By Stewart Gandolf
Chief Executive Officer
While many methods of marketing may be available, the two most commonly utilized techniques are brand-based marketing and direct response marketing.
There is also a third, increasingly common method that is a hybrid of the other two.
At its core, brand-based marketing (also called “Institutional Marketing”) emphasizes the value of a specific brand, branded product or service. Brand marketing includes a range of terms and concepts, including brand awareness, brand recognition, brand image, brand equity, name awareness, name recognition, etc.
In the past, the primary goal of brand marketing was to create awareness and recall for the brand. The difference between awareness and recall can be best understood as awareness being the desired customer’s ability to remember having heard of the brand if the brand is identified, whereas recall is the ability of a desired customer to name your brand when the brand category (industry, niche, product, service) is identified generically.
Over recent decades, brand advertisers have increasingly realized that brand awareness and recall does not necessarily translate into sales and true brand equity. For that value to be established in the information age of the 21st Century, a brand must go beyond and deeper than awareness or recall. Today’s successful brands must resonate with their audiences. Brand resonance is the relationship and level of identification of the customer with a brand.
Healthcare practices tend to prefer this method of marketing because it focuses on the positive image and qualities of the practice and the practitioners. While brand-based marketing has obvious benefit and appeal, it also presents some limitations and challenges for most private practices.
Brand-based marketing challenges for private practices
Brand-based marketing requires massive amounts of exposure and repetition to establish and maintain awareness, recall and resonance with the desired audience. Those massive amounts of exposure and repetition usually translate into equally massive and consistent volume of marketing dollars in the practice marketing budgets.
Most private practices (like other small businesses) have limited budget resources for marketing – particularly by comparison to the large corporations that commonly use this method of marketing. This limitation represents a significant challenge to success in utilizing exclusively brand-based marketing methods.
The other major challenge is time required to develop brand equity through increased recognition, recall and resonance.
Consumers today are besieged and inundated with literally thousands of marketing and advertising messages every single day. In order to have any chance to break through the “clutter” of informational and promotional “noise” to achieve awareness, recall and resonance, the marketing effort must be consistent and constant. Even so, it takes time (and money) to achieve results, and it is difficult (if not impossible) to predict how much time it will take to get measurable results with exclusively brand-building strategies and tactics.
This is true because each situation will present its own set of variables that can affect the timing of results from brand-based marketing. These variables include market awareness, demand and interest in the product or service, volume of competition, the quality of competitive marketing, volume and quality of your own marketing, consistency of marketing activities, varying media costs in different markets, economic conditions or changes during various phases of marketing, internal communication and sales skills, etc.
Brand-Based Marketing Campaign (Graph format)
For more perspective on brand strategy, review the Branding section of this site.
The objective in direct response marketing is to develop a measurable, short-term cause-and-effect relationship between the marketing tactics and budget and the business generated from the implementation of these marketing activities and funds.
In direct response marketing, the marketer offers something of specific, meaningful value to the prospective customer to motivate a more prompt and measurable “direct” response.
Depending on the industry, product or service category, the specific nature of the offer will vary, but regardless of the business category, every direct response offer serves the common objective or inspiring more responses more quickly.
Also, all effective direct response offers in a specific, limited-time deadline to encourage speedier response from those who are interested. Since the goal of direct response marketing is to influence faster response, it is essential that direct response promotions include short-term deadlines.
As we know, most people procrastinate about doing what they need to do – or even in many cases about what they want to do. This is particularly true regarding healthcare.
Giving people a deadline encourages a quicker decision – one way or the other. If they see a value in the offering, they will respond sooner because of the short-term extra incentive that motivates that response.
Historically, many healthcare practices have resisted direct response marketing because of legal and/or ethical concerns as well as concern about the image that would be associated with a healthcare practice that used introductory offers to attract patients.
These practice owners assume (often incorrectly) that the nature of their offers must be presented in the form of discounted or even free services that would create an unfavorable impression of lower quality, as well as attracting only lower quality customers. Also, many medical practices cannot legally offer reduced fees on services covered by health insurance plans, so they assume that this option is not viable for them.
In fact, there are many different kinds of appropriate, ethical and legal introductory offers that are being utilized successfully by healthcare practices in a wide range of professions and specialties.
These offers range from free seminars to free blood pressure or cholesterol screenings to special packaged pricing options for new patients, including qualifiers that clearly apply to non-insured services and procedures and/or cash patients who do not have or qualify for insurance coverage for certain procedures and services.
Recent example of direct response healthcare offer
Direct response offers are increasingly evident, even from traditionally conservative institutions. During the 2004 holiday season, a well known and very well respected hospital in a major metropolitan area offered the following direct response “package” related to their Women’s Heart Care Center.
Comprehensive Heart Risk Assessment, including a 50-minute relaxation massage for only $99.
Their $99 Comprehensive Heart risk Assessment included:
- Lipid profile (total cholesterol, HDL, triglycerides and glucose)
- Cardiac risk profile
- One-hour consultation with a nurse
- 12-lead EKG
- Vital signs (blood pressure and heart rate)
- Body Mass Index (BMI)
- Physician referral as needed
- Follow-up phone calls after one and six months
- 50-minute relaxation massage
Obviously, if the patient had health insurance that covers the medical services, the $99 charge was applied specifically to the massage.
The program even encouraged respondents to “give the gift of a healthy heart this holiday season” (through the option to purchase gift certificates for this offer).
And this offer came from a major, conservative hospital – another indication that healthcare can be and in many cases needs to be presented as a valuable consumer option.
How many women responded to this promotion who had been thinking about and meaning to get around to this kind of check-up but were suddenly motivated by the massage part of the offer? While the hospital won’t reveal specific details, the answer is plenty! Certainly many more than would have responded without the massage option just because it was the proactive healthy decision to make.
One major benefit of direct response marketing when it works is that you see a much quicker response than with brand-based marketing. Also, you can more directly measure the correlation between your marketing and the response, because people are responding to a specific offer within an imposed short-term timeframe.
As with brand-based marketing, there are some challenges and limitations associated with direct response marketing. For example, in an exclusively direct response marketing model, you have to constantly promote. When you stop, you can anticipate a drop in business generated by the direct response marketing when the switch is “on.”
Another risk with direct response marketing is that if there is nothing to associate with the value of the product or service other than the special offer, over time your audience may learn to view you primarily for the value of your offers.
Direct Response Marketing Campaign (Graph format)
Hybrid marketing is an increasingly popular blend of the best aspects of brand-based marketing and direct response marketing. Many industries and businesses, including those catering to high-end customers are utilizing this hybrid marketing approach.
This method of marketing is based on the concept of ongoing brand-building marketing activities which are occasionally supported with relatively short, time-sensitive direct response campaigns.
A good retail example would be Nordstrom or Lexus. Both of these companies cater to an upscale, well-to-do audience. Both have ongoing brand-based marketing programs and activities that constantly reinforce their unique value to – and relationship with – their customers.
Periodically, a few times each year, both Nordstrom and Lexus conduct special direct response campaigns. (In the retail setting, this is usually positioned as a special sale or sales promotion.) Because of their ongoing brand value marketing to their customers, their special sales are not seen as cheapening their product or their reputation. In fact, quite the opposite impression is created.
People look forward to the sales because they value the companies and their products so highly. Yet Nordstrom customers and Lexus customers don’t necessarily wait around for the next sale to make a purchase if they are in the buying mode.
Do Nordstrom and Lexus generate higher short-term revenues during their sales than at other times? Of course! But do they rely exclusively on special offers and non-stop price promotions? Absolutely not.
In fact these companies have the best of both worlds of marketing.
Referring back to the direct response campaign from the Women’s Heart Care Center of the major metropolitan hospital, that hospital also engages in hybrid marketing. The majority of their marketing is brand-based, but they will occasionally engage in special direct response promotions like their special Cardiac Risk Assessment to enhance their relationship and brand value with their customers.
More private practices in healthcare are benefiting from hybrid marketing than ever before and that trend can be expected to continue, because, when executed properly, there is virtually no downside and a lot of upside in this model.
Hybrid Marketing Campaign (Graph format)