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The Essentials of Marketing Anthony Cirillo, FACHE, ABC www.4wardfast.com Especially for The Missouri Health Care Association August 27, 2008
The Essentials of Marketing
Anthony Cirillo, FACHE, ABC
www.4wardfast.com
Especially for The Missouri Health Care Association
August 27, 2008
50 Ways to ROI
“…a set of processes for creating, communicating and delivering value to customers and for managing customer relationships in ways that benefit the organization and its stakeholders.”
What is Marketing?
What is Marketing?
Company Capabilities Customer Wants
Marketing
Consider…
• 69% people interested in products that block ads
• 65% want limits and regulations
• 65% constantly bombarded with advertising
• 64% concerned about practices and motives
• 61% say don’t treat with respect
• 61% amount of advertising is out of control
• 60% much more negative about advertising
Source: Yankelovich Partners
Marketing 101
Sometimes we know what to do but we don’t do what we know.
What marketing isn’t.
• Marketing is not advertising.
• Marketing is not promotion.
• Marketing is not sales.
Marketing is not new!
Peter Drucker
“It is the customer who determines what the business is. For it is the customer, and he alone, who through being willing to pay for a good or service, converts economic resources into wealth, things into goods. What the business thinks it produces is not of first importance—especially not to the future of the business and to its success. What the customer thinks he is buying, what he considers ‘value,’ is decisive.”
1954
Marketing Mindset
• Walk in your client’s shoes.
• Understand different buying behaviors.
• Know different needs mean different markets.
• Be market-focused, not product-focused.
• A successful product is one that sells.
• Consider the “whole product”.
• See the big picture.
Marketing Mindset
Walk in your client’s shoes.– Understand what they want, rather than what you
want.– See things their way.– Feel their pain.
Marketing Mindset
Understand different buying behaviors.– Different people buy at different times.– How many of you had a DVD 10 years ago?– How many still don’t have one?– How about a CD player?– Anyone still have 8-tracks?
Marketing Mindset
Know different needs mean different markets.– McDonald’s
• Happy Meals• Playgrounds inside and out• Food you eat with your hands• Toys• Ronald• Color
Marketing Mindset
Be market-focused, not product-focused.– Coca Cola and New Coke
Marketing Mindset
A successful product is one that sells.– Microsoft probably doesn’t make the best product.– SONY Betamax was a better product than VHS.– It’s marketing!
Marketing Mindset
Consider the “whole product”.– What is your favorite restaurant?
•Food?•Ambiance?•Service?•Location(s)?•Price?•Reputation?
Marketing Mindset
See the big picture.– Not your big picture, your customer’s!
• Where do you fit in?• In what context?• Are you a priority?• If you are not a priority, what is?• Is there any relationship between you and what
the priority is?
Keep in Mind
• Viewed as an investment.
• It’s OK to play in other people’s sandboxes.
• Marketing is not just the marketing department.
• Every touchpoint is a market opportunity and brand builder.
• Need to stay on course despite obstacles.
The 5th “P” of Marketing
• Product, Price, Place, Promotion
• PERMISSION
• Enter into a dialogue
• Create communities
• Build brand
• Build loyalists
Marketing Plan
• Tied to organizational goals
• Based on sound data
• Developed by the marketing department in conjunction with other key personnel
• Achievable goals
• Measurable results; continuous feedback
• Time sensitive with assigned responsibilities
The Preliminaries
• The Executive Interview
• Mission / Vision
Your mission is what you do best every day, and your vision is what the future looks like because you do that mission so exceedingly well.
Federal Express: “Peace of mind”Nike: “Authentic athletic performance”
CORE IDEOLOGY ENVISIONED FUTURE
Core Values 25-Year
Elevation of the Japanese national culture and status. Being a pioneer—
not following others, but doing the impossible. Respect and
encouragement of individual ability and creativity.
Become the company most known for changing the worldwide image of
Japanese products as being of poor quality.
Core Purpose Vivid Descriptions
To experience the sheer joy of innovation and the application of
technology for the benefit and pleasure of the general public.
We will create products that become pervasive around the world. … We
will be the first Japanese company to go into the American market … Fifty years from now, our brand name will be as well known as any on Earth. … and will signify innovation and quality
that rivals the most innovative companies anywhere. … “Made in
Japan” will mean something fine, not shoddy.
Who is it?
The Preliminaries
Gathering and Interpreting Environmental Data
Start with organizational history and perceptions
What’s Your History?
The Preliminaries
Gathering and Interpreting Environmental Data
Competitor Analysis
- the questions- the sources- the template
The Preliminaries
• Trend spotting
• Core services; service diversification
• Market share
• Facilities
• Strategic Plan
• Service Area
• Key Audiences
• Employees• Referring Physicians• Discharge Planners• Politicians• Clergy• Business• Volunteers• Service Organizations• Fundraising• Emergency Medical Services• Media• Support Groups• Affinity Groups• Unions• Payers• Financial Institution• Government• Vendors• Residents• Community• Families and Caregivers
The Preliminaries
• Physicians
• Resident / patient advocates
• Influencers
• Alliances and Partnerships
S.W.O.T
• Not a to-do list but a guide to strategy
• Definitions
• Focus on key factors and competitive advantage
• Internal factors: organization, customers, competitors
• External Factors: competitive environment, economic, political/regulatory, societal
Not swat; SWOT!
Reality – Often Unaligned
Of the 12, highest were:Marketing Clinical Centers of ExcellenceOrganizational Branding StrategyPhysicians and Referral Source Marketing
Of the 12, lowest were:Retention of nursing staff and other staffMarketing to culturally diverse populationsPreparing for the threat of bioterrorism
AHA CEO Survey, 72% of CEOs rank labor and staffing as top priorityAHA CEO Survey, 72% of CEOs rank labor and staffing as top priority
Healthcare Marketing Leaders’ Perceptions Regarding the Impact of Select Healthcare Trends on Current and Future Strategic Plans. SHSMD and the Ohio State University School of Medicine.
A Dose of Reality
“Complex analysis and ROI calculations will either be automated or performed by analytical experts to keep marketers focused on their core competency.”
Marketing ROIJames D. Lenskold
Why we’re hesitant!
“Post-Statistics Stress Disorder”Sam Savage – Stanford University
A Dose of Reality
38% of companies measure marketing
16% of executives at companies that measure are dissatisfied with marketing efforts
28% of executives at companies that don’t measure are dissatisfied with marketing efforts
Marketing Professors
“If You Don’t Measure You Can’t Manage”
Patterson
11/23/04
A Dose of Perspective
American companies are obsessed with window dressing, because they’re reluctant, no, afraid to look at whatever it is they really do and evaluate it from the inside out. When things are down, CEOs look to consultants and marketers to re-think, re-brand or repackage whatever it is they are selling, when they should be getting back on the factory floor, into the stores or out to the research labs where their package is actually made, sold or conceived.
Douglas Rushkoff“Get Back in the Box”
Filter to Focus
What do the numbers say?
What does the “C” Suite say?
What does the marketplace say?
Apply additional criteria, rank, marketing plan, marketing audit
Marketing Audit
How well is the Marketing / Communications function supporting the System’s major objectives?
“Surgical strike”
Comprehensive Audit
Steps1. Environmental Assessment2. Executive and Board Interviews3. Referral Source Interviews4. Staff Interviews and Shadowing5. First Review of Campaigns and
Services6. Focus Groups – Internal7. Focus Groups - External8. Key Constituent Interviews9. Futurescan, Political and
Competitive Environment10.Focused Review of Programs,
Services and Staffing
Marketing Audit
Go back and review: • What stays as is? • What stays but is modified? • What is deleted? • What is added?
Staffing: • Appropriate number• Appropriate skills• Train, hire, outsource• Organizational Chart
U.S.P.
Not
“What do your residents say that makes you unique?”
But
“What do we want to do in our business that's different from everyone else?”
U.S.P.
“Injury-free yoga”
U.S.P.
“Dominos Pizza. In 30 Minutes or It's Free! ”
U.S.P.
Unique Selling Proposition (slogan)“Growing Market Share by Leveraging Loyalists”
Unique Selling Proposition (abbreviated)We work with CEOs who want to grow market share and cultivate
customer crusaders for lifetime loyalty.
Unique Selling Proposition (expanded)We help CEOs grow market share and cultivate customer crusaders
by developing strategic marketing plans with innovative solutions designed to capture the attention and improve the lives of those they
serve and earn their lifetime loyalty.
U.S.P.Subway—7 subs with under 6 grams of fat.
Federal Express—When it absolutely, positively has to be there overnight
Dominos Pizza—30 minutes, or it's free!
Real Estate Agent—Specializes in just 250 homes in the Milford area.
9Second.com—Search Engine Positioning without geographical conflict of interest.
Video Easy—Get it first, or get it free. (Note: They're talking about getting videos when you walk into the store.)
Biz Tactics.com—Marketing books you can read in 30 minutes or less.
Hardware Store—Only 3% mark up on wholesale prices.
Law Firm—House conveyancing for a flat fee of $1,000. No hidden costs.
Indian Restaurant—100 Dishes to choose from if you don't fancy butter chicken.
Herbal Smoke Away—Money back if you don't give up smoking in just 7 days.
U.S.P.Uniqueness has to be invented.
Look at your business like you were a surveying your kingdom.
Make this big, warm wish for your royal subjects.
If you could, what would you do differently?
Then do it.
And once you've got it right, announce your uniqueness to the world.
Obviously: find out if your competitor does the same? And does your competition stress their uniqueness?
If No, proclaim your uniqueness to your customers.
If you're the first one to announce it, you own it.
Market Position and Positioning Statement
“If you don't care where you're going, it doesn't make a difference which path you take."
Market Position
A market position is the cold-hearted, no-nonsense statement.
“XYZ nursing home is perceived as the facility that serves the poorest, most frail population.
In a three nursing home market, it ranks first in market share and third in patient satisfaction.
It is known for good care but does not stand out among the leaders for offering exceptional services.”
Positioning Statement
• who you are• what business you're in • for whom (what people do you serve) • what's needed by the market you serve • against whom do you compete • what's different about your business • what unique benefit is derived from your services
Positioning Statement
We are a force for discovery, turning students into thought leaders who will shape the world of their future.
Our work has impact, improving the economic, social and cultural health of the communities it serves.
We teach in a context that encourages the creation of new knowledge.
Marketing Vision
Some questions to ask:
Where can marketing have the most impact?
Do you first have to win respect of the C-Suite to accomplish your goals?
Elevate the Function
Draft a vision of your own.
“To reap marketing ROI, the cost of entry is a good marketing plan.”
Marketing Professors “Six Ways to Increase Marketing ROI”
Jedd8/17/04
Marketing PlanGoalGenerate 10% increase in new patient volume from Women Center members
StrategyGenerate 38 appointments, 6 inpatient admissions and 15 outpatient procedures from members who switch from a non-Hospital PCP to a Hospital PCP. Generate $31,314 in net revenue.
FormulaNumber of Members 4,000Members with physicians 3,800Members with non-affil docs 760Switch 5% to Hospital doc 38
Inpatient 6 Outpatient 15 Gross $58,728 Gross $5,400 Net $28,674 Net $2,460
Strategies and Objectives
Goal: to become the #1 provider of rehabilitation services in the area
Strategy: build a new rehabilitation centercreate customer experiences to rememberrecruit key physiciansappoint physician leader and department leaderdevelop key press relationsgrow the physician referral networkleverage existing patient loyalistsdifferentiate ourselves from key competitors
Strategies and Objectives
Goal: to become the #1 provider of rehabilitation services in the area
Strategy: build a new rehabilitation center
Objectives: build stand alone building connected to main facility; squarefootage; number of rooms; budget; in order to increase capacity from xx to xx
Actions: select architect by xxx and process; select general contractor and process; market research to gauge customerneeds (physicians, staff, patients); blue print; groundbreaking; completion; opening
Strategies and Objectives
Goal: to become the #1 provider of rehabilitation services in the area
Strategy: create customer experiences to remember
Objectives: to increase patient satisfaction from x to y; measure word of mouth marketing to establish a baseline for future research;
Actions: audit the customer experience; implement a CRM database; enhance web site to aid in information collection; post phone call to gauge word of mouth marketing and reach
Strategies and Objectives
Goal: to become the #1 provider of rehabilitation services in the area
Strategy: recruit key physicians
Objectives: expand physician base from x to y; recruit a renowned rehabilitation physician
Actions: specific marketing tactics; human resources strategy; topleadership strategies
Strategies and Objectives
Goal: to become the #1 provider of rehabilitation services in the area
Strategy: develop key press relations
Objectives: to increase positive local coverage by a certain frequency; toplace three stories nationally in popular press; cited in research journals x amount of times; author six key articles for trade journal publication, one of which is Provider Magazine
Actions: press introductions and local tours; press tour of national outlets; hire staff writers to assist in journal submissions; develop a two year topic list
Strategies and Objectives
Goal: to become the #1 provider of rehabilitation services in the area
Strategy: grow the physician referral network
Objectives: increase referrals from current physicians from x to y; convert 50 percent of non-referrers to referrers; identify at least two other currently non-existent referral sources
Actions: run statistics and plot strategy; appoint physician liaison; draft marketing plan for each referral source
It all Starts with IT!
Data is the key.
Before you campaign, have database ready to track results.
Tie to hospital financial system, call center, web.
Sort robustly: By lead potential, by life events, by influence, by medical category, hospital use, revenue overall, revenue per episode, service preferences, physician affiliation, general interests, etc.
Follow-up activities documented and captured.
Garbage in Garbage Out
Measure the right things.
Process versus Outcomes.
Limit the number.
Don’t have more than you need.
Make them easy to understand.
Never lose sight of how the data you measure is navigating you to the objective.
Quality Metrics Enable Marketing's Ability to Influence Strategic Directionby Laura Patterson, September 18, 2007, Marketing Professors
The Right Stuff!
Examples: • market share change• specific volumes, net revenue, profit• payer mix• satisfaction level• top-of-mind recall• preference• referral sources and volumes• physician satisfaction levels• reputation/image• tactical / process: direct response, event attendance
Build ROI Mechanisms into Campaigns
Web• specific url for each campaign
• organic search optimization – keywords / tags match common/preferred search terms of the surfer
• web copy and keywords aligned
• linking strategies and partnerships
• shift advertising $ - WebMD; AOL Health; Regional
• online chat for immediate feedback and response
Build ROI Mechanisms into Campaigns
Direct Response• Coded by group
• Test and fix one thing at a time
• Letter with teaser on the outside; one without• Vary whom the letter is sent from; Marketing Dept. vs. CEO • Plain envelope with return vs. company stationery• White envelope vs. color envelope• Vary size• Stamps vs. indicia vs. metered mail• Bulk it up
Print• Separate phone numbers for campaigns transparent to user• If not possible, code the advertisements• Test and fix per above – headlines, openings, copy, placement
ROI Process
Gross Margin – Investment______________________
Investment
ROI =
Marketing Investment
Revenue
Costs of Goods Sold
GrossMargin
Return Return
Recovery of
Investment
LenskoldMarketing ROI
Marketing Investment
Upfront and Variable Expenses
Creative development Production and printing Distribution channels Media and delivery Marketing lists Giveaways and discounts Database system development Research tied to the campaign External strategic resources Staff time Associated training Measurement and research studies
Marketing Investment
Does not include
Brand communications
Website unless time for specific campaign is factored
Customer intelligence gathering
Marketing Strategy
Marketing Audits
Marketing to Baby Boomers
M&A Strategic Marketing and Communications
Integrate CRM tools and Continuous Feedback Tools
Customer Service Training
Community Relations
Media Relations
Staff Retention through Empowerment and Brand Identity
Spokesperson Serving as Bridge to Prospects
Questions
Anthony Cirillo, FACHE, ABC
1-704-992-6005
www.4wardfast.com
www.anthonyssong.com
http://sickoh.blogspot.com/
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