Defining Marketing ROI in Healthcare
There are many reasons why healthcare marketing is different than other industries, which makes calculating marketing ROI uniquely challenging.
For one thing, an ad for a particular provider, facility, or treatment may not result in immediate action by a consumer. Many who are exposed to healthcare marketing may not need the service at that moment, or maybe ever. Depending on your service line (e.g., cardio versus obstetrics), the time frame where you can attribute revenue to your marketing can vary dramatically.
So, how do you know how well your healthcare marketing is working? On the surface, the calculation for ROI is pretty straightforward:
(Net Revenue – Marketing Spend) / Marketing Spend = Marketing ROI
Because of the industry complexities mentioned above, there’s not an exact formula for healthcare marketing ROI. However, the businesses that commit to an approach and stay vigorous about tracking their definition of ROI are more likely to allocate resources better and build more effective budgets.
3 Ways to Approach Marketing ROI in Healthcare
1. Straight Numbers
Healthcare marketers relying on hard data to prove ROI should have a clear understanding of the costs associated with services, patients, and providers, as well as the total investment in marketing. Handling this manually with a spreadsheet is simply not possible today. Modern healthcare companies oftentimes rely on a CRM to evaluate their campaigns, track leads, and set values to different engagements.
For example, you may be interested in tracking both new patients and those with prior encounters during a particular campaign period, but the potential for revenue may look very different. One effective marketing campaign can have a halo effect and lead to repeat patient interactions, perhaps across different service lines, stretching the return of that investment.
2. Anecdotal Evidence
Healthcare can be a deeply personal service, which makes monitoring word of mouth especially important. A positive encounter can lead a patient to refer family and friends, or to share their experience online—just like a negative encounter can lead them to tell their close circle to steer clear. Data shows that 26% of patients check online reviews for healthcare providers prior to booking an appointment. When was the last time you did a search for your own facility? What conversations are happening on social media or review sites?
Another anecdotal method for assessing your marketing is to have discussions with referred physicians (why did they join you?) and strategic customers, such as managed care organizations or pharmacy benefit managers (what do they value about your partnership?). Knowing how these parties perceive your brand can be helpful in identifying marketing wins or needs.
3. A Combination of the Two (Hint: Follow This)
We believe it takes both the numbers and the stories together to build a complete picture of marketing ROI. Healthcare marketers that combine attention to anecdotal and financial evidence are in the best position to set realistic goals, choose the appropriate metrics, and make targeted decisions about spending cuts or priorities.
While it’s true that tracking marketing ROI can be more difficult in healthcare than in other industries, it’s no less important. By defining your spending and success metrics, regularly reviewing your results, and paying attention to both numbers and word of mouth, you can demystify healthcare marketing ROI. And with a firm understanding of your return, you can make the right choices when it comes time to build your budget and plan your next marketing campaigns.