As a marketer for a healthcare company, you’ve probably heard it all before.
“We have a sophisticated audience. They don’t care about blogs or social media.”
“Our sales cycle is long and complicated. We should be spending our time making calls, not writing marketing material.”
“We just can’t prove our marketing efforts are driving sales.”
It’s frustrating when you feel like your CEO or others at your organization just aren’t on board with your marketing efforts. Healthcare marketers, especially those in the B2B sector, face unique challenges. They do tend to have a sophisticated audience and a lengthy sales process. Their customers aren’t just buying a brand; they’re typically making an investment worth thousands, even millions of dollars.
But it’s not true B2B healthcare marketers can’t prove their worth.
Consider the case of Axis|SybronEndo, which sells dental equipment including a patented instrument to make root canals faster and safer. The company hired our marketing agency to help them promote its latest product. We used a multi-channel marketing approach that included advertising in industry journals, social media and a microsite to capture leads once they expressed interest.
Within the first month of the campaign, Axis|SybronEndo received 421 requests for demonstrations and 55 new customers. The company saw a 631 percent increase in its sales qualified leads.
Showing ROI in B2B healthcare marketing is possible, but it may require you to revisit some traditional marketing metrics. If you're trying to prove your worth, here are three B2B healthcare marketing metrics to consider.
Any CEO worth his or her salt will ask about the return on investment, but measuring ROI for B2B healthcare marketing isn’t as simple as it might be for other investments. For one thing, it’s difficult to prove your marketing efforts directly led to a sale without a closed-loop system between your marketing and sales departments. When a lead contacts your sales representative after visiting your website or clicking on an email, the marketing efforts that brought them there often get lost in translation by the time that rep closes the deal.
Unless marketing and sales are using a marketing automation system and CRM that communicate with one another, your sales staff is probably taking most of the credit for the revenue from new customers.
Before you’ll be able to measure any kind of meaningful ROI that links back to your marketing efforts, you need to make sure your sales staff can easily see where your leads originate. You also need to agree on what constitutes a sales-qualified lead. Your marketing department could be sending over hundreds of leads each month, but if the majority of them aren’t ready to talk about your solution or aren’t qualified to make a decision, those leads don’t amount to much.
First, focus on establishing a process where marketing can efficiently qualify leads and hand them off to your sales team only when they’re ready for a discussion. Then be sure you agree about what factors indicate sales readiness.
Once you have a plan in place for managing your leads and connecting them to your marketing efforts, you need to measure the total costs of those efforts and determine what they brought you as a result. Healthcare marketing expert David Marlowe calls this “Effort ROI” and offers a helpful formula for measuring it.
Effort ROI = (Net revenue minus marketing expenses) divided by marketing expenses, multiplied by 100
Your marketing expenses include everything from the estimated time your staff invested in the project and their combined hourly wage costs to the user fees for your marketing automation software, multiplied over the period of time you ran a particular marketing campaign.
Attracting new customers can be costly and time-consuming, especially for healthcare marketers. That’s why it’s important to focus not only on the leads you bring in, but also on the costs of acquiring each one. First, consider what your organization is spending now to attract, nurture and close those leads. Then focus on what you can do to reduce that number. If you can prove you’ve accomplished this, your executives will be more likely to respond to your budget requests.
In addition to looking at customer acquisition costs, consider the average length of time the customer is likely to stay with you, based on typical churn rates, and multiply that by the gross margin from the customer across that length of time. This will give you a total lifetime value for your average customer.
Financial metrics like ROI and CAC hold strong appeal for your CEO, but they don’t tell the whole story. You might be wondering where other efforts like social media and email fit in. They’re helpful for establishing brand awareness and distributing your message, but you can’t actually prove they lead to sales, right? Wrong. You just need to dig a little deeper to show their value.
Engagement metrics like Facebook likes, retweets and email open rates tend to get a bad rap because while they might boost your ego as a marketer, they seem arbitrary to a CEO. Instead of focusing on those numbers, look at how many new leads originated from social media, email and organic search and ultimately became customers. HubSpot's marketing automation software makes this easy; the sources report categorizes your leads and customers based on how they found you.
Here's an example of what it looks like.
You can see that over the past year, three people who found this company through organic search (meaning they typed a keyword phrase into Google), ultimately became customers. One person became a customer after first engaging on social media. That may not seem like a lot, but as you know, quality counts more than quantity in your industry. A single customer could mean a million dollars or more for your company.
That customer could become a fifth of your company's annual revenue. Because you can easily see who it is, you can directly tie their spending to your efforts.
Healthcare companies that market directly to patients may look at this a bit differently. It might be more difficult for them to tie their marketing efforts to visit due to the various systems they use to manage interactions. For them, engagement metrics could be even more useful, at least for the patients they can track within their database.
Here are some additional metrics they can use to show the value of their efforts:
Other valuable metrics not directly tied to marketing include:
Although these metrics involve much more than marketing, your department can play an important role in gathering them through email surveys and data monitoring.
You're in the business of serving people in a highly personal way, so the success of your marketing efforts should be tied to people-centric data as well as financial metrics.
What metrics does your organization measure? Which do you think are most telling? Share with us in the comments below.
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