Strategy-Driven Budget Planning For Referral Hospital Marketing
By Linda Kaplan, MHA
Yes, I’ll fill you in on how much to spend, sort of.
Last month, BluePrints conducted an online survey of our database to explore current and future marketing initiatives for referral practices. (Thank you to those who participated!) The results were relatively consistent in terms of how practices market – how they reach out to rDVMs and Pet Owners, as well as what percentage of their budgets they allocate to each audience. Specific strategies were applied fairly consistently as well. Here are a few of the top responses:
Most Common rDVM Marketing Initiatives:
- Practice brochure
- Continuing education and in-person visits (tied equal)
- Lunch & Learns
Most Common Pet Owner Marketing Initiatives:
- Practice brochure
- Community events/fairs
- Social media
- Online reputation management/engagement
Top Marketing Challenges Referral Practices Face:
- Differentiating their practice from the competition
- Competing against large, corporate entities
- Having enough staff and time for rDVM and community outreach
- Measuring effectiveness
- Online reputation management/engagement
- Marketing directly to consumers w/o upsetting rDVMs
- Prioritizing marketing dollars
- Overcoming complacency of rDVM community regarding referral habits
- Competing against “Dr. Google”
Trends of 2016 Marketing Budget Allocation:
Allocation of budget to rDVM outreach ranged from 0-80% with the majority at 60%, while budgets earmarked for existing client initiatives ranged from 0-40% with the majority at 20%. Allocation to community initiatives ranged from 0-60% with the majority at 20%. No dollar amounts were asked for or provided.
Trends for 2017-18 Marketing Budget Allocation:
Of all respondents, 54% plan to increase their budgets for 2017/18 initiatives; the remaining 46% will maintain their current budget. No respondents indicated decreasing their marketing budgets. No dollar amounts or percentages were asked for or provided.
Future Marketing Strategies and Tactics:
Almost 54% of respondents indicated they anticipate their strategies will be slightly different in 2017-18. Here is an overview of how they may shift:
- Update messages and strategies to target millennials more than baby boomers
- Differentiate practice clearly from corporate entities now in community
- Redirect efforts back to more substantive rDVM marketing, including relationship nurturing
- Focus more on promoting department/service capabilities, rather than individual doctors
- Focus more on content-rich case studies for rDVM outreach
So what does all of this mean for your practice?
We hope that, by sharing our results, you take comfort in knowing that other referral practices are dealing with many of the same issues that you are. You are not alone in the challenges you face each day.
The bigger question is, how is YOUR practice doing?
Third quarter is often the time when owners and managers start creating a framework of practice initiatives for the coming year. Here at BluePrints, we work with referral practices large and small, from coast to coast, to help develop customized marketing budgets and plans that are achievable, goal-oriented, and measurable.
To assist you in planning for 2017, here are some guidelines you might find helpful:
- Analyze the previous 6-12 months of marketing initiatives, including the budget.
- Meet with your top leadership to review past objectives, results, and future priorities.
- Establish and prioritize quantifiable goals to achieve, by service (and/or by location, if applicable). For example, increase surgery caseload by 5%; increase outpatient ultrasounds by 10 cases/month; increase dermatology referrals by 20% by 12/31; add 20 new referral sources within 12 months, etc.)
- Determine your overall budget.
- Allocate budget percentages into three or four targeted audiences, based on your goals:
- rDVM: CE, email communication, direct mail, materials/brochures, in-person visits
- Pet Owner/Community*: eBlasts, newsletters, events/fairs, brochures, promotional items, media relations, billboards/outdoor signage, social media, etc.
* Note: Some practices divide this into two categories, tracking how they continue to “upsell” existing clients vs. going out into the community to attract new clients.
- General: Website, stationery, photography, etc.
- Prioritize each section with specific tactics that have been successful for you in the past and/or you would like to explore in the coming months.
- Research and apply all costs associated with each initiative.
As mentioned above, the average referral practice in our survey allocates their budget:
- 60% to rDVM
- 20% to Pet Owner/Community
- 20% to General Marketing
However, you know your practice and your marketplace. Your allocation may be 50/25/25 or 80/10/10, or 20/60/20, or even 33/33/33… the right allocation is based on what you are trying to achieve and what you need to do to reach those goals in your community.
“How much should we spend on marketing?”
The general rule is the more frequently and consistently you market your services and unique offerings, the better the return on your investment will be. Practices that make marketing a priority will build a stronger reputation and build more traction than those who stay quiet. Slow and steady wins the race.
That said, if I absolutely had to “pick a number”- and I hate to, because every practice’s goals are different – if your practice is new, you are launching new initiatives, you have a lot going on, or you face a tremendous amount of competition, then you may want to allocate 4-6% of your annual gross revenue towards marketing for that year. If you are established and doing well without a lot of new things happening and you just want to stay in front of your audiences with relevant information, then rough guidelines dictate 1-3% of your annual gross revenue per year allocated to marketing. Promise not to hold me to those… we have clients who invest 8-9% and others who invest less than 2%.
Certain hospitals stand out among competitors, in part because of the excellent quality and expertise they provide, but also because of their ability to promote their achievements, differentiate their brand, and engage with rDVMs and pet owners on a regular basis, adding value to a mutually beneficial relationship.
Budget planning can be a bit daunting. Strategic, goal-oriented, and measurable initiatives will always do better than arbitrary or disorganized efforts. Should you need any help navigating the process, please do not hesitate to reach out to BluePrints for assistance.