Consumer healthcare companies have a valuable opportunity to use their data to make smarter strategic decisions – but they must proceed with caution.
Consumer healthcare companies face the same demands over customer acquisition, conversion and retention as other consumer-facing businesses. Yet whilst there is an awareness that utilising data to make smarter decisions around marketing and products, is a good thing, they’re also conscious that a healthcare business is not the same as one in the retail sector. Their relationships with customers, which may endure for many years, are often much more personal and sensitive; their responsibility to use data safely and securely is even greater.
Yet capturing insight on your activity from demand generation to life-time value of a customer will build conviction behind your marketing investments. It will surface how customers engage with your product or service as well as providing capabilities to reduce ineffective spend and double-down on high demand and ROI generating cohorts.
The data challenge
The first challenge is to understand what data you have already, what is missing and how to track it.
Find out who in the business owns this data and get them involved from the start, working together to ensure that the data is of the quality required to generate insight that is accurate and valuable. Most importantly, understand how you’ll build a relationship between the data sources. For example, how do you identify the same customer in your paid search data and your finance system? Healthcare services seldom have an immediate link between your marketing campaign and eventual service acquired, which may only exist as a simple order line in your finance system.
As part of this data journey planning, think about all the touch points that either incur costs or generate revenue. For example, if you’re buying ads on Google’s paid search platform, you will need keyword level data to tell you what keywords are driving demand and the types of activity it is driving to your site (e.g. calls to sales team, online enquiry forms, etc). If acquiring more customers means you need to scale up your team then recruitment and training costs must be built in as part of your ‘data capture’ process.
In healthcare, it can be difficult to join the link between demand generation (how the customer found your service) and the characteristics of the customers you’re acquiring. The services offered can be as broad as they are niche. Concentration of care can change, for example, by age, gender or geographical location for the same service provided. It can also be difficult to track the customer to understand how valuable they are – or can be – to your business. But if you want to understand the ROI of your acquisition strategy, you will need to understand the lifetime value of that customer.
Segment but keep it simple
To find lifetime value, you’re trying to evaluate the total revenue generated over the entire customer engagement vs. the total cost of acquiring that customer. If your data is well organised and structured, and you have made the link between demand generation and the services they require, it should be possible to ‘drag and drop’ data sets into the analysis and identify key segments accordingly. The best place to start is by looking at the customer demographic. How does the life-time value fluctuate between these cohorts?
Once you have identified the core cohorts driving life-time value, you can now evaluate the ROI they’re driving by dropping in the marketing channels that delivered those customers, and the affiliated cost to do so.
Be careful not to over-complicate the analysis though. If you focus on too many groups, you’ll end up with insight that is too granular and small-scale to use as the basis for credible decisions. Instead, keep the segmentation process as simple as possible – consolidate conditions with care types, use high level age grouping, North, Mid and South England rather than ‘Kentish Town’ – and then build out further cuts of the data over time as you need them.
Capturing the value
The more data healthcare businesses build, the more value it creates. However, you will not start to ‘capture’ that value until you understand the relationship between acquiring customers, serving customers and the idiosyncrasies that lie within its cohorts.
When you can build a relationship between the cost of acquiring customers today within the expected revenue generated over their entire engagement, you will have the conviction behind your marketing spend that allows scale up of your marketing campaigns.
Your marketing strategy will evolve from a broad ‘customer acquisition’ strategy to highly relevant targeted cohort campaigns which are measurable across the entire customer data journey. You’ll have strong analytical foundations that accelerate demand generation, with a tight business case to support board investment.
If you’re a business owner in the healthcare sector, please contact investments@livingbridge.com to find out more about how we help growing businesses.
Please click here to find out more about our experience in the healthcare sector.
