Want marketing to play bigger role? A formal plan can bring action
September 1, 1999 5 minutes read
Want marketing to play bigger role? A formal plan can bring action
Putting together a plan can bring a commitment to action
Parents like to encourage their children to make and keep budgets when they leave home. As a nation, we have expected our elected officials to stop spending into the red and stay within our country’s means. Why, then, do so many physician practices fail to create and stick to a marketing budget?
Vickie Alleman, a senior health care consultant with Horne CPA Group in Houston says that without a budget, practice administrators don’t know what is expected of them. "That makes them tend to overspend," she says. Making and keeping a budget not only keeps you within your means, it also brings focus to practice goals. "When you commit a dollar amount, you increase the chance that you, as a group, will focus on something," says Alleman. "Sitting down as a group and discussing what is important, why, and how to get to your goals is something of a teaming exercise. It encourages a follow-through on specific activities. And in an era where money is tight, a budget also keeps you aware that there are limited resources."
Getting the right group together
To create a marketing budget, Alleman recommends that in a small practice, the owners and administrator of the practice sit down together. In a larger organization, you might have a meeting that includes the chief executive, the chief financial officer, members of the board, and any marketing personnel you have. "These are the people who are going to make something happen," she explains. "The physicians commit the money, and the rest of the group is responsible for the financial health of the organization. They have to know where the dollars are going and approve of it."
Some physicians may object — both to the notion of spending money on marketing and to the idea of taking time out to participate in a budgeting exercise. But Alleman says you can overcome those objections by asking doctors to look at a marketing budget in terms of organizational goals, or strategic planning. "Two physicians in a small practice may have three goals," she says. "And if you don’t quantify how you will achieve them, how will you get there?"
Practices that either don’t have the will to create a marketing budget or that can’t convince the physician owners and other decision makers it’s a good idea often end up doing hit-and-miss marketing.
"You’ll get a doctor saying someone called and asked him to sponsor an ad in a high school yearbook," Alleman explains. "But doing it won’t give you something whose success you can measure. It isn’t effective because it is not likely to be doing anything to get you toward a certain goal. The money you spend has to be attached to a concrete aim."
| Marketing Plan Matrix | ||
| Goals and Objectives | Communications Strategy and Tools | Budget |
| Increase referrals from current referring physicians by 10% in first quarter. | Establish weekly lunch and learns at physician offices for physicians and staff. Office manager to establish contact. | Lunch: $75-$125 per week, depending on size of office staff. |
| Establish patient satisfaction at 95% and higher. | Identify current problems through patient survey. Based on findings, train staff in communications on quarterly basis. | Patient survey: $2,500. Staff training: $1,000 per quarter. |
| Increase awareness of new procedure in community. | Public Relations: Send out press release. Set up speaking engagements with local community groups. | Press release: letterhead and postage costs. Engagement set up: staff time. Outsource PR: $1,000-$2,000 per month, depending on market. |
| Increase awareness of new procedure in community. | Advertising. | Print ads: $5,000, depending on market size. Advertise a minimum of three months; have a call to action in ad. Outside resources needed: copywriter, graphic artist, media buyer, or ad agency with health care expertise. |
| Goals and objectives: Specific, measurable, time-oriented focus. Communications strategy/tools: Strategy is how you will reach your goals/objectives. Tools are items such as brochures, advertising, health fairs, media interviews, publicity, direct selling. You often need more than one strategy and tool to reach your goal. Budget: The money needed to achieve the goals using specific communications tools. | ||
Creating a matrix to outline your goals, how you will get there, and what it will cost is a good way to start (see sample matrix, above). Once you have set your goals — for instance, improving physician referrals to your practice — you can come up with ideas on how to get there. Perhaps you need a new brochure, says Alleman. Someone has to be assigned the task of getting bids for the brochure. "Ask your peers who they use," she advises. "If a practice has a brochure you like, ask them who did it and how much it cost."
Other resources to help you find information on the products or services you need to buy are area public relations firms and professional organizations and the local hospitals with which your practice is affiliated.
Alleman says you should resist the urge to take on tasks such as creating brochures or doing patient surveys yourself.
"Often, that’s a waste of money," she explains. But sometimes, after getting some initial assistance from professionals, a good practice administrator or marketing executive can take over the responsibility. "If you have the survey done the first time, you can often repeat it yourself later."
Don’t guess on the numbers
Whatever you do, be sure to get hard numbers for your budget, she warns. "Don’t guess. You’ll inevitably be wrong."
Alleman says practices should try to commit about 5% of revenue to a marketing budget. "That’s actually rare these days, even if that’s what they should do." More common, she con tinues, is to see practices spending about 2% on marketing. "It’s much harder to accomplish a lot with the smaller figure, though."
In your budget, you also should allow for some contingencies, such as late requests to sponsor health fairs, which might fit in with your overall strategic goals for growth. A five-physician practice probably should set aside about $3,500 per year for such contingencies. "That allows you to do things you didn’t plan for, but which are opportunities you don’t want to miss," she says.
If you have never had a marketing plan and budget, Alleman says you should start small. "Do something you are comfortable with. If you need more referrals, do lunches for other physicians and their staff. That costs more in time than money. Don’t just jump in with a slick new brochure and change things too fast."
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