Successful Budgeting For Your Medical Tourism Marketing Campaigns
If marketing can be called the vehicle that brings dreams to reality, a marketing budget can certainly be referred to as the fuel that drives the vehicle. A marketing budget has long since outlived the traditional moniker of being a financial tool that helps an organization assign enough resources to achieve its marketing objectives.
Today, a marketing budget is a proud badge of recognition that demonstrates that an organization has purpose in its marketing. It says that an organization knows EXACTLY what marketing it intends to perform and how that marketing is going to help its bottom line.
In order to design a marketing budget, on organization first needs two things; an executive in charge of marketing and a manager in charge of executing the marketing plan. The former petitions the keeper of the funds for enough budget dollars to successfully help the organization, while the latter determines exactly how much resources the former should ask for.
The most successful budget style that I have encountered is the Cost Center Budget approach. With this approach, Medical Tourism is assigned what we call a cost center. This puts it on par with all the organization’s important strategic and operational departments such as Finance, Accounting, and Sales.
More importantly, it means that your organization can now capture ALL the medical tourism costs in one place. This is a very important management tool that will enable senior management to assess the performance of the organization’s medical tourism operations.
Within this Cost Center, Medical Tourism Marketing is assigned a Cost Center Group. This means that all the marketing activities associated with medical tourism can be tracked from a financial perspective. Also, it isolates the marketing expenses from the other medical tourism efforts, such as Customer Service, Information Technology (IT), Sales, Public Relations (PR), Education and Training, and Business Processing (paperwork).
What are your marketing budget elements? In other words, what goes into your marketing budget? There’s the obvious; Salary and Fringe Benefits, IT Expense, Advertising, Event Marketing, and Promotional Merchandise. In addition however, your organization should budget for Professional Services, New Business Promotion, Purchased Services and Travel.
Professional Services will include any expenses that the organization incurs to solicit the services of professionals. Included in this line item are creative design, graphic design and website design. Website design, in my opinion, should always merit its own line item due to its importance and the need to isolate and, therefore, manage its expenses.
Website marketing is rapidly becoming the most effective (and cost effective) way to attract customers. However, the costs associated with its design and maintenance can become very complex and easily lost with the other design costs that an organization may incur.
New Business Promotion costs are those costs incurred for new products, new markets or new customers. It’s very important for an organization to capture these costs separately from ongoing promotion. Most marketing professionals operate under a timeless adage that it costs seven times as much to capture a new customer as it costs to retain an already existing customer.
In my opinion, anything that’s costing my organization seven times the cost of anything warrants its own specific attention. Plus, proper capture of these costs enables proper management of them and can provide guidance to actually reducing them, thereby becoming more efficient. ALL costs associated with new products, new markets or new customers should be captured in this bucket.
Purchased Services are those services that an organization elects to “buy” versus “build”. These costs can include printing, service measurement (customer surveys), project expenses, mail management, and special promotions not associated with any current product or service, nor with any new product or service, such as an organization’s community activities. The key to identifying which costs belong in this bucket is that they are for services (usually professional services) other than those included in the Professional Services bucket.
Travel costs might appear to be obvious and one might wonder why they warrant special attention. In one of my previous organizations, I have direct experience that suggests that excluding travel costs that are incurred because of marketing, from a marketing budget can skew the results of a marketing campaign.
Imagine a campaign that involves travel to a particular conference where your organization is a sponsor and has a booth or other display space. The costs for travel, lodging, meals and other related expenses can be appreciable and should be included in the budget in order to determine how successful that event was for your organization. ALL expenses that are incurred to get people somewhere for a special reason, should be included in the marketing travel costs bucket.
While this article attempts to simplify the budgeting process somewhat, it should be clear that capturing all your marketing efforts is important for your organization. For a particular campaign like marketing to a specific U.S. state, or a particular U.S. ethnic sector, or for a specific purpose in the U.S., the campaign should be set up to capture all the aforementioned costs.
You can never have too many campaigns; each unique in its cost collection efforts so that the success of each can be uniquely and separately assessed. In order to accomplish this goal successfully, the marketing manager and marketing department should know EXACTLY what each campaign involves. This can be achieved by creating a communications plan for your campaign.
The Marketing Manager should be responsible to ensure that all the costs are properly captured and reported up to the executive responsible for marketing. Also, the marketing manager should be responsible for determining what results are expected. How many new customers? How many referrals? How much sales? What incremental sales are expected? By balancing the expected results against the cost, an organization can establish an expected Return on Investment (ROI).
And, by balancing the actual results against the cost, an organization can establish an actual ROI. Does your actual medical tourism marketing campaign ROI meet or exceed your expected ROI?
When I was in charge of marketing at a previous employer, I created a campaign for every promotion. We tracked every campaign. We were able to identify and continue successful campaigns and actually improve them. We were also able to discontinue unsuccessful campaigns so they didn’t drain much needed resources.
That particular product achieved $40 million in revenues in the first year and a retention ratio of almost 80% in the second year. Both achievements are considered excellent for the competitive market of the product. We are so committed to the concept of using marketing budgets, that we have created a presentation that demonstrates how to create a medical tourism marketing budget.
Make sure your organization has a budget method that enables it to capture all medical tourism marketing costs. Make sure that you establish expected results, against which actual results can be compared. Using a marketing budget for each campaign will help you achieve this. It will help you demonstrate the success of your Medical Tourism Marketing Program.
With over 17 years experience in Insurance, Marketing and Employee Benefits Management, Alex Piper possesses extensive knowledge of the U.S. Healthcare Market and the influence that Insurance Carriers, U.S. Employers, Hospitals, Physicians, Physician Groups, Healthcare Professional Organizations and Government will have on the next generation of global healthcare.
He is the President of OneWorld Global Healthcare Solutions, a consulting company committed to creating a worldwide healthcare solution. He can be reached at: email@example.com or www.OneWorldGlobalHealthcareSolutions.com