By Stewart Gandolf
Chief Executive Officer
Once upon a time … as some stories begin…the care and feeding of a profitable ambulatory surgery center seemed blessed with a seamless, predictable and uninterrupted patient flow. At least that was the idea.
Today, there’s nothing easy or automatic. ASCs—both large and small—are challenged to constantly align capacity and demand, attract new physician partners, contend with a shifting competitive landscape, communicate the institutional brand, and maintain quality care and profitability.
Profitability requires efficient operations and effective marketing in a tough economic climate. Did we mention “healthcare reform,” inspiring community confidence, or launching a hospital joint venture?
Not all ASCs have a marketing program, but others are being proactive—effectively using marketing as a business tool in a climate of change—and they’re doing so successfully and profitably. Objectives include attracting consumer direct patients for elective services such as cosmetic surgery or pain management. Or perhaps they want to increase physician visibility, build ASC name recognition and trust in the community.
In our work with healthcare businesses and medical practices throughout the nation, the task is to establish an ethical and cost-effective marketing program that positions strengths in answer to the needs in their marketplace, establish them ahead of the competition and achieve measurable business objectives.
Regardless of the purpose and goals, successful ASC marketing—meaning results-based marketing—begins with a serious roadmap for growth.
Planning for Success
Everyone’s situation is different—strategies, tactics and budgets will vary—but here are some of the essential ingredients to set a course for your success.
Create a one-year plan. You will have short-term tasks (next week, next month), and long-range goals (one, three and five years), but build your plan to focus a 12-month calendar. Implementation will include checkpoints for testing, tracking and—based on results—making adjustments.
An ASC marketing plan is an integrated system. Carefully define your target audience (probably more than one), your competition, the services to promote, the cases to attract, the image you want to portray, etc. Your marketing plan will include a blend of some or all of the following strategic categories:
» Internal marketing – Building and maintaining the systems that speak to your internal public, which for ASCs may include physicians, payors, patients and others—with an appropriate message for each.
» Branding – This is actively shaping the message about the ASC—and perhaps physicians and their practices—to clearly stand out from the competition. Branding is not so much about what you do, but in communicating how the ASC is valuable and desirable.
» External advertising – Consider all the available options that communicate with your target audience(s). These might include newspapers, broadcast media, internet advertising, direct mail, circulars, posters, billboards, etc. Plan carefully; some media can be expensive, but not effective, while others are highly effective and not expensive.
» Internet marketing – Depending on its purpose, an effective website can communicate image, attract patients, inspire referrals and influence patient healthcare decisions. It supports branding, the overall image, physician information, and the patient experience.
» Professional referral strategies – Physician satisfaction, patient satisfaction, and quality of care are closely connected in an efficient referral system—an ongoing process that assures the ASC functions at ideal capacity.
Return-on-Investment. The only genuine gauge of marketing effectiveness is return on investment (ROI). Marketing isn’t a “feel good” proposition; you’ve got to track tangible results. Administrators already have financial or operational metrics in place. An ASC needs to track and quantify results of individual efforts achieve their intended goals.
Test, track and adjust. Increasing marketing success over time comes from constant adjustments in the plan, based on pushing your marketing “winners.” To reduce risk, marketing tactics are first tested on a limited basis before rollout. Review performance at least quarterly.
Setting a Results-Driven Marketing Budget
Entire textbooks have been written about the art and science of marketing budgets—and you’ll find a popular “how-to” article with a Budgeting Worksheet [from here].
Plan an annual budget with specifics for each month, and include ROI goals for individual tactics. Invest a sufficient budget to produce measurable results from your plan.
Here is a simplified formula for reference when there is no budget or when the existing budget is out of touch with reality. In four basic steps:
Define your goal. Begin with the end in mind, and write down your incremental growth goal, in dollars, year-over-year, for a specific operating segment. For this illustration, let’s say $100,000 is the goal.
Divide your goal by an ROI factor of four. Your overall marketing return should be between 3:1 and 5:1. Some strategies and tactics produce a better return, while others will produce softer results. Let’s assume a middle ground of 4:1; $100,000 divided by four is $25,000 to meet the goal.
Divide the total budget by 12 months. This is a general monthly guide, but there will be larger and non-repeating costs in the beginning and less in later months. For this example, the monthly budget becomes $2,000 per month.
Keep goal, budget and reality aligned. Maintain the ratio between your goal and your budget if you need to make adjustments up or down. If you pull up or down on the goal or budget, you should expect the other end of the equation to change accordingly.
The objective is to budget effectively and realistically. It would not be wise to simply increase your budget without including high ROI activities; otherwise you will just throw more money away faster (and that’s no fun at all). And at the opposite end, an inadequate marketing budget universally produces zero results. No fun either.
Reduce Risk: Avoiding Marketing Potholes
The lack of direction leads to classic mistakes. Fortunately, you don’t have to learn the hard way. In our experience, here are some of the most common healthcare marketing mistakes we see. Drive around these potholes.
“Spaghetti Marketing” When frustration grows and the pressure to “do something” is strong, it is a common trap to try many things in the hope that something (anything) will work. Marketing without a plan is like throwing a handful of strategies, like so much spaghetti, against the wall “to see what sticks.” It’s inefficient, and it can be truly brutal on your budget.
“Wait-and-See” There are two likely rewards to a “do-nothing” approach—and both are negatives. The ROI for doing nothing is always nothing. And inaction usually means lost opportunity—allowing the competition to grow or the market to shrink. This is not to say that “anything” is better than “nothing,” but a well considered, even modest, plan of action will always out-perform Wait-and-See.
“Treat Marketing as an Expense” Successful marketing is an investment, a profit center that generates revenue with a measurable ROI. Your marketing plan needs sufficient budget and time to succeed and should be producing a 3:1 or 5:1 return.
“Marketing by Committee” This one’s tough, and it’s probably familiar. ASC administrators wear many hats and are expected to answer to countless needs, responsibilities and agendas. It can be extremely tough to find balance and resolve dissimilar interests. Get outside professional help if necessary; a well-defined plan requires focus and leadership for success.
Throughout the outpatient surgery industry, the changes in our nation’s economy and healthcare in general, have intensified the challenges of improving operations, increasing quality and satisfaction, improving operations, increasing revenue, contending with shifting competition, and achieving business and professional objectives.
For many ASCs, results-driven marketing is an underutilized tool for success. It begins with a solid plan.
This article by Healthcare Success founders Lonnie Hirsch and Stewart Gandolf appeared recently in SurgiStrategies, a resource publication for the ambulatory surgery center and outpatient healthcare industry. [July 2010] The principles and concepts of results-based marketing and budgeting in this article also apply to other health care business entities.