Another tale from the front lines of ROI
I met with another frustrated healthcare marketer yesterday, who told me of her latest battle with a leadership group that struggles to understand marketing. The strategy in question was a service-line initiative supported in part by, let’s say, $50,000 in awareness advertising (the names and numbers have been changed to protect the innocent). After outlining the campaign, the service-line manager turned to the marketing director and said, “So can you guarantee me that if we spend this $50,000 in advertising, it will bring me $100,000 in business?” The inference, of course, was that if you can’t demonstrate a financial return, then it must not be a smart strategy.
(Excuse me while I pause to use my meditative techniques to restore peace and calmness to my aura. In…and out. In…and out. There, better.)
If you’ve listened to our podcast or heard us speak at a conference, you know our position on the increased use of Return on Investment (ROI) as a tool to measure quantifiable results in healthcare marketing: we’re all for it. The more hospital marketers can demonstrate the results of their efforts, the better. And ROI is the ultimate measurement – the actual return in dollars on the money spent. (Of course, there are other important potential results, such as building awareness, perception, mindshare, etc.).
But here’s the problem. ROI is a double-edged sword that can be used to chop down smart strategies and new ideas simply because they’re hard, or even impossible, to measure. Frustration sets in because too often, we hear of circumstances where a legitimate marketing initiative is held up or shot down because ROI is wielded as a weapon of mass-marketing destruction. As in the example given above, most healthcare services do not lend themselves to immediate action by a consumer. In many cases, awareness and perception needs to be created to support other aspects of the marketing strategy, all in the hope that more patients will turn to your service if and when they need it. So, for example, it should not be expected that advertising used to promote a hospital’s general surgery offering will drive people in to try out an appendicitis.
Marketers should always try to demonstrate the value of their ideas, but many important success factors for an organization – brand building, the patient experience, social media adoption, etc. – simply cannot be measured using true ROI. The quote I always use, borrowed from healthcare experience evangelist Fred Lee, comes from Albert Einstein: “Not everything that can be counted counts, and not everything that counts can be counted.”
As marketers, it’s up to us to help others in the organization understand how various marketing strategies can be measured, and what success should look like. We recommend a book by long-time healthcare consultant David Marlowe, “A Marketer’s Guide to Measuring ROI”, as a great tool for understanding how and when ROI is valuable, and when it isn’t.
Maybe we should run a contest: what are your favorite examples of ideas wrongly shot down because ROI couldn’t be proven?
Potentially-related posts:
- Opening a second front in your marketing war
- New book is must-have for healthcare marketers
- Help your CEO help you
This article was posted by Chris Bevolo on Wednesday, April 8th, 2009 at 2:56 pm, and was filed under Marketing, Strategy.
April 9th, 2009 at 10:50 am
Chris – great post, and very typical of most hospital marketing challenges today. I agree that in many cases (across many industries), marketers continually try to measure branding initiatives, Social Media adoption and (in healthcare) “patient experience.”
However, there are some marketing methods that are easy to quantify and measure successes. Service line development, for instance. And, utilizing online marketing (not just social media) can also bear out fruitful results.
It boils down to determining what you are measuring, setting realistic expectations, and defining a rigorous process to measuring to that outcome. If done right, these measurable approaches can not only pay for themselves, but also help offset those less-measurable efforts of branding.
This gives time for the hospital marketer to work on building value, changing community perception, driving physician loyalty (efforts that will pay off in the long-term).
But let’s face it, in this economy, there has to be some component of ROI measurement – hospitals can’t afford not to…
April 9th, 2009 at 10:59 am
Great post.
Equate social media, and the participation therein/thereof, to that of the customer service realm. Great companies have come to understand the valuable, yet intangible benefit (ROI) of good vs. bad customer service. I would argue that businesses will spend money to increase the quality of their customer service without knowing a specific ROI. Why? Because good customer service creates good word of mouth marketing…arguably the best kind of marketing out there.
The closer we position social media to customer service, the less dependent on ROI our presentations will be.
Just my opinion.
Warm regards,
- Jim
@medxcentral
April 13th, 2009 at 2:39 pm
Scott Monty at Ford & David Meerman Scott both recently said “What’s the ROI for putting on your pants every morning…” in response to the inevitable ROI questions about social media. The point they were both making was that social media was no longer an ROI discussion. Social media is a necessity to be competitive and responsive to customers. Here the link: http://socialcomputingjournal.com/viewcolumn.cfm?colid=779.
Musicians do not have a marketing plan, advertising budget or ROI target when they start composing or developing a song. They need to create great music that people will like. The fans and music lovers/critics/DJs vote with radio plays, downloads, purchases of fixed media and their feet – buying tickets to concerts. What if every musician had to have a measured campaign and ROI justification for each song before they started composing?
Marketing is less and less about “campaigns” and “impressions” with ROI measurements and more about conversations that lead to direct trust and attention relationships with cusotmers. Healthcare marketing decision makers and ad agencies typically prefer the safety of executive and board presentations that focus on large traditional campaign metrics like “hits”, “drive by views”, “statisfaction surveys”, “calls to the call center”, “controlled circulation” or “Neilsen results.” The large numbers from measured media campaigns are meant to impress and certainly work well with associated ROI analysis but may or may not reflect any meaningful trust or attention relationships with customers or patients.
And if all those “measured” marketing campaigns have predictable ROI, why are most hospitals facing dramatic declines in elective private pay patient admissions? Have the customers stopped watching TV, listening to radio, reading print media, looking at billboards or opening their postal mail? Or have they stopped listening to a one-way conversation?
April 13th, 2009 at 3:50 pm
Heard this the other day: what’s the roi on putting your pants on? Very nice writing, btw