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The Essentials of Marketing Especially for The Missouri Health Care Association August 27, 2008 The Essentials of Marketing Especially for The Missouri Health Care Association August 27, 2008 Anthony Cirillo, FACHE, ABC www. 4 wardfast. com

50 Ways to ROI 50 Ways to ROI

What is Marketing? “…a set of processes for creating, communicating and delivering value to 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 What is Marketing? Marketing Company Capabilities Customer Wants

Consider… • 69% people interested in products that block ads • 65% want limits 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 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. • 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 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. • 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 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. – 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. – Mc. Donald’s • Happy Meals Marketing Mindset Know different needs mean different markets. – Mc. Donald’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 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 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? 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! • 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 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 5 th “P” of Marketing • Product, Price, Place, Promotion • PERMISSION • The 5 th “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 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 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 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 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 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 • 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 The Preliminaries • Physicians • Resident / patient advocates • Influencers • Alliances and Partnerships

S. W. O. T • Not a to-do list but a guide to strategy 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 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 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 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 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, 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? 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 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. 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 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? ” 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. “Injury-free yoga”

U. S. P. “Dominos Pizza. In 30 Minutes or It's Free! ” 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 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 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. 9 Second. 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 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 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 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 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 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 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. ” “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 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 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 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 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 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 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 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 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 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. 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, 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 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 Ø Web • specific url for each campaign • Build ROI Mechanisms into Campaigns Ø 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 $ - Web. MD; AOL Health; Regional • online chat for immediate feedback and response

Build ROI Mechanisms into Campaigns Ø Direct Response • Coded by group • Test Build ROI Mechanisms into Campaigns Ø 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 Ø 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 ROI Process ROI = Gross Margin – Investment ___________ Investment Revenue Costs of Goods Sold Marketing Investment Return Gross Margin Recovery of Investment Lenskold Marketing ROI

Marketing Investment Ø Upfront and Variable Expenses Ø Creative development Ø Production and printing Marketing Investment Ø Upfront and Variable Expenses Ø Creative development Ø Production and printing Ø Distribution channels Ø Media and delivery Ø Marketing lists Ø Giveaways and discounts Ø Database system development Ø Research tied to the campaign Ø External strategic resources Ø Staff time Ø Associated training Ø Measurement and research studies

Marketing Investment Ø Does not include Ø Brand communications Ø Website unless time for Marketing Investment Ø Does not include Ø Brand communications Ø Website unless time for specific campaign is factored Ø Customer intelligence gathering

ü Marketing Strategy ü Marketing Audits ü Marketing to Baby Boomers ü M&A Strategic ü Marketing Strategy ü Marketing Audits ü Marketing to Baby Boomers ü M&A Strategic Marketing and Communications ü Integrate CRM tools and Continuous Feedback Tools ü Customer Service Training ü Community Relations ü Media Relations ü Staff Retention through Empowerment and Brand Identity ü Spokesperson Serving as Bridge to Prospects

Questions Anthony Cirillo, FACHE, ABC 1 -704 -992 -6005 cirillo@4 wardfast. com www. anthonyssong. Questions Anthony Cirillo, FACHE, ABC 1 -704 -992 -6005 [email protected] wardfast. com www. anthonyssong. com http: //sickoh. blogspot. com/ http: //anthonyssong. blogspot. com/