Download Essentials of Marketing

The Essentials of Marketing
Especially for The Missouri Health Care Association
August 27, 2008
Anthony Cirillo, FACHE, ABC
www.4wardfast.com
50 Ways to ROI
What is Marketing?
“…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?
Marketing
Company Capabilities
Customer Wants
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
1954
“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.”
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.
Core Purpose
To experience the sheer joy of innovation
and the application of technology for
the benefit and pleasure of the
general public.
Who is it?
Become the company most known for
changing the worldwide image of
Japanese products as being of poor
quality.
Vivid Descriptions
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.
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 Excellence
Organizational Branding Strategy
Physicians and Referral Source Marketing
Of the 12, lowest were:
Retention of nursing staff and other staff
Marketing to culturally diverse populations
Preparing for the threat of bioterrorism
AHA 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 ROI
James 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
Steps
1. Environmental Assessment
2. Executive and Board Interviews
3. Referral Source Interviews
4. Staff Interviews and Shadowing
5. First Review of Campaigns and
Services
6. Focus Groups – Internal
7. Focus Groups - External
8. Key Constituent Interviews
9. Futurescan, Political and
Competitive Environment
10.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”
Jedd
8/17/04
Marketing Plan
Goal
Generate 10% increase in new patient volume from Women Center
members
Strategy
Generate 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.
Formula
Number of Members
Members with physicians
Members with non-affil docs
Switch 5% to Hospital doc
4,000
3,800
760
38
Inpatient
Gross
Net
Outpatient
Gross
Net
6
$58,728
$28,674
15
$5,400
$2,460
Strategies and Objectives
Goal: to become the #1 provider of rehabilitation services in the area
Strategy:
build a new rehabilitation center
create customer experiences to remember
recruit key physicians
appoint physician leader and department leader
develop key press relations
grow the physician referral network
leverage existing patient loyalists
differentiate 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; square
footage; 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 customer
needs (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; top
leadership 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; to
place 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 Direction
by 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
ROI =
Gross Margin – Investment
______________________
Investment
Revenue
Costs of
Goods Sold
Marketing
Investment
Return
Return
Gross
Margin
Recovery
of
Investment
Lenskold
Marketing 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
[email protected]
www.4wardfast.com
www.anthonyssong.com
http://sickoh.blogspot.com/
http://anthonyssong.blogspot.com/