Should Private Practices Invest in Paid Advertising?

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Intro

As the healthcare market evolves, more and more private practices are investing in more aggressive marketing strategies. Some are hiring outside firms to help them, others are hiring internal marketing staff, and others are just trying to figure it out for themselves. Regardless of how practices decide to approach their marketing techniques, these actions will cost something. It might be money for those investing in outside resources or time for those who are tackling it alone. My experience working with the healthcare industry has revealed the costs and benefits of certain actions and how they best serve the practices that spend them.

The most obvious and prominent conclusion that I’ve come to is that private practices that want to grow need to invest in paid advertising. But they can’t expect to put a few dollars behind targeted ads and see patients running through the doors. It’s more dynamic than that.

The Basics

First off, practices must decide what they want to accomplish with a marketing strategy. Some might shoot for growth in patient acquisition while others might care more about maintaining the number of patients they have. Regardless of the desire, practices need to invest in maintaining and building external relationships and brand awareness. Even those who are comfortable with the number of patients they serve will have to invest in acquiring new patients- just at a smaller scale. The different goals will not determine if they market, but how.

It’s important to know the different kinds of marketing that private practices typically engage in.

Patient acquisition marketing is advertising that asks people to become your patients. It communicates the value that patients can expect to receive and gives them a clear call to action to engage.

Brand strategy advertising is focused on uplifting your brand. It introduces people to your practice, what you do, and how. It also goes on to distinguish why your practice is the best in its specialization.

The Avenues

So how should practices market according to their different goals? It all starts with the traditional form of patient acquisition- B2B relationships. These relationships with other networks and providers receive referrals for their specialty, which is a solid channel to acquire patients. Maintaining these channels and networking for more is an ever-present necessity, and the better you can maintain relationships the stronger the outcomes will be. Some practices rely on CRM software to maintain and strengthen relationships with other healthcare workers and their patients as well. If you’re comfortable with your patient base it’s important to maintain it well, and a CRM can help do that. We at Engine specialize in CRM implementation and integration with EHR software, so reach out if you have questions.

Those who want to reach beyond their current patient base and launch a more aggressive client acquisition campaign need to utilize avenues beyond referral pipelines. They need to give energy to B2B and B2C marketing. This might look like pushing campaigns out via traditional media such as network or broadcast TV, radio, billboards, and outdoor signage. It could also be digital advertising in the form of paid search engine marketing, social media advertising, video marketing, and or email marketing.

The reason why these kinds of campaigns are so important is because patients now have more options than ever before when it comes to seeking healthcare. As they go beyond referrals for different options, most people use the internet to search for doctors- roughly 80%. Because of this, you need to meet them where they’re at and establish your practice in an online space.

Regardless of how aggressive you approach your healthcare marketing; it needs to happen. Here’s why. A lot of patients seeking healthcare these days are Baby Boomers. Whether it’s preventative care or another kind, this large generation accounts for a lot of doctors’ patient bases. As this patient base ages and eventually goes away, practices are going to have to start focusing on catering to the next generations of elderly folks who need the most health care. Because the Baby Boomers is such a large generation, there won’t be as many patients, which means the competition will get fiercer. Those who already have strong marketing techniques, reach, and knowledge will be more capable of survival in the changing landscape.

In order to remain competitive, you have to invest somehow. Whether it’s paid advertising or not, investing resources now provide a deeper investment into the future growth of your practice. One might invest in paid advertising, a development director, or an external marketing agency. What these investments do is let people know you exist, what you do, and what you have to offer. In order to succeed, people need to understand your unique position among the myriad other options. They won’t know what makes you special unless you make a point to tell them.


The Strategies

A lot of providers or administrators in the world of healthcare aren’t positioned to tackle marketing and patient acquisition from a traditional business sense. They likely don’t have time to implement brand advertising, lead generation, or patient funnels. Unfortunately, it’s not enough to sponsor some digital ads and hope for the best. Here’s an example…

Maybe you are an unknown brand, less than five years old. Or maybe you’re a 10-year-old brand that has only operated out of one location with minimal marketing looking to expand to another location. If both of those brands begin their paid advertising investment in a strategy that’s focused only on paid patient acquisition, they’ll find that the ROI on those dollars spent is going to be very low. In fact, the cost to acquire a patient through that marketing strategy may wipe out your profit margins as a practice because your brand is not yet established. So, you have to start with a branding strategy that allows people to understand who you are, where you are, what you do, and how you’re different from others. Then you can shift that strategy over time to prioritize patient acquisition

Another error I often see is a medium-sized practice, maybe a surgical center, that might have two surgery centers and three clinics in a metropolitan area with a strong brand reputation. But maybe one of their surgery centers is struggling. The original location could be doing a really good job, but the other location can’t gain momentum. Usually, the problem comes from one of two things- there are not enough dollars being invested in paid advertising to support those different locations, or their approach to their strategy is not the correct one. You can’t apply the same marketing techniques to different centers that are in two different stages of business. There’s a diminishing return on branding strategy for a healthcare practice within a localized market, and those dollars could be better spent establishing the identity of the new practice.

There are only so many patients within a local area. After a lot of time and frequency of ads delivered from money spent, you are eventually going to saturate the market with your reach and meet a maximum number of people. So, for instance, if in 2019, you put a strong exerted brand effort and you reached that diminishing return, then then you pause brand advertising for 2020 and 2021. Crank up paid patient acquisition advertising for two years. Then re-engage with a heavy brand strategy the following year as you expand locations. What you should do after you’ve reached that kind of point of diminishing return from a branding marketing strategy is to begin to shift the percent of your dollars and the percent of your ad copy to be focused on patient acquisition.

The Benefits

As you approach a point of diminishing return in your marketing strategy, you have to begin to shift to a patient acquisition marketing strategy. And you continue to make that shift until you’re living in about what we call an 80/20 world. This means 80% of your advertising dollars are focused on patient acquisition, and 20% is focused on branding your practice.

At that point, the economies of paid advertising start to pay off huge. You have a very low cost of acquisition or marketing standpoint for your patients, your return on dollars invested start to generate substantial amounts of revenue and increase your margins, and your practice generates more revenue that can feed into a greater profit margin or more advertising capabilities.

Marketing is not a box that can be checked, but a continuous strategy that shifts and grows with the needs of your practice. There is one consistency in marketing- it’s not free. But when it’s done correctly, it’s worth every penny. If you want to talk more about healthcare marketing strategies, and how Engine Systems can help you practice find its ideal sweet spot, reach out to Engine Systems and talk to us with a free discovery call.

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