The Marketing Enigma

February 15th, 2009 by Nick Jacobs Leave a reply »

As the economy continues to present its myriad of challenges nationwide, hospital executives are embracing a variety of cost-cutting measures at a very high rate of implementation. Delays or discontinuation of capital projects, employee layoffs, and a variety of other broad-based measures are currently dominating the healthcare environment.

Departments without direct patient contact are usually perceived to be the easier layers to peel in these expense reduction activities. Areas such as marketing, community, and public relations often become prime targets as they are significantly scaled back or even disbanded.

Historically, hospitals have implemented fluctuating sequences from one extreme to another as they have decreased and increased marketing department sizes and budgets through the various economic cycles. Unmistakably, in challenging economic times, marketing is nearly always more important than ever. Without knowledge concerning the various services available, the patients will not be aware of the nuances of each and how they could impact their health and wellness.

Having said this, however, many hospital executives are not experts in this area, and consequently, they simply move in lockstep with those individuals who see these programs as non-patient expense centers that merely drain the organization of its valuable resources even further.

BusinessDictionary.com aptly describes marketing as the management process through which goods and services move from concept to customer. As a philosophy, it is based on thinking about the business in terms of the customer, or in healthcare, patient needs and their satisfaction. As a practice, it consists of the coordination of four elements:

  • identification, selection, and development of a product
  • determination of its cost
  • selection of a distribution channel to reach the patient, and…
  • development and implementation of a promotional strategy designed to reach these goals

In order to avoid erroneous decisions that could lead to disastrous business consequences for the organization, marketing evaluations might be performed by professional marketing assessment companies specializing in this arena. Some of these firms can provide this service in economically viable risk-reward agreements that do not further complicate the financial challenges being addressed. They specialize in the evaluation of services that detail which marketing functions need to be continued and which functions should be restructured, and/or outsourced. The goal of these marketing evaluation firms is to:

  • help preserve the existing positive effects created by marketing
  • build better marketing practices, and…
  • cut the unnecessary associated costs

In two decades of observing the yo-yo phenomena described above, we have worked with numerous individuals and firms along the way, but none have been more valuable than the firms that specialize specifically in this area of marketing department analysis.

Firms that provide this specific service can be found through the American Association of Healthcare Consultants, The American Marketing Association, and the Society for Professional Marketing Services.

In our work, however, we have found at least one company that has continuously provided the necessary analytic and evaluation components required to complete this sensitive task. Corathers Health Consulting is a unique organization because it utilizes luminaries and unique specialty consultants through a team approach for most of their highly customized projects. What we observed when we worked with Corathers was that their distinguished consultation supplied an unparalleled differentiating factor over the other consulting companies with whom we had previously worked, but they are one of many such firms.

Regardless of the organization chosen, the concept is the key, and that is that you owe it to yourself and to your organization to understand exactly what can or should be eliminated or outsourced before the cuts are irreversibly implemented. The future of your organization may lie directly under that hatchet, and once the decision has been made, reverse is a costly gear to find on a very bumpy road of lost business, missing publicity, and absent advertising. The answer lies in cutting wisely and appropriately as you attempt to keep patients informed and to grow your business.

Linking a patient-Centered Approach to Quality Improvement & HCAPS

Nick Jacobs, FACHE addresses the 2008 Healthcare CEO Summit, co-sponsored by the Picker Institute and Planetree. Chicago, IL USA – Fall, 2008

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9 comments

  1. Mike Russell says:

    Nick, I think you’ve hit the motherlode here.

    The erroneous idea that marketing is a cost center, rather than (the correct understanding of it) as a profit center, tends to be one that even smart organizations are most susceptible to falling into during times of financial challenge. Of course, this isn’t specific to healthcare.

    As you note, clients can benefit greatly by seeking out guidance and mentoring from companies like yours and Cathy Corathers’ that can help them identify areas to improve their operational efficiencies, adopt better revenue management practices, etc. *without* throwing out the top line marketing/business development baby with the bottom line cost containment bathwater.

    In my experience, it’s all about making smart decisions, not just ones that “seem” right at the time. That’s where the creative insights and sound judgment needed to make those critical distinctions come into play. Ultimately, they’re the secret sauce that makes all the difference between success and failure.

  2. Nick Dawson says:

    Nick,
    Great article!
    I particularly appreciate hear that marketing takes on increased importance in troubled times.

    One of the questions I have been mulling over is what form that marketing should take. It seems like this is the perfect time to heed the advice of The Cluetrain Manifesto and start developing 1-on-1 relationships rather than posting more billborads about being the top cardio program in a given region.

    Your point about making sure any reductions are implemented intelligently is a salient one. While its not always black and white, making a decision based on data analysis has got to be more accurate than taking a swipe at non-patient services.

    Thanks again for the insightful post!

  3. Maggie Barnes says:

    I’m the director of advertising for a hospital. When I got here, I had a staff of four. Now, it’s just me and I strongly suspect I will lose my job before the snow melts. I am trying to bridge my facility into non-traditional forms of communication like the social medias to keep our profile up without spending a lot of cash. I’m also hoping to prove my worth to a CEO who doesn’t know a radio flight from a FSI.

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