Healthcare Providers Need to Market

Last week, there was a segment on NPR on hospital marketing. (http://www.npr.org/templates/player/mediaPlayer.html?action=1&t=1&islist=false&id=126537953&m=126899947). In this segment, James Unland, editor of the Journal of Health Care Finance, speaks out against most hospital advertising. As much as I disagree with much of what he said, the good news is this is a wake up call for hospital marketers to make sure they can justify their marketing investment.

Mr. Unland spends most of his time criticizing “huge expenditures on TV and broad-based media advertising (which also includes radio and billboards) that’s very, very expensive.” He actually goes on to suggest that regulators say to hospitals: “You have a charitable mission. Don’t throw this money down the drain on expensive TV ads.”

Mr. Unland especially has problems with hospitals doing this type of advertising in large metropolitan areas because “the problem in metro areas is each hospital only serves a tiny percentage” of that market.

While it is true that television advertising is not for everybody, there are several problems with Mr. Unland’s argument.

• While I am a huge proponent of CRM activities to engage patients, I firmly believe that people need to know and trust a healthcare brand before they engage. Television when used appropriately can play an important and powerful role in the branding process, since the visual and audio impact of a TV ad can be quite powerful and memorable in generating awareness and creating positive perceptions. This is the first step toward brand selection.
• While it is true that broadcast TV advertising may not make sense for a community hospital because it can only realistically draw patients from a small percentage of a large metropolitan area, that is not true for systems (in Chicago, think Advocate) or brands that are so powerful that they draw from the entire metropolitan area (think Northwestern). The entire metro area is their service area, and for them TV can make abundant sense.
• Additionally, issues such as declining populations to enhancements in services may dictate that traditional “community” hospitals redefine their service areas beyond traditional geographic boundaries
• Finally, you don’t have to buy the whole market. That is what cable advertising is all about. Cable allows you to focus on a specific geographic segment of a larger metropolitan market, not to mention its ability to target a very specific demographic.

As mentioned, Mr. Unland also lumped billboards into the mass media tactics he thinks are wasteful. Billboard advertising generally is local. Interestingly, a recent article in the Journal of Healthcare Management discussed the impact of billboard advertising on visitors to an urgent care center (http://www.ache.org/pubs/jhm552.cfm). Not only did the billboards increase awareness, but a majority of the respondents said the billboards either moderately or highly influenced their visit. So billboard advertising certainly can work.

Mr. Unland suggests using Public Service Announcements (PSAs) as a way to market screening and events, and that “the media is almost always receptive.” While that is nice in theory, as one person noted in a LinkedIn comment I saw: Mr. Unland apparently hasn't tried to place one lately as media tries to sell every second and column inch.” It is just not realistic to expect PSAs to get your message across.

Mr. Unland strongly recommends using the Internet as a way to market services. He says: “The unit cost of telling the story of the hospital and what services it has is minute.” No argument there. But the Internet should be part of an integrated program. And I would not necessarily say the cost of developing a compelling Website, driving people to it through online marketing and social media, and then monitoring it, is necessarily “minute.”

Finally, Mr. Unland says direct mail is an appropriate way of marketing to the service area. True again, but direct mail is but one element of a comprehensive CRM strategy. And indeed, an effective CRM program must be an integral part of a hospital’s marketing efforts. But that CRM strategy will work much better if it is implemented by a healthy brand.

Unfortunately, many hospital executives and their Boards of Trustees will have heard this segment and may question their organization’s marketing expenditures. So hospital marketers will need to be even more adept at marketing the need to do marketing to their management. So your marketing program needs to be well thought out. Here are some thoughts on how to do that.

• A good plan starts with insight. Do your homework. Conduct research and analyze data to determine:
• What your brand stands for in the eyes of your target market
• How to best communicate your brand promise (messaging and media)
• What you should promote (and why) to attract and retain patients, as well as to maximize physician referrals, through your CRM program
• Who you should be promoting it to (and why)
• What your positioning and messaging should be in your promotional messages
• How to best deliver those messages
• Include reasons to believe. Describe your own successes. If you are just starting, ask your agency and/or CRM partner to provide success stories from similar organizations
• Discuss how you are going to demonstrate value
• For your branding initiatives, this can be challenging, as branding initiatives in and of themselves will not directly lead to quantifiable revenues.
• For your CRM initiatives, it is much easier. You can demonstrate ROI from CRM activities (like Mr. Unland’s direct mail)

In conclusion, a well executed marketing program can:

• Strengthen your brand by creating awareness and enhancing perception so physicians will want to refer to you and patients will want to utilize your services
• Increase revenues through promotion of the appropriate services to the appropriate target markets via the appropriate delivery mechanisms
• Increase marketing efficiencies, since you will not be wasting marketing resources on programs that do not have appeal to your target market
• Improve the healthcare of the community you serve, helping you achieve your healing mission. After all, your efficient marketing program will educate people to engage in programs to improve their health

Marketing (including advertising) is an essential part of the business of running a hospital. I know it. You know it. Don’t be shy about letting your peers know it.