sales. Success is measured by research metrics such as increased consumer awareness and preference, by response metrics such as increased call center or web traffic, and by sales metrics such as referrals, ER visits and procedure volumes.

Some hospitals, however, have not evolved at all from those early days when marketing relied on a narrow set of tools (e.g. press releases, health fairs, advertising, newsletters) to promote programs and services. The marketing department orientation is production – number of news releases, advertising campaigns, circulation – making it difficult to link marketing expenditures and activities to business outcomes.

Why such a difference? It can largely be explained by an organization’s approach or orientation to the market which is shaped by a variety of factors including strategic focus, growth objectives, culture or even leadership understanding of the marketing discipline.

In an upcoming post, I'll describe different marketing orientations and the configuration of competencies, staff capabilities, processes and investments that are characteristic of each.

Your Brand is What You Do; Not Just What You Say You Do

In this brief and well-articulated essay (Make Your Product Work for Your Brand, CMO Strategy), author Steve Beck (VP Strategy, Organic) drives home the point that brands today are built more powerfully through the experience that consumers have with your product or service. 

One of my favoritie quips, "It's not McDonald's saying their food is healthy, it is McDonald's putting healthier food on the menu. In the past, the whole world of positioning was really simple. You targeted an audience, articulated a promise and then communicated the heck out of it. You created advertising. Today everything is an advertisement -- starting with what it is you are selling."

Brand experience doesn't happen by accident; it happens by design.

Global Consumer Confidence Rebounding

Global consumer confidence in the first quarter of 2010 rebounded to reach its highest level since the third quarter of 2007, providing the most definitive sign that the world is beginning to recover from the recession, according to the latest edition of the Nielsen Global Consumer Confidence Index. As the world’s consumers started to spend again, they drove the global index up to 92 points (100 = average) in the first quarter. This represents a six point increase from six months ago and only two points short of the 94 point index mark in Q3 2007, just prior to the decline into world recession. Consumer confidence hit an all time low of 77 index points in early 2009, following the collapse of the international financial system, before steadily increasing again last year.

Nielsen’s Global Consumer Confidence Index tracks consumer confidence, major concerns and spending intentions among more than 27,000 Internet users in 55 countries. In the latest round of the survey conducted between March 8 and March 26, 2010, consumer confidence in many markets rebounded to pre-recession levels of late 2007 and early 2008. Additionally, over the past year, the number of global consumers who believe they are currently in recession dropped 19 points to 58 percent, compared to 77 percent a year ago.

That's the good news.  The report, however, also highlights the disparity between East and West - the pace and extent of economic recovery is greatest in Asia Pacific and Latin American countries and, although better, still sluggish in the U.S. and western Europe, largely due to higher unemployment rates.

“Americans are still extremely cautious about spending given the uncertain nature of the recovery in the U.S. and the continued level of high unemployment. They remain committed to managing controllable costs such as gas and utility bills, and they continue to focus on repairing their balance sheets,” said James Russo, Vice President, Global Consumer Insights at The Nielsen Company. “That said, they are expressing a desire to spend more on discretionary items such as out-of-home entertainment, apparel and vacations—a noticeable shift in this survey. A huge opportunity exists for manufacturers, marketers and retailers who know how to reach the right consumers in the most effective way.”

Get the full report - click here.

Patient Experience Starts with the Hiring Process

It’s 6:45 am on a Sunday morning and I’m sitting in an airport waiting on a Southwest Airlines flight to Chicago. The flight is running a little late, and bleary-eyed passengers bemoan the extra half hour of sleep they could have had. Meanwhile the Southwest gate agents, who look much too rested and energized for such an early hour, begin the lighthearted banter for which they are known. Pretty soon, the delayed passengers are laughing at their goofy repartee of corny jests and bad-rhythm rap. Once on board, the pilot apologized for the delay and joked that he’d just had a low-carb, high energy drink to help get us there in record time.

While some might see these gestures as silly, they are part of the airline’s legendary culture – one that turns customers into loyal followers. Southwest’s vigorous hiring process assures they have a better than average track record of selecting good-natured individuals that love to serve others but don’t take themselves too seriously. It makes for a great customer experience on an otherwise no-frills aircraft.

With all the talk about customer experience in health systems today, I wonder how many organizations have hard-wired their HR systems to weed out those applicants who just don’t have customer service in their DNA. Why try to train the surliness out of people that shouldn’t have been hired in the first place?

So many of our healthcare employees truly enjoy serving patients and customers, and do so admirably – often under trying circumstances. But those that don’t, hijack your brand – and break the covenant of trust between the brand and customer. That’s a marketing problem.

Matching Social Media Tools to Your Strategy

The CMO's Guide to the Social Media Landscape

Strategy first is the mantra when it comes to social media tools for brand building, marketing, customer engagement, search engine optimization and more. Dean Whitney of Dean Whitney Interactive put together this guide which provides insight into the effectiveness of various social media tools against specific goals.

The CMO's Guide To The Social Media Landscape

View more documents from Dean Whitney.

Top 10 in 2010: Ten Forces Framing Strategic Discussions for Healthcare Leaders

By any account, 2009 was a watershed year in which politics, the economy, public sentiment and the media all played a significant role in framing a new environment for health care over the next decade. With tumultuous challenge to the first significant overhaul of our nation’s health care system since the introduction of Medicare in the mid-1960s, health systems are still trying to determine the likely impact of payment reform initiatives on health system strategy. Here is a round-up of the most significant market forces that will shape strategic discussions over the next year, and most likely for the foreseeable future.

Top 10 in 2010: Ten Forces Framing Strategic Discussions for Healthcare Leaders

View more documents from Karen Corrigan.

Click here to download the full article.

Marketers Shifting Resources to Support Social Media Marketing

Seems like marketers everywhere are reallocating budgets and restructuring marketing and public relations teams to embrace social media marketing. The implications are big - and require a thoughtful approach to redesigning the marketing operation in order to reinvent our approach to engaging consumers . . . How are you addressing this in your health system?

This article from UTalkMarketing.Com describes the shift:

Businesses Own Their Audience Through Social Networks, Not Traditional Paid Ads

Business marketing teams are switching from paid ads to social networking advertising in 2010 to gain more control because… well, they can.

Marketers shelled out more than $1.2 billion on social networking advertising last year, and that figure will only rise – to $1.3 billion this year – as advertisers aim to leverage their existing social media infrastructure in 2010, according to a new report from eMarketer.

In its social media outlook, the research firm found that advertisers plan to devote their social media resources this year on maintaining their social networks rather than growing them through paid ads. Many marketers made the investments last year in creating fan pages on Facebook, running ads on MySpace and developing the overall strategy for social media, said Debra Williamson, the eMarketer senior analyst who wrote the report. Now, they’ll look to nurture those audiences.

This shift points to a broader philosophical change, as marketers create their own audiences, rather than rent them. Brands want to invest money in building out audiences rather than just renting through TV, radio and magazines (the old way.) Example … Pepsi pulled out of the Super Bowl after 23 years to develop its own audience through its Pepsi Refresh Project online.
Marketers are looking for better ways to quantify and measure social messaging that surrounds their brands is a summary of what Williamson said. “Whenever you do a paid online campaign, you guess or estimate how many impressions you are going to get, and now they are trying to figure out how much earned media they’ll get,” she said.

Marketers are eager to apply metrics to Facebook posts, Twitter comments, viral marketing and others times and areas when and where people share or interact with a brand online, even if it’s as simple as a consumer replying to another consumer with a brand recommendation. A number of firms track and analyze earned media, such as Listen Logic, Converseon and Networked Insights.

Brands also want to understand how social media eafects the rest of a marketing plan.
“They’re realizing you don’t have to track every single metric, but you should track the ones that make sense for your business,” Williamson said. “If you want to use social network marketing for branding, then you’re going to follow different metrics in terms of whether they are looking at your fan page or passing along to friends. But if you’re looking to do a promotion, such as downloading a coupon and getting a discount at a store, then the metrics are getting better to understand that, too.”

When marketers do spend money on social media this year, they’ll be opening their wallets for Facebook with its 350 million worldwide users. Facebook spending in the United States will jump to $450 million this year, up 34% from $335 million last year.

Read more at Businesses own their audience through social networks, not traditional paid ads.

To Sell or Not to Sell: a Guide for Orthopedic Practices Eyeing Deals With Hospitals | Business and Financial

From Becker's Hospital Review

Orthopedic surgeons contemplating turning over their practices to their local hospital may view such a deal as a way to lock in lifelong profits while saying goodbye to all of the administrative hassles of managing a practice. But seller beware: If money is the primary motivator, the strategy could well backfire, according to physicians who have entered into such deals. Some orthopedic surgeons interviewed say they are satisfied with deals they struck with their local hospitals and would do so again if given a chance. There are others who prefer to remain independent. But all agree that such deals are not get-rich-quick schemes, nor do they come without significant compromises and complications. That means surgeons should think long and hard about what they want to gain from aligning with a hospital before making the leap. They should also engage legal and financial experts to help make the most of the relationship, say those who have been through the process.

Read more at: To Sell or Not to Sell: a Guide for Orthopedic Practices Eyeing Deals With Hospitals Business and Financial

The New Consumer Frugality

What does this mean for health providers?

Retailers must adapt to the enduring shift in U.S. consumer spending and behavior, according to a new Booz & Company survey of buying habits.

A new survey of 2,000 U.S. consumers, the second issued by Booz & Company since the early days of the recession in October 2008, confirms that a “new frugality,” born of the Great Recession and evidenced by two consecutive years of declining per capita consumption, is now becoming entrenched among U.S. consumers and is reshaping their consumption patterns in ways that will persist even as the economy starts to recover.

A new frugality, characterized by a strong value consciousness that dictates trade-offs in price, brand, and convenience, has become the dominant mind-set among consumers in the United States — and probably in other wealthy countries as well. Two-thirds of American shoppers are cutting coupons more frequently, buying low price over convenience, and emphasizing saving over spending. Per capita consumption expenditure has declined across demographic groups. Consumer sentiment remains weak. These trends are not going to change, no matter the pace of economic change.

Annual consumer surveys conducted by Booz & Company during the past two years suggest that the deep and prolonged nature of the recession, in conjunction with longer-term trends — such as ongoing shifts in the share captured by retailers’ private labels and the greater online research shoppers do before going to the store — has hardened changes in consumer spending and behavior. Even as a slow recovery is under way, it is becoming clear that consumers are not going to step up to store counters with pre-recession alacrity. Marketers and retailers that wait for them to do so are taking a major risk with the futures of their companies. And as consumer demand returns, it will likely center on a different mix of price points, brands and private labels, and retail formats than prior to the recession.

Read more at strategy + business: The New Consumer Frugality (by Matthew Egol, Andrew Clyde, Kasturi Rangan)

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Time-starved Consumers Seek ‘Brand Butlers’

The convergence of consumers with limited time and the ease of providing mobile online services is creating a new class of service-oriented “brand butlers,” according to consumer insights firm trendwatching.com. Trendwatching.com defines brand butlers as brands that focus on assisting consumers to make the most of their lives, as opposed to the traditional branding model of selling consumers a lifestyle or identity.

Although trendwatching.com identifies the growing sophistication of mobile online services as crucial to the development of brand butlers, the company advises that offline services such as permanent or pop-up branded spaces and lounges tied to a specific event (music festival) or location (airport) can qualify as brand butlers. Trendwatching.com also advises that brand butlers go above and beyond top-quality products and services, so providing excellent customer service is not enough on its own to become a brand butler.

Learn more about their 8 key brand butler categories at Time-starved Consumers Seek ‘Brand Butlers’

President Signs Health Care Reform Act; Now What?

This week, President Obama signed into law the most significant social legislation since the 1960s. The Patient Protection and Affordable Care Act (H.R. 3590) extends health insurance coverage to 32 million uninsured Americans ― at a cost of $940 billion over the next decade. The legislation ensures that by 2014, nearly all Americans will be required to be insured, and by 2016, the majority of the uninsured (30 million people) will be covered.

To do this, the legislation expands Medicaid to cover families making as much as $88K a year. It also creates state-supervised exchanges to expand coverage access to individuals and small businesses. Other goals of the legislation are to improve affordability and accountability, crack down on waste, fraud and abuse, and ensure fiscal sustainability.

What Didn’t Get Passed? There is no government-run insurance plan. People can buy coverage through the state exchanges, but these will be private, nonprofit plans.

How does this impact the major health care players? Some of the key tenets are described below:

• Extending Coverage for all Americans – On one hand, it is believed that the bill will benefit hospitals because more people will have insurance and hospitals will have to provide less charity care, which should result in fewer ‘write offs’ and a reduction in bad debt. However, expanded Medicaid enrollments could be a mixed blessing because Medicaid often pays hospitals less than the actual cost of care.


• Improving the Quality and Efficiency of Care – It provides incentives for doctors, and hospitals that improve quality while providing for better coordination that helps to reduce harmful medical errors and healthcare-acquired infections. The bill will also provide payment reforms so providers are rewarded for the quality of care they provide, rather than just additional tests or treatments. And it rewards innovative practices where doctors and nurse practitioners provide more primary care that is coordinated with every doctor or specialist involved with a patient’s care.


• Focusing on Prevention – This legislation will promote prevention, wellness, and the public health and provides an unprecedented funding commitment to these areas. It directs the creation of a national prevention and health promotion strategy that incorporates the most effective and achievable methods to improve the health status of Americans and reduce the incidence of preventable illness and disability in the United States. It increases prevention and wellness services for Medicare beneficiaries by waiving co-payments for most preventive services and by fully covering an annual wellness visit and personalized prevention plans for American seniors on Medicare.


• Expanding the Healthcare Workforce – The act will fund scholarships and loan repayment programs to increase the number of primary care physicians, nurses, physician assistants, mental health providers, and dentists in underserved areas of the country. With a comprehensive approach focusing on retention and enhanced educational opportunities, the Act combats the critical nursing shortage. And through new incentives and recruitment, the Act increases the supply of public health professionals so that the United States is prepared for health emergencies.


• Transparency and Program Integrity – Doctors with financial interests in imaging services, like MRI services, must inform the patients in writing that they can obtain the recommended imaging service from a person other than the referring physician, and provide a contact list. The Act also requires all drug companies, device, and medical supply manufacturers to fully disclose and report any gifts they make or financial arrangements they have with doctors, a physician practice or group. Providers enrolled in Medicare, Medicaid and CHIP programs will undergo increased scrutiny for new compliance requirements. The bill calls for increased governmental auditing and revenue oversight requiring providers to become more efficient and accountable for utilization, quality and cost of care.


• Funding the Program -- Funding for the landmark legislation will come from a variety of initiatives, including increased Medicare taxes for high-income individuals and an excise tax on insurers offering high-premium plans. In addition, hospitals agreed to help pay for the costs of the legislation and will contribute $155 billion over 10 years, primarily through lower Medicare payments. Health systems will also see reduced disproportionate share funding payments and cost-saving provisions resulting from program cuts for high-cost, less efficient hospitals in high cost markets. Moody’s Investors Service speculates that not-for-profit hospitals will struggle with reimbursement and efficiency pressures under health care reform legislation, triggering spending cuts, mergers and changes to revenue streams.

Most of the initiatives won’t take effect until 2014; however, the time for health systems to address both short and long term implications of the legislation is now.

Coming next: What to Expect from Industry-Leading Health Systems

Study Reveals Majority of Young Women Go On-line First with Health Questions

A February survey conducted by Harris Interactive on behalf of iVillage found that women heavily rely on the Internet as a health resource before turning to a family member or visiting a doctor. Anonymous peer networking and sharing common experiences is what drives women online for health matters, with 4 out of 5 (82%) saying there are reasons to feel uncomfortable when discussing health concerns or questions with friends or family members. Over half of women (59%) said that discussing health concerns with people they know can be embarrassing.

Click here to read more at HealthLeaders Media Marketing Weekly.