What Coca-Cola Can Teach Hospitals About Marketing Budgets
Summer’s coming to a close, and it’s time to start thinking about everyone’s favorite topic: budget planning for next year! Luckily for you, we’ve got some tips for you to make your 2015 budget a success.
To echo the authors of Freakonomics (and a previous blog post), the first step to thriving in business is creating a baseline of data that can be used to guide future decisions.
For healthcare marketers, that means figuring out what impact your investment, whether in dollars or people-hours, is making on your business goals.
The 70/20/10 rule
Once you quantify your marketing, you should crack open a Coca-Cola and apply some of the ideas from their content marketing strategy. Jonathan Mildenhall, who was VP of Global Advertising Strategy for Coca-Cola at the time of the video (now the CMO of Airbnb), recommends applying the 70/20/10 investment rule to your marketing budget.
Note: Before engaging in this exercise, it’s critical to establish how effective your existing marketing activities are at fulfilling your business goals.
70% of your budget should be allocated to “traditional,” or “low-risk” marketing initiatives. Low risk means that you know they work. They are the day-to-day, listed-in-your-job-description activities that no one ever questions. That could mean pitching patient success stories to the local media, making brochures that will sit in waiting rooms, and buying Google Adwords that point to strong web content about your service lines to convert potential patients. Mildenhall suggests spending 50% of your people-hours on the traditional.
20% of your budget should be allocated to “innovation.” The results should be based on what’s already proven to work in the “traditional” or “experimental” realm, but targeted to a specific audience. Mildenhall suggests spending 25% of your people-hours on innovation. For hospitals, marketing innovation could mean setting up blogs for your important service lines to engage potential patients and boost SEO, or digitizing the instructions patients get upon discharge, or building price transparency into your website so patients don’t have to research how much everything will cost.
10% of your budget should be allocated for “experimentation,” with the other 25% of your time spent on it. This 10%, if it works, could be part of your 20% or 70% in the future, and if it fails, you and your team “failed fast” and gained insight from it without too much investment. Some examples of this could be exploring HIPAA-compliant video consultations with Google Helpouts (see One Medical Group), trying re-targeting advertising for visitors to your website, or building micro-sites or “conversion” pages for a service line.
Having a defined “experimental” project budget also is a promise to yourself and your higher-ups that you won’t go too far into the weeds on unproven ideas, but you’re open to the possibility of trying something new. Not having one is a self-limiting prophecy.
Next Year Starts Now
Excelling at marketing in 2015 starts in 2014. By stepping back and establishing a baseline of marketing performance right now, you can make a proactive plan that addresses your weaknesses and amplifies your strengths. Your competition won’t know what hit them.