Creating Marketing Forecasts Like You Had a Crystal Ball (Part 3 of 7) 

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November 22, 2022

This post is the third in a seven-part series on healthcare marketing, which outlines six critical phases of marketing that healthcare marketers should master to accelerate patient/client growth, increase revenue, reduce marketing expenditures, and build a high-performing internal marketing team.
We call these six critical phases OPTICS, and part one of this series gave an overview of the OPTICS framework, and part two discussed the first phase, Orient. In this post, we present the second phase, Predict, the process for planning, forecasting and communicating goals and objectives for the next 90 days, 12 months, and 3 years. We address the remaining phases in subsequent posts weekly.

Checkout the entire series:

When it comes to marketing, wouldn't it be nice to have your own crystal ball?

One that you could gaze into and predict marketing outcomes, where you could know with certainty whether the goals you set at the beginning of the year would become a reality at the end of the year?

Once you have your OPTICS™ process in place and firmly entrenched within your organization, you’ll be amazed how accurate your forecasting will be… almost like you’ve got a crystal ball.

During the Orient phase, the first of six phases that comprise the Framework, you looked at your current state as well as your past performance to determine what was working and what wasn't. Now, with hard data in hand, it’s time to establish new visions, set goals, and prepare forecasts.

Whereas the Orient phase is about reviewing where you’ve been and getting a clear picture of where you are, the Predict phase is about visualizing and mapping out where you want to go.

During this phase, you will create a three-year vision for the future, as well as a one-year evidence-based, goal-oriented financial and marketing forecast. That includes setting challenging yet attainable quarterly goals, planning your budget accurately, and creating a detailed KPI scorecard and campaign calendar. 

Start by Casting a Vision

Most marketing departments come up short, because they don’t know the end game. No one bothers to share with them the company’s growth targets for the quarter or year. Instead, the marketing department gets peppered with a constant barrage of requests that amount to nothing more than tactics without any clear objectives or cohesive strategy.

When a marketing team only gets directives in the form of tactical requests, no one is happy with the results.

That’s why the Predict phase is so important. During the Predict phase, you cast and communicate your vision. That vision is the foundation for a clear, achievable, and compelling marketing plan. The vision and the plan are the key to achieving company goals.

You start the Predict process by creating a three-year vision. Where do you want the company to be in three years? What will revenues look like three years out? What about profits? What about employee headcount? How about a patient/client census? How many active patients/clients would you like to see in each service line or product line?

And how about lifestyle?

What are you seeing there for yourself, your family, your business, and your employees? Will you finally take that vacation you’ve been putting off? Will you be able to pay for that wedding coming up? Or will you buy that new car or house you’ve been eyeing?

Create a vision that motivates you as well as your team.

Heck you might even consider keeping that vision taped to the wall next to your desk or on your bathroom mirror at home, so you can look at it every day.

Once you’ve got that picture mapped out, it’s time to start chunking it down into three 12-month cycles. They key forecast here is the one for the next 12-months. You’ll want to ensure that the trajectory is in line with hitting your three-year vision.

At that point, you’re going to want to break your upcoming 12-month forecast into quarterly chunks.

Communication throughout the organization of each quarterly chunk is critical not only to the success of your marketing team, but to your entire company, as well.

Jack Stack, in his books The Great Game of Business and A Stake in the Outcome, really breaks down the benefit of financial transparency, and it’s something I highly recommend, as well. This level of transparency is motivating for all employees, helps get everyone on board, and fires everyone up to celebrate wins along the way.

Once these forecasts have been created and documented, you’ll want to make sure you communicate the goals company-wide. Your marketing team needs to take those forecasts and break them into specific, measurable objectives that can then be broken into campaigns and KPIs.

You want them to get excited about seeing the vision become a reality. Help them understand their role in achieving it, and how you will hold them accountable for their contribution. Break the vision into quarterly goals, accompanied by quarterly meetings where everyone receives their marching orders for the next 90 days. 

Plan Your Marketing Budget

With the vision and forecast in place, it's time to carve out your annual marketing budget. So how do you go about setting a budget?

A lot of businesses allocate around 5% of their total revenue, but I’ve seen companies go as high as 15% and as low as 1% (assuming the budget isn’t zero).

I’m not a big fan of using revenue-based percentages as a way to set the coming year’s marketing budget. The way I like to plan a budget is based on how much I want to grow in the next 12 months. Realistically, your marketing should return at least 5 to 1.

In other words, for every dollar you spend on marketing, you should get 5 dollars back in revenue.

That said, if you want to increase revenue by $1 million, and you have no outbound sales efforts (salespeople making cold calls on new customers) then you should probably look at investing $200,000 in marketing. If your sales team is responsible for bringing in a specified amount of revenue without the aid of marketing, then you’ll want to adjust your numbers.

In the example above, if you did a total of $2 million in sales last year, then the $200,000 would be 10% of your revenue. If you did $20 million in sales, then the $200,000 marketing investment would only be 1% of revenues. You can quickly see how different the two approaches to setting a budget are when it comes to the final number.

Of course, all of those numbers will change depending upon salaries in the marketing department, salaries in the sales department, commissions paid to salespeople, and the type of products or services you’re selling, so it will take some massaging to really pinpoint a realistic marketing budget that will ensure you achieve growth objectives.

It’s also important that you look at the total marketing budget contrasted with what we call the "marketing execution budget," which refers to the cost of tactical execution exclusive of the cost of personnel. Realistically, your execution budget should exceed 65 to 70 percent of the total marketing budget.

Once a marketing budget is established, commitment to deploying that budget resourcefully is key.

That’s another reason why it’s important to have the right people in the right seats. You want someone in charge of marketing who has the authority and trust to deploy that capital effectively.
You don’t want a situation where the lack of trust forces the marketing team to get approval from the CEO or CFO every time a dollar of marketing budget is to be expended. That is an exercise in futility and only slows the marketing team down and impedes their ability to execute.

That's also where a lot of physician owners and CEOs make a mistake. They think they must approve every expenditure down to the tactical level. That rings a death knell to progress and effectiveness.

If you charge the marketing team with accomplishing a 90-day or 12-month vision and goals, and you've given them specific authority to spend the budget, then trust the people in charge to deliver. Give them parameters, limits, and the leeway to allocate the funds as they see fit. 

Create a Key Performance Indicator Scorecard

During the Orient phase, you assessed your success: what went well, where you came up short, and the reasons why. Was the messaging at fault? Was it the audience, timing, or a flawed execution?

Addressing those questions requires specific KPIs and metrics related to your tactics. It’s critical that you create a Key Performance Indicator (KPI) scorecard, so that everyone can track performance as close to real-time as possible.

It’s important that you understand which metrics matter and which ones simply create an illusion of success.

We call the latter “vanity metrics.” They’re the metrics that make you feel good, but ultimately, they’re not an indicator of success.

For instance, if the only metrics being tracked by your web team are Total Website Visitors, Unique Visits, and Time Spend on Page, those are interesting numbers, but they’re not easily translated into dollars if you don’t know the rest of the story. You need to know actionable metrics like Website Conversions, Inbound Phone Calls, Downloads, or New Subscriber Growth, if you really want to have metrics that can help you fine tune your marketing and get better results.

Customize your KPI scorecard to inform everyone about the progress being made toward revenue and patient/client growth.

An ideal way to approach scorecard development is to ensure that each metric is assigned to someone on your team, and the assigned person is responsible for that metric hitting a desired state. That way, at any given moment, team members can look at the scorecard, know where they stand, and know what needs to happen in order to improve outcomes.

For example, if you’re hosting an online webinar, then someone should be responsible for signups, show ups, no-shows, and follow up emails. Someone else might be responsible for email invitations sent, open rates, click through rates, and bounce rates.

If there is a high click-through rate but a low signup rate, they you know you probably have a problem with the message on the signup landing page. The person accountable for the signup rate metric needs to review the landing page to see where visitors might be getting tripped up.

The bottom line is, assign each KPI to a unique individual on your team, so when you get to the Calibrate phase ("C" in the word OPTICS), the accountable person will be on top of things.

Develop a Detailed Campaign Calendar

The revenue forecasts you create during the Predict phase are really going to dictate what you need to do in the way of strategy, tactics, campaigns, and timing. The campaign calendar is a great way to quickly see at a glance everything that needs to be executed during the month, quarter, and year.

The calendar is simply a written schedule of current or future marketing campaigns. It tackles the where and when of your workflow and keeps teams organized around the status of tasks or campaign progress.

The goal of the campaign calendar is to let everyone know what's going on at any given moment, so new requests can be prioritized within the context of the calendar.

It’s not unusual for business owners or physicians who aren't aware of the marketing backlog to make frequent new requests of their marketing team without fully understanding the time commitment involved.

Creating a campaign calendar along with a Gantt chart illustrating components and timelines can really help in executional efficiency, but it can also help a busy CEO understand the impact of throwing more tactical requests into a marketing department that’s running on tight deadlines.

Developing a calendar doesn't involve designing each campaign in detail — that comes later. The calendar documents marketing activities throughout the year at a high level based on marketing priorities.

For example, a quick glance at your campaign calendar might show you that you’ve got a special event in February, blog posts every Tuesday and Thursday, social media posts every weekday except holidays, a radio and television campaigns in March and April, and a set of YouTube and Facebook ads you’re running from January through the end of March.

Conclusion

The Predict phase is all about casting a vision and a forecast to cement in everyone’s mind where you want to be in 90 days, 12 months, and even three years out. As you get better at the entire OPTICS™ process, you’ll begin to see the prognostications from your Predict phase become more and more accurate over time… almost like your own healthcare marketing crystal ball.

Once you’ve planned your budget, assigned relevant KPIs, and developed a high-level campaign calendar, you’ll be fully prepared to move on to the next phase, Target, where things will get much more detailed. That’s exactly what we’ll cover in the next post, and you’ll want to read it because in it we’ll show you how healthcare marketers fail at messaging and targeting.

The OPTICS™ Framework is a proven, six-step strategic process that helps you create a powerful marketing team that can accelerate your growth and profitability, even in the face of a recession.

Over time, OPTICS™ will make you feel like you have your own, personal crystal ball.

Once OPTICS™ is fully implemented, you’ll be able to articulate your vision and goals, develop short- and long-term marketing strategy, create alignment with your marketing team and vendors, establish and monitor actionable KPIs, and fine-tune the process to ensure consistent executional excellence.

If you want to identify your organization's marketing strengths and weaknesses, take our 20-question self-assessment to identify quickly and clearly, which of the six critical phases are holding you back from achieving your revenue growth goals. 

To learn more about the process and how it might work in your organization, schedule a no-cost diagnostic session with one of our implementation specialists.

This post is the second in a seven-part series on healthcare marketing. This installment looks at the first of six critical phases healthcare marketers need to go through to accelerate patient/client growth, increase revenue, reduce marketing expenditures, and build a high-performing internal marketing team. We will address the other phases in subsequent posts bi-weekly.

Checkout the entire series:

Check out the rest of the series:

November 15, 2022

November 17, 2022

November 22, 2022