AAOS Now

Published 1/1/2016
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Bill Champion; Tony Edwards

What Stage Is Your Marketing?

Aim for value from marketing dollars
The recent shift from "volume" to "value" in health care also resonates in marketing your orthopaedic practice. Effective marketing depends on much more than simply ensuring patients see your practice name multiple times in a day or week. Getting the most from your marketing dollars requires ongoing measurements, improved outcomes, and enhanced efficiencies.

It may be helpful to categorize marketing efforts into four stages and to determine which stage best describes your current marketing efforts. With this baseline, you can plan promotions that will deliver value to your practice—as well as position your practice as one that delivers value to patients.

Stage I: On-again, off-again
This stage is characterized by on-and-off promotional efforts, such as sponsorships and occasional advertisements. Practices in this stage are smaller or have little need to engage in any formal promotion or marketing activity.

Stage 1 marketing efforts are usually short-term and require little, if any, time or outside costs. Many can be categorized more as community support activities rather than marketing and promotion. Common examples are athletic event sponsorships, youth activity organizations, community road races, and civic sponsorships.

Practices in Stage I spend less, as a percent of practice receipts, than practices at any other stage; marketing and promotion expenses are often less than 0.5 percent of annual receipts. These practices have little competition and are comfortable maintaining current patient volumes.

Although practices in Stage I could gain more value from their efforts, they align their resources with their objective—primarily community support.

Stage II: Yes, let's do it
Competition may drive practices from Stage I to Stage II. These practices spend more, as a percent of receipts, on marketing and promotion than practices at any other stage. Stage II practices regularly increase their marketing and promotion efforts to include several forms of advertising and numerous sponsorships, along with occasional events.

As practices increase their marketing efforts, advertisers and event sponsors take notice. Now, practices don't have to seek out opportunities—marketing, advertising, and promotional sales representatives will start coming to them. As volume increases, practices may temporarily overlook questions of value.

These practices may find saying "no" relatively difficult, having no justification for choosing one expenditure over another. In time, increased activity justifies hiring a staff member—or an outside agency—to coordinate and manage the efforts. These individuals, to justify their roles, seek out new activities and new expenditures. They may not, however, build the database or conduct the analyses necessary to determine the effectiveness of these activities.

Less than 30 percent of practices that engage in Stage II efforts more than 3 years will ever change. Promotions and advertisements are seen as necessary, even without data documenting tangible results and progress. Eventually, increased marketing activities and the corresponding spending become part of the practice's culture. Though the expenses may occasionally be challenged by accountants or partners, most practices will find ways to justify the efforts.

State III: Whoa!
Moving from Stage II to Stage III is difficult and requires the practice and the drivers of its marketing efforts to acknowledge that activity may not equate to real results. Frequently, a shift to Stage III is accompanied by a significant cut in promotion and marketing budgets.

Practices going into Stage III face two challenges. The first is that most marketing and promotion expenses involve personal relationships. Someone is going to have to break the bad news to salespeople, event coordinators, and internal marketing staff. The second challenge is that, with no measurements in place and no accountability, it may be impossible to determine which efforts, if any, produced results.

At this point, the practice and its partners may take a jaundiced view of any promotional expenditures. When new ideas or strategies are raised, the response may be, "been there and done that." Over time, however, the practice will realize that some marketing is necessary. The question will be how to do so without repeating the same cycle?

Stage IV: We need data
It is ironic that, in a profession that relies on research, treatment plans, and outcomes, most orthopaedic practices have no data, no plan, and no follow-up measurements for their growth and promotional efforts. Practices that reach Stage IV realize the need for data, identify the needs of both the practice and the market, and then continually measure the results of their efforts.

When orthopaedic surgeons have access to data, they make significantly better decisions and make them more efficiently. The discipline of data, planning, and measurement produces increasingly better results over time, and more often than not, at a lower percentage of practice receipts. This means more of the right patients for the practice, with lower expenditures and fewer resources required.

So why doesn't every practice engage at Stage IV? Small practices may not have the time or resources to devote to collecting data, planning, and measuring marketing results. Their efforts may be better served by focusing on care outcomes. Practices heavily engaged in Stage II may be reluctant to change or to admit that current efforts are ill-advised. Stage III practices may also need convincing that data will make the difference.

As the healthcare landscape shifts to new models of care—particularly those that involve partnerships among different providers—the type of marketing an orthopaedic practice does will shift. To improve marketing efforts, orthopaedic surgeons should apply the processes they use daily to solve musculoskeletal problems: start with a good assessment; develop a solid approach (treatment plan); and follow up with outcomes measures that can continually improve effectiveness.

Bill Champion is the president and Tony Edwards is the senior vice president of Venel, a marketing and communications firm focused on orthopaedics. They can be reached at Bill@Venel.com and Tony@Venel.com