Know When It’s Time to Expand or Change Your Brand
Brands should be designed for the long haul. The whole idea, after all, is to build trust and a relationship for long-term loyalty – and it helps to have a staunchly consistent brand name that your audiences can relate to in an unwavering fashion.
Situations change, however. And few market categories have seen landscape shifts as frequently as healthcare.
Certain circumstances can dictate that it’s time to expand or change your brand. Consider these situations:
- Diversifying service lines. Many organizations that started exclusively as a hospice provider have expanded and diversified their service offerings. In addition to palliative care, organizations are capitalizing on their healthcare skills to offer other services including home health, transitional care and private pay nursing. Some organizations are even looking at forming or joining a community with accommodations for the needs of healthy, active seniors to assisted living to skilled nursing to hospice care, so residents can “age in place” for a considerable length of time.
These services not only can provide extra revenue streams, they can build relationships with patients and families much earlier in the continuum of care. If a single organization can maintain that relationship until the end of life, they have the opportunity to provide the highest quality care at the right time while maximizing reimbursement for each patient.
But there’s more to the story. As competition continues to heat up, providing outstanding care is becoming table stakes for organizations to survive. In addition to the quality of care, what is the quality of experience each patient (and their family) receives along the continuum?
When organizations want to diversity and differentiate, they face a few crucial decisions about their branding and marketing. Should all services be named and promoted under a single, unified umbrella brand? Or should service line brands be tailored for their respective roles? How do you prioritize marketing budgets for the respective services? Do you target patients and families more heavily or appeal more to referral sources? How do you convey the emotional richness of the care experience you provide?
There is no single “right answer” to any of these questions. The details of each market will drive the best solution. Start with quantitative research of your target audiences to help determine which path will resonate the most in your communities.
- Mergers, acquisitions and affiliations. A growing number of hospice organizations are finding strength in numbers – especially among not-for-profit providers. Transcend Strategy Group is working with or talking with providers in various parts of our nation who are joining forces to form a larger entity or a collaborative affiliation.
As that happens, the participants are asking if they should retain their individual brands or form a new, single entity? If they keep their individual brands, should they create a brand for the affiliation? How can they share marketing resources and gain efficiencies?
Many organizations have a hard time letting go of their hospice brand name that has served their respective communities for 30 years or more. One effective way to gauge the degree of brand equity is to do statistically significant research among the target audiences. Transcend has found that, typically, fewer than 10 percent of family healthcare decision makers can correctly name a single hospice brand in their communities with unaided recall (which means asking the open-ended question of “Who are the providers of hospice care in your community?”)
If equity isn’t high for an existing brand, it’s a little easier to make the decision to form a new, unified brand for the joint entity. Significant advantages exist for a single, unified brand. As providers offer a true continuum of care, it’s easier to build relationships with patients and families earlier in the continuum and refer downstream to a service line with the same trusted brand name. A single brand also allows complete continuity and consistency in promoting one brand name rather than supporting several brands.
Still, we often see collaborating providers insist on keeping their individual hospice brand names intact. In that case, we frequently recommend developing a brand for the affiliation. The affiliation brand serves as an endorser of quality and provides a cohesive thread to mark the relationship of all participating providers as well as their service lines. You see this approach in the consumer goods world with products that are tagged “SC Johnson – a Family Company.” An endorser brand also can work well for other services targeted toward older adults, even if it’s a planned community for aging in place.
- Tighter marketing budgets. Even though many hospice and palliative care organizations are adding entities they should be promoting, most are faced with the pressure to spend more on clinical care and operations – and less on marketing.
So how do you balance a need to promote a growing list of services or brands with the reality of budget constraints? And how much should you be budgeting for marketing purposes anyway?
Since the vast majority of hospice organizations would be considered small businesses in the corporate sense, consider this: The U.S. Small Business Administration recommends spending 7 to 8 percent of your gross revenue for marketing and advertising if you’re doing less than $5 million a year in “sales” and your net margin — after all expenses — is in the 10 percent to 12 percent range. Some marketing experts advise that start-up and small businesses allocate between 2 and 3 percent of revenue for marketing and advertising, and up to 20 percent if you’re in a highly competitive region.
Thus, it’s apparent that your marketing budget depends on a variety of factors but should certainly be no less than 2 percent of your gross revenue.
Regardless, there’s a demand for marketing strategies to work harder and smarter. Let’s remember a significant role of strategy is to prioritize needs and decide what NOT to include as well as what to focus on.
Two major considerations for deciding which entities to market are: (1) Your expectations for ROI and (2) A realistic timeframe to generate that return on your marketing investment. For example, if an organization introduces a new palliative care service line, how should they invest to promote it? With the current weak reimbursement for palliative care, short-term ROI would be nearly impossible. But if palliative care creates earlier conversion to hospice care and substantially longer hospice LOS, the ROI in hospice revenues may be very rewarding in the long run.
Another determining factor is deciding to whom a particular service should be marketed. Palliative care, for instance, may not be suitable for broad marketing to the consumer audience, but sustained by controlled marketing to select physicians and hospitals. These highly targeted niche audiences may be reached much more cost-effectively than a broader mass media campaign.
Tighter marketing budgets also plead the case for a single, unified umbrella brand. Although the initial investment in creating a new brand is substantial, sustaining a single brand for the long term is much more efficient than supporting multiple brands that may lack apparent connectivity.
Many other questions and challenges can arise when it comes to developing an effective brand and a smart, strategic marketing plan to grow it. Transcend can help give perspective to an approach that makes sense for your goals. Contact Jon Marker, business development manager, to begin the conversation.