Healthcare resides within a rapidly evolving marketplace, resulting in a critical need for incisive strategic planning. In early 2009, Princeton Partners Health and HealthStream Research teamed up to survey healthcare executives, with the aim of determining where marketing fits into strategic planning and how market research and funding impact success.
The survey was completed by 66 healthcare executives, including CEOs and marketers. In analyzing the results, three gaps emerged:
- The finance gap. Organizations that do not fund strategic plans are less likely to achieve strategic aims.
- The market research gap. Organizations that do not conduct market research are less likely to have a strategic plan.
- The marketing expertise gap. Organizations that do not integrate marketing into the process tend to experience implementation challenges.
The impact of these revelations should be of interest any organization seeking to address what promises to be several years of significant transformation.
The finance gap
When it comes to tactics, the best-laid plans are powerless without resources to support implementation. Yet 12% of survey respondents reported that no financial resources were allocated to support strategic initiatives.
This is a critical error. It can be argued that a strategic plan not supported by a financial plan is powerless to affect change. Implementation requires capital, and larger organizations seem to know it: 100% of those surveyed from organizations that allocate more than 2% of revenues to marketing fund their strategic plans. For those allocating less than 2%, the funding rate falls dramatically to 63%.
The market research gap
As a roadmap for how to leverage opportunities, strategic planning should be grounded in market research. In fact, research may itself be a predictor for the likelihood to have a strategic plan: Only 59% of organizations which did not conduct research in the past two years had plans, versus 98% of those which did.
The importance of research cannot be overstated. It provides the metrics by which to derive direction. Among those with strategic plans, the impact of its absence was immediately apparent: Only 75% of those without research achieved some or all of their objectives, versus 91% of those which had.
In fact, organizations that conducted research were three times more likely to have achieved all of their former objectives—a point that organizations should consider before red-lining research out of the budget.
The marketing expertise gap
In the very near term, healthcare organizations will require strategic marketers, not just tacticians. According to a 2009 marketing survey from HealthLeaders Media, the role of marketing will shift over the next three years from an emphasis on research, PR, and advertising to responsibility for patient experience, physician relations, business strategy, and advertising1.
Still, in our research, 26% of healthcare organizations report having left marketing out of strategic planning. The percentage spikes to 44% among those without a foundation in research, and 48% of those that spend less than 2% on marketing as a percentage of revenue. In this regard, large hospitals are leaders. A full 89% of hospitals with admissions over 10,000 involve marketing in strategic planning, compared to 50% of smaller institutions.
Outside expertise also plays a role. Healthcare organizations that use a marketing or PR agency were 12% more likely to report having achieved some or all of their strategic initiatives. Still, 25% use their agency solely to complete tactical initiatives.
A bottom-line view of the future
As the strategic goals of healthcare organizations shift in response to the changing marketplace, marketers must be more fully integrated into strategic planning. Healthcare organizations that do a better job overcoming financial, research, and expertise gaps are more likely to achieve strategic aims. Moreover, an empowered marketing leader enhances the ability to accurately assess an organization’s needs and plan successful initiatives to achieve them.
This is the first in a three-part series exploring the importance of strategic planning to today’s healthcare organizations. Future installments will explore more fully the role of marketing within healthcare and the importance of market research and brand positioning.
1.“Marketing Leaders See Change Ahead,” Gienna Shaw, HealthLeaders Media Industry Survey 2009, HealthLeaders Media, Marblehead, MA
