Medical Tourism Marketing: Tips to Develop a Medical Tourism Marketing Budget
Patrick Goodness, CEO: The Goodness Company: Provides Tips on Medical Tourism Marketing
San Jose, Costa Rica (PRWEB) March 21, 2014
This past month, while consulting with a group of hospital CEOs and CMOs from around the world, our task was to develop domestic and international medical tourism marketing budgets for 2014 and 2015. While a few of these executives were seasoned healthcare marketing professionals, most were fearful of the marketing budget process because they didn’t understand the dynamics of planning, implementing and tracking an international healthcare marketing campaign. In this article, we’ll demystify the marketing budget development process making it easier to plan and execute successful healthcare marketing campaigns.
In many industries, administrators are accustomed to setting the marketing budget as a percentage of revenue benchmarks. According to Go-to-Market Strategies, "30% of companies spend between 3-5% of revenue on marketing, with 45% spending over 6% (most of those between 6-10%).”
Developing a marketing budget for a new medical tourism venture can be particularly difficult, because the first step is to develop a projected revenue goal then base your marketing budget on this goal. The concept of medical tourism also requires a significant level of customer education to help potential patients understand the value of traveling for quality, affordable medical care.
Hospitals and medical centers that are venturing into the medical tourism space for the first time can expect to spend approximately 20% of targeted revenues to fund marketing programs during the first two years of marketing development. Underfunded marketing is a leading cause of business failure during the critical initial three years of operation.
In general terms, if a company decides to follow a ‘percentage of revenue’ approach, then 8-10% of target revenues should be spent on marketing, with roughly 5% allocated to labor (marketing department or marketing agency) with the remaining balance of 3%-5% being allocated to media expenditures. The following factors will help you determine a more accurate percentage to dedicate to marketing.
- How mature is your market? (Are you in an established or new market?) (New markets require more investment for educating potential customers.)
- Is your company recognized in your industry (Is your organization new or an established business? Do you have a recognizable brand?) (For example, successful first year international medical tourism marketing programs must invest in branding to establish confidence and credibility.)
- How fast do you plan to grow? (Plan for a larger budget to support aggressive patient acquisition goals.)
Experience Makes a Difference:
With experience comes confidence. As the director of a healthcare marketing agency with 20 years of regional, national and international healthcare marketing development, we have the experience and data about where and when to spend our client’s marketing money to achieve optimal results. We know what works and what doesn’t. We work with our clients to set revenue targets and we know precisely what we have to do to reach those targets.
As Socrates said, “Wisdom begins with a definition of terms”. So let’s discuss some important terms prior to discussing the medical tourism marketing development process:
Marketing Qualified Lead: (MQL) is a prospective patient that has indicated interest in your organization. At this stage of patient development, you can’t be certain if they are qualified to purchase. An MQL must be further qualified before moving them forward along the sales development chain.
Sales Accepted Lead: (SAL) is a lead that has been formally accepted by your sales team. Generally your team should be given a set period of time to develop this lead into a sale.
Sales Qualified Lead: (SQL) is a lead that has evolved into a strong possibility for closing. These leads have the greatest opportunity of becoming patients.
WIN: This is when a lead becomes a patient.
Let’s review an example which will make the marketing budget process easier to understand and implement.
Medical Tourism Hospital X:
2014 Revenue Targets by Quarter: Hospital X wants to earn $1 million per quarter ($4 Million Total Annual Revenues)
Average per Patient Revenues: $40,000 (It will take 100 patients at $40,000/each to reach the annual revenue goal of $4 Million)
Marketing Stage Conversion Rates: (These conversion rates are for demonstration purposes only and are not to be used for marketing planning. Conversion rates vary greatly by organization and by case.)
Inquiry to MQL: 50%: (50% of Inquiries will become Marketing Qualified Leads)
MQL to SAL: 50%: (50% of Marketing Qualified Leads will become Sales Accepted Leads)
SAL to SQL: 50%: (50% of Sales Accepted Leads will become Sales Qualified Leads)
SQL to Win: 50%: (50% of all Sales Qualified Leads will become Patients.)
Time between stages (Days)
Inquiry to SQL: 120 days
SQL to Win: 90 days
(In this scenario, it would take 210 days from the initial patient inquiry to earning the patient’s business.)
If we set the hospital revenue target for medical tourism at $4 Million in 2014, this would give us a quarterly revenue target of $1 Million. If the average patient spends $40,000, Hospital X will need to close 25 deals per quarter (25 X $40,000) to reach the target revenue goal. Let’s work backward to get our sales lead totals:
- To close 25 new patients, Hospital X will need to generate 50 SQLs (SQL to WIN rate is 50%).
- To get 50 SQLs, Hospital X will need to generate 100 Sales Accepted Leads (SAL to SQL rate is 50%)
- To get 100 SALs, Hospital X will need 200 Marketing Qualified Leads (MQL to SAL rate is 50%)
- To get 200 MQLs, Hospital X will need 400 Inquiries
In summary, Hospital X will need to generate 400 inquiries for every 25 new patients won. The key to success is in knowing your numbers. The better you know your closing numbers, the more successful your medical tourism marketing program will be.
Now comes the tricky part. Deals take time to close. If you generate 400 inquires this month, they won’t close for approximately seven months. It’s critical to look at the days between stages (known as “velocity”) to understand when you will need inquiries and SQLs to make your quarterly revenue goals. Inquiries generated today will result in SQLs in four months, and won patient business in seven months. Because a dental provider or cosmetic surgery center may have a faster closing ratio than an orthopedic hospital or heart surgery center, it is important to understand the dynamics of your lead development process to best plan for your revenue goals.
Finally, we arrive at the budgeting development piece of the puzzle. This is where we discover how much marketing investment is required to generate the necessary number of inquiries that turn leads into won patients. This is where you will need the help of an experienced media marketing agency that knows and understands the optimal marketing strategy and media tools to generate the most inquiries for the least amount of investment.
With established healthcare businesses, one can look to the previous year’s numbers to plan for the upcoming year. If last year it cost you $250 per inquiry, this year you will need to invest $100,000 to generate 400 new patient inquiries…which (if your metrics are correct) should drive $1 Million in new patient business. If it only cost you $100 per inquiry last year, you should plan to invest $40,000 to generate 400 new patient inquiries. By lowering your cost per inquiry and/or increasing your marketing investment, you will be able to generate more leads and increase sales.
With new businesses, this process can be very complicated, because one must factor in the expense of patient education as well as branding and marketing tools, which can often double the needed first and second year marketing investment.
This planning and measurement process is part of a much larger marketing strategy called Revenue Performance Management (RPM), which utilizes critical data to maximize marketing performance.
If your numbers are correct, they won’t lie.
If your numbers are incorrect, they will never tell the truth.
Medical tourism marketing development numbers will vary by organization. No two hospitals or healthcare organizations are exactly alike. Do you know your “lead to closing” numbers? If not, you will need to experiment to refine and hone your marketing process lead development program.
There are many healthcare consulting firms that understand the healthcare market, but yet they know very little about the dynamics of international healthcare marketing. While knowing the theory is a good start, practical “hand’s on” medical tourism marketing experience makes the difference between a marketing program that looks good on paper, and a marketing program that drives needed results.
Successful marketing starts with planning! Don’t make the mistake of limiting your marketing budget to obvious costs such as advertising, website development, public relations, trade shows, brochures, promotions, etc. A comprehensive marketing program includes planning, tool development, creative strategy, media marketing, external communications and ongoing monitoring and tracking of your marketing efforts.
Marketing is not a science. While this article outlines some effective healthcare and medical tourism marketing guidelines, a successful marketing campaign is predicated on real world experience. When choosing a medical tourism marketing partner, select a dedicated marketing agency with critical international healthcare marketing experience.
The world of global healthcare and medical tourism is filled with opportunity.
Plan wisely. Execute precisely. Track closely.
Patrick Goodness, CEO
The Goodness Company: Global Healthcare & Medical Tourism Marketing
For the original version on PRWeb visit: http://www.prweb.com/releases/2014/03/prweb11685607.htm