You simply cannot market your healthcare practice/business if you do not know to whom you are marketing it. Your practice has a catch basin (geographic location where your patients live and work) and target groups that you must define in order to get the most out of the money you spend on marketing and growth initiatives. I’ve divided this topic into two parts, since there are various aspects that you should know.
The catch basin:
Often physicians struggle to define the area where their patients live and work due to outliers; patients who come from afar but do not often visit your practice. When I ask a new client how big their catch basin is, I am often told that it is quite large. I usually hear answers like: “We have patients coming all the way from xyz, which is 50 miles away.” or “Last month, I had a patient that flew in from California.” This may be true, but what is the percentage of patients that come from so far? 5%? 2%? 1%? Less than 1%?
These outlier patients do not constitute the majority of your patient base. Yes, you may have patients that come from afar, but that doesn’t mean that they should be a measure for how big your true catch basin is.
If you want to have a truly effective marketing and growth strategy, you need to understand your catch basin. Over the years, we at Points Group developed a methodology to divide a catch basin into areas that are most meaningful for the development of your marketing strategies. It is best to look at the catch basin in concentric circles around a practice/hospital location and divide it in four areas.
- Core: The core area of your catch basin should constitute approximately 50%+ of your patient base. This area is the immediate community that you are part of, where you have a number of deeply rooted relationships.
- Opportunity: The opportunity area should constitute maybe 20%-30% of your catch basin. This is where you have the opportunity for true expansion and growth. In this area you have to compete in the core catch basin of your competition, which means it is more difficult for you to draw in new patients and it becomes more expensive to convert patients.
- Extended: The extended catch basin might constitute 10%-15% of your patient base. This is still a significant enough portion of your patient base to deserve your attention. However, it is more difficult for you to compete in the extended area because other practices are more entrenched in these communities and you have to create effective marketing strategies that produce a ROI.
- Fringe: The fringe area includes the patients in all other areas and shouldn’t really be a major part of your marketing activities.
So what marketing strategies should you develop for the different areas of your catch basin? Simply put, it depends on many factors. Your practice is influenced by: community, your specialty, the demographics of your area, and proximity to your competition. However, there are a few best practices and strategic objectives that you should always implement for each area in your catch basin.
- Focus 30-50% of your marketing dollars in this area
- Have an intimate relationship with your community
- Be a “must know” practice/healthcare provider – you should be a household name
- Align yourself with your referral base and build strong referral patterns
- Identify businesses in your core and establish a relationship
- Focus 30-40% of your marketing dollars in this area
- Define long-term goals to establish relationships with other organizations
- Create a plan to increase your referral base
- Focus more on general marketing campaigns to reach a wide audience
- Spend only 5-10% of your marketing dollars in this area
- Be focused on marketing on high-value and differentiating services
- Try to find opportunities that don’t cost a lot but will increase your visibility
- Look for opportunities to establish another location in this area
- Don’t spend any significant money for marketing and growth related initiatives
In summary, it is important to understand your catch basin. A short cut to this ultimately results in wasteful spending of marketing dollars. This is a basic and fundamental building block of a rock-solid growth strategy and marketing plans.
If you have questions regarding catch basin analysis or are interested in doing one for your business, feel free to reach out to me at [email protected].