6 must-know healthcare marketing metrics to prove ROI
April 19, 2024
As a healthcare marketer immersed in day-to-day operations, you can easily get bogged down by the number of metrics you look at — click-through-rates, email open rates, impressions, and shares, just to name a few. It can be difficult to take a step back and look at the bigger picture:
What am I doing to generate return on investment (ROI) for my organization?
Calculating the ROI of marketing efforts is vital to the success of your overall marketing strategy. You want to do more of what’s generating revenue and ROI, and you need to do this strategically.
Narrow your efforts to specific metrics that impact business to gain a clear picture of your successes versus failures. Let’s walk through six key metrics.
1. Audience quality
In your marketing campaigns, ensuring you are reaching the right audience is crucial for success. Audience quality metrics serve as a vital tool to confirm your campaign’s effectiveness in reaching and engaging potential patients and members who are most likely to take meaningful action throughout their healthcare journey. These metrics depend on your campaign’s objective — whether it’s driving awareness, engagement or conversion — and correlate with key indicators of audience engagement and conversion potential. By prioritizing audience quality, you not only maximize your marketing investments, but also enhance your effectiveness in acheiving your campaign goals.
2. Leads generated
The number of leads in your marketing pipeline is an important metric to look at when determining ROI. Show the number of leads per active campaign and note where they are in terms of completion (acquisition, engagement, conversion), otherwise known as a lead’s “funnel stage.” It’s also important to understand lead generation from a channel perspective — what channel is the first touch? And what channel leads to conversion? With a deeper understanding of how leads are interacting with your organization, you can make adjustments to improve effectiveness and how quickly the leads move from top of funnel to conversion.
3. Conversion rate
Campaign conversion rate, within marketing, refers to the percentage of patients that complete a desired top of funnel goal out of the total number of campaign targets. Your goal is a high conversion rate, indicating successful campaign design and targeting. To evaluate the conversion rate for each campaign, first determine what your goal is so that you know what to measure as a conversion — is it registering for a webinar? Filling out a form? Scheduling an appointment? Then, select a time period during which to calculate conversion rate, typically monthly or quarterly.
Clinically speaking, you should also strive for a clinical conversion rate or lead-to-patient conversion goal, meaning a percentage of top-of-funnel leads that clinically convert. However, it is important to note that this goal cannot be solely managed or owned by marketing and should be a joint effort between marketing and clinical operations.
4. Acquisition costs
Acquiring new patients and members is one of the most important jobs healthcare marketers have, so proving the effectiveness of acquisition-focused marketing efforts is critical. Since acquisition tactics span a variety of channels, e.g., digital, direct mail, programmatic, and specific campaigns, cost-per-acquisition (CPA) should be broken out by both channel and campaign. In other words: how much does your marketing department need to spend within a specific channel or on a particular campaign to grow volume?
Breaking out CPA by channel and campaign gives visibility into which marketing activities are the most effective. Use intelligent attribution tools, such as a healthcare CRM, which collects, organizes, and analyzes marketing data to measure the efficacy and ROI of your campaigns by channel, to carefully track the channels and campaigns that are successfully acquiring patients and members.
Since many consumer journeys are multi-channel, meaning they begin through one channel, such as email, and eventually expand to other communication channels, like the call center, you need to decide how to represent this in CPA data. Whatever you choose, ensure you keep metrics consistent on reports over time. This way, you’re accurately comparing like data and can develop long-term CPA trend insights.
Please note: It’s normal for different service lines and different markets to vary in terms of CPA. For example, a cardiac valve campaign in one region might have a CPA of $240 while a bariatrics campaign in another region is $100. Understanding these variances will help you make more intelligent decisions about how to allocate marketing dollars to align with key service lines and your organization’s overall goals.
5. Consumer engagement
Engaged health consumers are dialed into their own care, which results in better health outcomes, higher retention rates and lifetime values, and lower costs. Healthcare marketers can boost consumer engagement by forming trusting relationships, accomplished by personalizing interactions, adhering to the consumer journey, and coordinating across departments.
Engagement helps marketers understand how consumers respond to outreach efforts and how likely they are to convert. Calculating engagement metrics also helps direct and refine healthcare marketing strategies. Measure engagement by gauging interactions — clicks, impressions, shares, comments, calls into the call center— and reviewing satisfaction rates.
6. Contribution margin
Your contribution margin shows how much revenue you have available after you subtract variable costs. Variable costs are expenses that fluctuate with the quantity of revenue produced, such as ad-buying around healthcare key phrases, printing fees for informational campaign pamphlets, and expenses involved with hosting events and seminars.
Contribution margin = revenue – variable costs
Analyzing contribution margin helps you determine which marketing efforts — broken out by campaign or service line — to continue (and which to shelf). If the contribution margin for a specific marketing initiative, like a conversion campaign for orthopedics, is negative, what this campaign is returning is not enough to justify what you’re spending.
In addition, it’s important to understand how the payer mix can impact your ROI. The payer mix refers to the ratio of patients your organization treats that have private insurance versus Medicare and Medicaid. Reimbursement rates from commercial payers are significantly higher (by 50 to 100 percent) than Medicare or Medicaid reimbursement rates.1 The takeaway here is simple: treating patients with commercial insurance typically results in greater ROI and keeping a healthy balance is key.
Thus, you should reevaluate this campaign, perhaps by altering the outreach method to a less expensive one or by switching to a service line target with a lower CPA. If the contribution margin is positive, you are proving ROI and contributing to profit. It’s important to keep in mind that your contribution margin can be positive even if your conventionally-calculated profit is negative.
Final thoughts
Aligning marketing efforts with ROI is entirely dependent on data — gathering it, analyzing it, and using it to make strategic decisions. Therefore, ensure your organization has a plan in place for managing your data. It can also be beneficial to utilize reporting dashboards that consolidate ROI metrics in one place, making presentation to the C-suite much simpler.
Proving ROI in healthcare is essential to get C-suite buy-in, which affects available budgets and resources for the future. By focusing on the financial impact of marketing efforts, you appeal to C-level executives’ interests and show them why your healthcare marketing department is driving results (and deserves their support).
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