Is a marketing strategy really necessary for a medical business?

Is a marketing strategy really necessary for a medical business?

20.01.2016 CJU_admin Latest News

NOT SO LONG AGO, THE ANSWER TO THIS WAS “WELL – IT DEPENDS ON WHAT SECTOR YOU ARE IN”, BUT TIMES REALLY HAVE CHANGED, NO MATTER IF YOU ARE A GP A MEDICAL SPECIALIST OR A CLINIC.

The AMA, The Royal Australasian College of Surgeons and the RACGP now believe that marketing is an essential part of a medical business and include segments on marketing to their members via their starting in private practice seminars.

As exceptional as technical and clinical skills are, they no longer guarantee business success in private practice. The marketplace now has factors that weren’t around 5+ years ago. First and foremost is “Dr Google”, there at a moment’s notice, as a source of information for anyone to access and help in the decision making process.

Recent data from Google stated that 80% of Internet users look for health information online, including 44% who search for information on medical professionals or healthcare facilities.

Here are some examples of actual businesses and their results

Example 1: A GP decides to open a practice. They find premises in a well-known holiday centre in an affluent area. Before opening they engage for the development of a marketing strategy and a competitor review. Research shows the area has a number of long established practices, highlights their weaknesses and identifies untapped opportunities. The marketing highlights the new practice strengths and targets sectors with services not currently provided in the area. The practice is launched and experiences immediate patient numbers followed by progressive growth and demand on services.

Example 2: A specialist business has a highly successful practice. They want to expand and move into another area. The challenge:  The area is saturated with other specialists of this type. They are the new, unknown, unconnected kid on the block. Marketing and planning has always been a key component of their business, they undertake a review to examine:

  • the drivers of their patient base (referrers, influencers, patients)
  • competitors
  • positioning and key messaging

The business is launched and quickly develops, despite the challenges, thanks to a strong marketing plan based on positioning of the practice and a good understanding of their unique marketplace drivers and expectations.

In the above examples, pre planning and marketplace review delivered results – but this isn’t always the case

Example 3: A specialist opens a private solo practice. The specialist is highly trained, has employed exceptional staff and offers a premium service in an aggressively competitive specialty field in an affluent location. Solid marketing activity marketing has been undertaken from the practice opening but has yielded poor results. Why?

It didn’t consider their position as a premium service talking to a sophisticated audience and lobbying against other well established premium competitors.

The marketing gave an inaccurate picture of the practice. It didn’t convey a premium service to gain confidence from referrers or patients. Although time went into a strategy – they missed their mark due to poor execution.

A question we frequently get asked is:

The marketing material was produced in house and on a low budget –  for this practice, a significant flaw. Why?

A question we frequently get asked is: “Do I need really need to spend money on marketing to succeed in my business and how much do I spend?”

There is no black and white answer to this. In essence, your marketing plan needs a budget component that takes into account your overall business goals.

So how do I set a realistic marketing budget for my business?

Set your business goals and know what you want to achieve. Make this based around patient numbers, patient types and cases. If you haven’t set a marketing budget before, there are lots of ideas based around %, but here is a simple 3 step process example to help you get started.

Know your goal:

Step 1

Start with the end result of patient numbers foremost in your mind.
Equate your incremental growth goal into dollars. Over your current annual revenues, how much do you want to increase in the next year?

Step 2

Return on Investment (ROI)
Divide your $ goal by an ROI of 4. Some strategies have better results than others. Overall your goal for your marketing plan should be a return between 3 and 5 to 1. We can use 4 as a middle ground ROI. This is a per annum goal and your matching budget can be broken down into monthly or quarterly increments – but remember that you will usually have the heaviest amount of spend in the early stages of your marketing.

Step 3

Monitor your goal and your budget and keep them aligned. Maintain the ratio between goal and budget if you need to adjust up or down. ie – if you are increasing in growth at a higher rate – you can increase your marketing. Monitor what is effective and adjust it accordingly. Stick to your marketing plan and be aware of your budget spends. It is often the small ad hoc items that start to eat into your budget pie – like distress rate media and promotional items that never formed part of your plan can bleed hundreds to thousands of dollars and are unlikely to deliver results.

Have a goal – make a plan, recognise marketing is a performance based revenue item

Knowing how to communicate  your key points of difference is paramount to growing a successful medical business. Just how you differentiate yourself in the eyes of your patients and/or referrers is key.

While there are a myriad of marketing activities that you can undertake to grow your business, a unique and well-conceived, customised marketing strategy is designed to establish what message and activity will be in-line with your goals and deliver results.

NO ONE KNOWS YOUR STRENGTHS BETTER THAN YOU – BUT SOMETIMES YOU’RE NOT SHOWING THEM! OR – “you can’t sell a secret”

Often, you are so intrinsically involved in every aspect of your clinical offering, staffing and all the other elements of your daily operations that you simply don’t have the time to think top-line about your business. That’s where we can help. CJU is able to look at your business from the outside in. We work with you to get to the heart of your business… and formulate a successful marketing plan.

Have a marketing strategy. The effort or cost that it takes you up front will be well worthwhile and will help ensure your business success.