Developing an Effective Marketing Plan for Uncertain Times

Developing an Effective

Marketing Plan for

Uncertain Times

Colette L. Meehan, M.B.A.

Senior Associate, OPEN MINDS

The 2011 Planning & Innovation Institute

June 17, 2011

OPEN MINDS © 2011. All Rights Reserved.

Agenda

The Fundamental Differences Between

Strategic Planning & Marketing Planning

The Structure of a Winning Marketing Plan

The Importance of Service Line Definition &

Metrics in Marketing Planning

2


The Fundamental Differences Between

Strategic Planning & Marketing Planning

3


What is Strategic Planning?

Plan to accomplish organizational mission and

objectives through specific tactics responding to a

changing environment while making best use of

available resources

Best practice strategic planning is framed in terms

of the overall organization‟s sustainability and is

market-focused

Strategic plan is basis for your organization‟s

marketing plan (as well as your financial plan and

operational plan)

4


Overall Strategy Development Process

5

Review/Establish Mission/Vision/Objectives 1

Gather External Information/External Analysis 2

Identify Options For Achieving Objectives - Strategies, Tactics, Markets & Services

4

Develop Marketing/Development Plan 5

Develop Operating/HR/IT Plan 6

Develop Budget/Financing Plan/Pro Forma 7

Develop Action Plan, Timetable & KPI 8

Gather Internal Information/Internal Analysis 3


OPEN MINDS Recommended Phased

Business Strategy Development Process

6

Strategy-Based Development

PHASE ONE

Modification of Business Unit Plans to Support Strategy Implementation

PHASE TWO

Development of Executive Team Performance Dashboard

PHASE THREE


Business Strategy Development Process:

Phase One

Confirm short-term and long-term organizational

objectives

Analyze external and internal factors that affect strategy

Identify likely environmental scenarios and related

strategic issues and priorities

Develop strategic priorities and related tactics

Develop a strategic action plan with a high-level

implementation plan

7

PHASE ONE Scenario-Based Strategy Development


Monitor market intelligence to update scenarios and action plans

Continuously update both the scenarios and the implementation plans based on new market intelligence

Determine the “common elements” in the scenario implementation plans

When building the operational implementation plan, implement the “common elements to all scenarios” first

Build scenarios of likely future situations and high-level implementation plans for each

Scenario-based Planning Process


Widespread Adoption of New Neurotech (Scans, Avatars, Cognitive Retraining, Etc.)

Medicaid or Medicare Coverage of Chronic Populations Moved To Managed Care or ACOs

Service Provider Organizations Moved To Case Rate Contracting or P4P

Decrease of Fee-For-Service Rates

Elimination of „Safety Net‟ Funding For Uninsured

Payers Increase Coverage of E-Health Services & Remote Monitoring

Increasing Proportion of Behavioral Health Expenditures Paid By Individuals

Expanding Role of Urgent Care Clinics in Community

Mandatory Adoption of EBP Via Comparative Effectiveness Research

Common Planning Scenarios for

Organizations in Behavioral Health Market

Space



Phase Two

Marketing and development plan

Technology and communication plan

Operations management plan

Human resource and talent management plans

Financial management plan

Organizational and program budgets

10

PHASE TWO Modification of Business Unit Plans to Support

Strategy Implementation



Phase Three

Determine critical performance outcomes for

success of strategy

Identify leading indicators and metrics that track

these performance outcomes

Develop key performance indicator metrics and

related specifications

Create an executive team performance dashboard

based on the strategy key performance indicators

11

PHASE THREE Development of Executive Team

Performance Dashboard


1. Overall organizational vision and mission –

which shapes market positioning

2. Markets to pursue

3. Service lines to offer

4. Revenue and return required for each

service line

Key Market-related Decisions Are Made

During the Strategic Planning Process


All the business activities involved in directing

the flow of services from the provider to the

customer

Understanding the needs of customers and

developing a service that meets those needs at

an acceptable cost

Act of promoting, selling, and distributing a

product or service

An aggregate of functions to move goods from

manufacturer to end user

What is Marketing?


What is a Marketing Plan?

Organizational strategy to guide revenue

generating activities

Tactical links between the organization, its

services and its customers

Must align to and build off of the strategies and

tactics in the strategic plan

Avoid common mistake of only associating

marketing with your traditional „promotional‟

activities

14


The Traditional „Marketing Mix‟ (4-Ps)

is Now the 6-Ps

Parameters that a marketer can control subject to

the internal and external constraints of the

marketing environment

The 6 Ps

Product (what to offer)

Price (rates and rate structure)

Place (sales distribution method)

Promotion (communication to customers)

Press (communication to press)

Political (political advocacy)

15


Application of „Product‟ to

Behavioral Health Service Providers

Behavioral health service providers can

control:

Service lines/services offered

• Clinical model

Functionality and features

Dimensions of quality services

16


Service Lines/Services Offered

Describes specific program offerings of

behavioral health service providers

Important that branding links to what you want

those programs to be „known for‟

17


Application of „Price‟ to



control:

Rate or fee

Rate structure (bundled, capitation, per unit,

programmatic, etc.)

Financial performance guarantees or pay-for-

performance elements

18


Application of „Place‟ to


“Place” in marketing mix refers to where the

sales activities take place

Direct-To-Consumer

Direct-To-Payer • Payer offices, via proposals or contracting

• Referral development – via case managers, judges

19


Application of „Promotion‟ to



control:

Advertising

Personal selling and sales efforts

• Sales calls, exhibiting, in-servicing, etc.

Website and social media presence

Public relations and publicity

Communications to consumers

20


Application of „Politics‟ to Service

Provider Organizations

Advocacy organization memberships

Lobbying activities – retained firm or

organizational

Political affiliations – organizational and

executive

Involvement and visibility with specific

politicians


Application of „Press‟ to Service

Provider Organizations

Press strategy – proactive and reactive

Press releases and press outreach

Interviews with media

Live coverage of events


Who Markets “Services”?

Healthcare markets services, who else?

Management consultants

Information technology

Architectural groups

Law firms

Educational organizations

Financial institutions

Insurance institutions

23


What is Marketing for the

Behavioral Health Service Provider?

All the business activities involved in directing

the flow of services from the provider to the

customer

Includes obtaining funding to enable services

Understanding the needs of customers and

developing a service that meets

those needs at an acceptable cost

24


Marketing Environment Participants –

The Four “C”s

Company/organization

Customers

Channels

Competitors

25


The Structure of a Winning Marketing Plan

26


Your marketing plan is

a strategic and tactical plan to

guide to your organization‟s

revenue generating activities

Its success or failure is

measured in the income

generated. . .


Marketing Planning Model

28


Revenue targets

Profitability of service lines related to

revenue and price

Market share

Marketing tactical plan

Marketing budget

#1. Market-related Goals & Objectives in the

Marketing Plan


#2. Incorporate & Address Organizational

Market Strengths & Weaknesses

Service lines

Customer base

Technological capabilities – clinical,

information systems, etc.


Buying behavior

Market size

Market trends

Consider value of PEST analysis

Legal considerations

Competitors‟ market position

Cost of sales and service

#3. Conduct Market Analysis


#4. Conduct Economic Analysis

Break-even levels and profit impact

Risk/gain assessment

Potential loss of existing customer base

Contingency factors

Potential gains

Analysis of competitor economic factors


#5. Strategy Formulation Process

Service offerings

Market selection

Price

Distribution channels

Promotion

Personal selling options (proposals, referral

generation, community outreach, etc.)


Eight Specific Elements in a Marketing

Plan

1. Provide background and state clear objectives

2. Identify and describe the specific services that

you are marketing

3. Define what success „looks like‟

4. Perform an analysis of market and customers

5. Perform a competitive analysis

6. Marketing strategy and tactics

7. Marketing budget

8. Implementation plan and timeline

34


#1: Provide Background & State Clear

Objectives


Summary descriptions of market and

organization‟s product lines

Statement of organizational revenue and

marketing objectives (from strategic plan and

in quantitative terms)

Provide Background & State Objectives


Net revenues in service X will be $X million in this

fiscal year

Service Y will be developed and have two customers

by the end of this year

Market research conducted on new service concept Z

and decision made whether to develop service within

the first 6 months of the year

Decrease % of total revenue from Medicaid from

93% to 88% by increased new service sales of X

services

Examples of Organizational Marketing

Objectives


#2: Identify & Describe The Specific

Services You Are Marketing


Describe the Service(s) You are

Marketing

Operational description

Target markets and customers

Pricing or payment structure

Cost data and operational parameters

Infrastructure


Service Description Example #1: Behavioral

Health Day Treatment Services for Returning

Vets

Program: Structured outpatient day program that

provides specialized treatment of PTSD and

substance abuse for veterans returning from

oversees war.

Payment Structure: Fee-for-service

Target Markets: VA hospitals and county clinics

Sales/Distribution: Direct mail to, proposals to and

meetings with military, VA hospital and county

government officials


Service Description Example #2: 24/7 Psychiatric

Evaluation Program for Juvenile Hall

Program: 24/7 emergency psychiatric evaluation

program serving detained youth who are suicidal

and /or homicidal in the county operated juvenile

hall. Licensed staff assessment of need for psych

consult or hospitalization.

Payment Structure: Per case fee

Target Markets: County governments

Sales/Distribution: Proposals to, and meetings

with county government officials


#3: Define What Success „Looks Like‟


Develop Metrics to Evaluate

Marketing Effectiveness

Determine what you want to measure

Select the appropriate metrics to use

Utilize performance-based metrics to measure

effectiveness and efficiency

Maximize the use of valuable metrics

In planning process

To track results over time

For recognition and evaluation


Choosing Your Metrics to Assess

Marketing Impact

Questions to ask when developing metrics

What will you measure?

When will you will measure it?

What does good „look like‟?

But the most important question you need to

be able to answer is…

Why are we measuring this?


Examples of Desired Results of

Marketing Activities

Increasing inpatient admissions from ABC

outpatient provider agency

Generating outpatient intakes from the local

community hospital

Receiving grant money from XYZ government

initiatives

It is important to consider that marketing applies

to more than building census in your programs


Example of Marketing Objectives

Objective #1: Establish the XXXX Schools and all residential treatment programs as profitable centers of excellence for the treatment of children and youth with special needs – establishing average daily census of 250 and average daily rate of $225 by 2013

Strategic Objective #2: Selectively expand profitable community-based programs to match market needs and changing demands. Increase community-based revenue by 100% -- from $16M to $32 M by 2013 with three tactics:

Aggressive marketing of current community-based services (50%)

Development of new community-based services (40%)

Acquisition (10%)

Strategic Objective #3: Increase and diversify XXXXXXXXXXXXXXXXX revenue streams overall. Expand Medicaid billing to 25% of total revenue and decrease state grant revenue to less than 50%.

46


#4: Perform An Analysis Of Market &

Customers


Macromarket analysis

For each service line,

Identify market segmentation, market size,

market potential and market share

Study customer buying behavior and

preferences

Perform an Analysis of Market &

Customers


Macromarket Analysis – Environmental

Trends & Variables

What trends are influencing the market at

this time?

Shifts in financing, service delivery structure,

legislation, or consumer movements


For each service line, identify:

Market segmentation

Market size

Market potential

Market share

Market Analysis


Market Segmentation

Division of market into segments according to some

rational scheme

Strategy of singling out certain subgroups and

developing a marketing strategy for them

Example by payer – County government, third-party

payer, private pay, education system, etc.

Example by consumer – Women, mature adult, child,

suburban, etc.

Example by service need – co-occurring, depression,

TBI, etc.


Market Potential & Market Share

Market potential: Sales for a service if it

were sold to all potential customers (what is

the $ size of the market if you had all

available customers?)

Market share: The percentage of the total

sales of a given type of product or service

category that are attributable to a particular

organization (what share of the total $ do

you have – and do your competitors have?)


Who are our customers and what do they

want?

Payers, referral sources, and consumers

Image assessment and positioning

Value and quality definitions

How much are customers willing to pay for

services?

Study Customer Buying Behavior &

Preferences


#5. Perform a Competitive Analysis, by

Service Line


Competitive Analysis, by Service Line

Competition:

Organizations that vie for the same resources or

offer a competing philosophy

Positioning:

Attempts to portray competitive services in terms

of customers‟ perceptions and preferences


Competitive Analysis, by Service Line

Identify competitors and their customers

Describe competitor‟s services and perceived

benefits relative to own product

Estimate competitor pricing

Estimate competitor market share

Future market strategies of each competitor


#6. Solidify Marketing Strategy &

Tactics


Marketing Strategy & Tactics

Initial marketing strategy elements

Market selection and service offering

Positioning against competition

Pricing

Distribution channels

Communication, advertising and promotion

Personal selling

From these strategies flow marketing tactics


Marketing Strategy Considerations

Around Market Selection

Revenue and margin generation

Resources required

Organization‟s broad goals and fit with market

opportunities

Demand for services

Possibility of gaining significant market share

Strengths and weaknesses relative to particular

market segments


Marketing Issue #1: Dependence of Organization on out-

of-state and state Medicaid for Profit Margin

Marketing Issue #2: Routinely Turning Down Referrals

Creates Opportunities for Competitors

Marketing Issue #3: Improve Profitability of New Jersey

Campus

Marketing Issue #4: State of Arizona Is Developing

'Alternatives' to Our Programming.

Marketing Issue #5: Growth of Therapeutic Foster Care Is

Dependent on Both Supply of Foster Parents & Ability to

'Replicate„ Program

Case Example: Children‟s Services

Provider - Marketing Issues

OPEN MINDS © 2011. All Rights Reserved. 61

Marketing Issue #1: Dependence of Organization on Out-of-

state and state Medicaid for Profit Margin

Strategy #1A: Develop 'one-stop-shop' approach for out-of-

state referral sources & Medicaid managed care referral sources

Strategy #1B: Research limitations around licensure for future

Medicaid referrals & develop strategy for full census

Strategy #1C: Confirm need to lower rates to better 'fit„ with

Medicaid managed care model & develop related programming

Strategy #1D: Explore 'alternative' populations for main

campus & develop appropriate marketing/sales strategies


Provider - Marketing Issue #1 Strategies


Strategy #1A: Develop 'One-Stop-Shop' Approach for Out-

of-State Referral Sources & Medicaid Managed Care

Referral Sources

Tactic #1: Develop a customer access system that

provides seamless, easy to use, customer friendly

experience for key customers through standardization of

access across the xxx service lines

Tactic #2: Develop real-time, web-based customer profile

database that supports sharing of information across

departments & locations


Provider Marketing Strategy Issue #1A-1

Tactics


Tactic #3: Assign a “super client services” person for each

priority account

Tactic #4: Develop "brand name" for this 'customer

access' program that effectively communicates the benefit

of this program to key customers

Tactic #5: Develop plan for addressing human resources

issues that will need to be addressed in implementing this

new customer interface

Tactic #6: Conduct Customer & competitor rate survey

for current services

Case Example: Children‟s Services Provider

Marketing Strategy Issue #1A-1 Tactics

(cont.)


Tactic #1A-1: Develop a Customer Access System That

Provides Seamless, Easy to Use, Customer Friendly

Experience for Key Customers Through Standardization of

Access Across XXX Service Lines

1. Establish a real-time, web-based tool to track referrals

for intake, UR/Discharge planning, & electronic transfer

of information from referral sources

2. Design how 'one stop shop' program will interface with

admissions, UR, contracting, customer service,

discharge planning, a/p, & other units

3. Develop proposed organizational structure modifications

& interface procedures for customer access plan


Providers-Marketing Tactics #1A-1


4. Standardized admissions/intake standards for every

program

5. Develop continuum-of-care referral & transfer criteria

for use within system

6. Evaluate feasibility of creating intake/assessment unit for

cases that fall outside of standard criteria

7. Develop appropriate organizational structure, reporting

relationships, & staffing for customer service program

8. Develop functional responsibility specifications for

customer access & related position descriptions

9. Develop KPI report for customer access center


Providers-Marketing Tactics #1A-1 (cont.)


10. Develop staff communication and training plan re:

customer access plan

11. Beta test of customer access plan with selected clients

12. Debrief on beta test

13. Complete development of web-based tool

14. Develop communication plan for customers re:

customer access system

15. Full launch of customer access center

16. Evaluate referral data from the customer access system

to plan referral relationships with provider partners


Providers-Marketing Tactics #1A-1 (cont.)


#7: Developing a Marketing Budget


Developing a Marketing Budget

The goal of the marketing budget is to project

revenue and marketing expenses level to achieve

those revenues

The budget establishes a standard of performance for

your actions and communicates those standards to

those implementing the strategy

The budget is a tool to keep everyone on target and

indicates when plan modification is needed

A common way to create a budget is to base

projections on last year‟s performance


Estimate Of Sales By Service &

Service Line

Year One: Monthly

Year Two: Quarterly

Sales Forecasting


Case Example: Sales Forecast

Revenue WorksheetJan Feb Mar Apr

Revenue Category

Product Line #1 $22,474 $22,016 $24,391 $23,191

Product Line #2 $7,180 $9,590 $11,180 $5,180

Product Line #3 $36,149 $36,149 $35,281 $19,184

Product Line #4 $174,471 $171,128 $308,779 $140,653

Total, Month $240,274 $238,883 $379,631 $188,207

Total, YTD $240,274 $479,157 $858,788 $1,046,995

Product Line #1

Product A $3,100 $6,200 $10,000 $8,200

Product B $2,798 $2,818 $2,832 $2,881

Product C $16,576 $12,998 $11,560 $12,110

Total Product Line #1

Revenue, Month $22,474 $22,016 $24,391 $23,191

Total Product Line #1 $22,474 $44,490 $68,881 $92,072

Product Line #2

Product D $6,000 $9,000 $10,000 $4,000

Product E $1,180 $590 $1,180 $1,180


Revenue, Month $7,180 $9,590 $11,180 $5,180


Product Line #3

Product F $20,649 $20,649 $20,649 $3,684

Product G $7,750 $7,750 $6,882 $7,750Product H $7,750 $7,750 $7,750 $7,750


Revenue, Month $36,149 $36,149 $35,281 $19,184


Product Line #4

Product I $119,471 $116,128 $253,779 $85,653

Product J $55,000 $55,000 $55,000 $55,000



Example: Revenue Projections For Next Fiscal Year, By

Service Line & Customer

Ann ualized FY 2003

Payer O/P /

Access Chem Dep FCS CSP

CM/PATH/ ACT VR

MD/Nurse - O/P Sec/Blg/DD BHC Inpatient Resident Admin Total

Self - pay 149,48 1 199,185 7,482 58,674 26,947 1,294 83,999 95 102,671 123,763 156,852 (1,066) 909,378

Medicare/Medicaid 334,702 44,280 144,887 195,344 (30,149) (937) 237,611 373 79,973 138,330 (11,562) 18,655 1,151,506

Managed Care/Insurance 241,46 6 28,510 37,199 (1,781) 9,292 (219) 63,101 0 132,975 45,737 2,604 0 558,884

MRO/MRO Match 26,341 59,324 357,093 1,155,503 776,522 46,833 92,614 269 131 10,222 990,671 4,689 3,520,211

Comm Living /Contract/Agency 24,455 15,603 31 8,578 1,247 627 147,155 9,122 3,013 4,346 3,532 518 2,315 530,511

Consult & Education 61,811 (2,829) (6,309) 429 (53,211) 0 46,697 (631) 18,120 0 0 0 64,077

Bad Debt (14,508) (19,775) (876) (5,572) (2,559) (123) (8,220) 0 (166,399) ( 12,325) (14,834) 30,807 (214,384)

DMHA/IFRP 397,143 607,724 437,804 1,089,906 823,901 98,637 350,873 0 0 150,004 1,492,823 272,936 5,721,750

County Prop Tax/Other Rev 34 2,309 0 0 10,919 171 (17) 0 369,843 0 32,341 730,410 1,146, 011

Interest/Contributions 0 0 2,500 1,061 184 0 0 0 0 0 0 153,801 157,547

Total Revenue 1,220,925 934,332 1,298,358 2,494,811 1,562,474 292,810 875,779 3,120 541,659 459,263 2,649,413 1,212,548 13,5 45,491

Total Direct Expenses 1,435,119 914,452 1,079,326 1,258,853 1,065,420 287,897 1,424,891 1,226,687 688,541 742,088 1,817,308 1,762,459 13,703,042

Total Allocated Expenses 400,420 255,146 301,148 351,239 297,268 80,328 397,566 (1,226,687) 192,113 207,054 507,056 (1,762,459) 190

Total Exp by Program 1,835,539 1,169,598 1,380,474 1,610,092 1,362,688 368,225 1,822,457 0 880,655 949,141 2,324,364 0 13,703,232

Net Inc(Loss) w/ Adm Alloc (614,614) (235,265) (82,116) 884,719 19 9,786 (75,415) (946,678) 3,120 (338,995) (489,879) 325,049 1,212,548 (157,741)


Estimated Marketing Expenditures To

Achieve The Sales Forecast

Start With Cost Of All Tactics In Plan

Year One: Monthly

Year Two: Quarterly

Creating a Marketing Budget


Executive responsible for marketing,

marketing planning, and management of

marketing tactics

Marketing assistant – administrative

responsibilities (sometimes some

communications assignments)

Marketing Staffing – How Many Staff

Do You Need?


Other functions and FTE levels depend on size

and tactical plans: Contract competition – RFPs and grants

Referral generation – B2B

Referral generation – B2C

External communications

New service line development

Fundraising and donations (non-profits only)

Marketing Staffing – How Many Staff

Do You Need? (cont.)


#8: Implementation Plan & Timeline


Developing a Clear Implementation Plan

& Timeline

76

Map out model customer ‘one stop shop’ access & identify information

needs of customer access center 2

Develop functional responsibility specifications for customer access &

related position descriptions 3

Develop clinical criteria for initial intake, for each program 4

Develop continuum-of-care & transfer criteria for use within the system 5

Develop proposed organizational structure modifications & interface

procedures for customer access plan – admissions, contracting, etc. 6

Develop interim & long-term plan for real-time capacity/scheduling

information 7

Develop KPI report for customer access center 8

Identify all current customers and customer point of contact 1


Developing a Clear Implementation Plan

& Timeline (cont.)

77

Develop staff communication and training plan re: customer access plan 10

Beta test of customer access plan with selected clients 11

Debrief on beta test 12

Complete development of web-based tool 13

Designing communication plan for customers re: customer access system 14

Full launch of customer access center 15

Develop plan for web-based tool to support customer access center

operations 9


Marketing Examples

78


Example #1: Children‟s Behavioral Health

Preauthorization & Case Management Program

Program: Prospective authorization and concurrent

case management of behavioral health services for

children, using Org X‟s best practice criteria and data

recording procedures. The program provides

standardization of cases, a database of encounter and

cost information and standardized reporting.

Payment structure: Per case fee

Target markets: County governments

Sales/distribution: Direct mail to, proposals to and

meetings with county government officials.



Risk-based Service Delivery Program

Program: Delivery of specified set of

behavioral health services for a specific group

of children for a fixed amount of dollars. The

program would offer Org X best practice

criteria, provider network, standardized

reporting, and a fee guarantee to the payer.

Payment structure: Per case fee, with or

without a risk corridor



Risk-based Service Delivery Program (cont.)

Target markets: County governments and

managed care organizations

Sales/distribution: Direct mail to, proposals to

and meetings with county government officials


The Importance of Service Line Definition

& Metrics in Marketing Planning

82


Service Line Analysis Helps Move an

Organization‟s Vision Forward

“Services” & “service lines” are „building blocks‟

of the strategic plan – variables in planning

process.

All services that are provided by an organization

– organized into groups using customer-focused

criteria.

How service lines are structured affects

organizational structure, conceptualization of

customers and management expectations.

83


Why is Understanding Service Line

Characteristics Important?

Detailed understanding of specific customer

group service needed for developing services,

pricing, promotion and sales strategies

Service lines are your business to which to apply

marketing concepts

Drive allocation of marketing development and

financing resources

84


Examples of Desired Results of

Behavioral Health Marketing Activities

Increasing inpatient admissions from ABC

outpatient provider agency

Generating outpatient intakes from the local

community hospital

Receiving grant money from XYZ government

initiatives

It is important to consider that marketing applies

to more than building census in your programs

85


Market Segmentation

Division of market into segments according to

some rational scheme

Strategy of singling out certain subgroups and

developing a marketing strategy for them

86


Estimated Market Potential & Market

Share, by Service Line

For each service line:

Identify target markets

Quantify current market

Estimate market potential

Estimate organization‟s market share

87


Market Potential & Market Share

Market Potential: Sales for a service if it were sold to

all potential customers

Market share: The percentage of the total sales of a

given type of product or service category that are

attributable to a given product, service, or company

88


Break-Even & Profitability Projections

Study relationships between fixed cost,

variable cost and profits

Breakeven point represents volume of sales at

which total costs equal total revenues (when

profits equal zero)

Examine the interrelationship of sales price,

sales volume, fixed costs, variable costs and

total costs

89


A Portfolio Analysis Assesses an

Organization‟s Mix of Services

A critical management issue is balancing the

number of services offered.

Services without financial return

• Maintain for community services reasons,

market positioning or legal mandate

Services that provide financial return to balance

the budget

Review of services is an on-going process revised

upon factors like risk and performance.

90


Portfolio Mapping Tools

A “bubble diagram” displays the relationships of

an organization‟s service lines along two

dimensions.

Example Profitability of a service line and its

relationship to organizational mission and

objectives

The Mission v. Profitability matrix is used by

non-profit organizations and behavioral health

and social service agencies.

91


2011 Mission v. Profitability Matrix for The Centers

Ser

vic

e‟s

Co

mp

ab

ioli

ty w

ith

h M

issi

on

Service‟s Ability to Cover Costs

Actively

Advances

Mission

Neutral

Negatively

Impact

Mission

Breakeven Highly

Profitable

No Attributable

Revenue

Maintain the status quo

(without allowing it to

dominate)

Or

Spin off as a for-profit

corporation

Phase out promptly

Selectively phase out

Or

Sell operation to external

buyers

Seek more donations

&/Or

Raise prices

&/Or

Improve cost effectiveness

&/Or

Selectively reduce scope of

operations


Mission v. Profitability Matrix

High Mission Compatibility/High Profit are

your winning service lines.

Important to maintain their profitability

High Mission Compatibility/Low Profit are the

bane of all organizations.

Key to organizational mission-yet they lose

money

93


Mission v. Profitability Matrix (cont.)

Low Mission Compatibility/High Profit do not

occur often.

Profitable service lines that detract from your

mission

If possible, phase out or sell these service lines

Low Mission Compatibility/Low Profit lose

money and negatively impact your mission.

94


Service Line Metrics

Metrics that measure specific aspects of a

service line‟s activities or performance Census data

Cost data

Pricing data

Sales history and historical pricing, by customer

type

95


Marketing ROI Metrics

Metrics that measure specific aspects of

specific marketing activities or performance

Number of advertisements, in-services, grant

requests, letters mailed to donors/potential

donors, exhibits, etc.

Performance within service line relative to

marketing activities

96


Questions & Discussion

97


Upcoming OPEN MINDS Educational Events

The 2011 OPEN MINDS Planning & Innovation Institute: Managing for the Future Through Strategic Planning & Marketing, June 15-17, 2011, Baltimore, MD www.openminds.com/pii

The 2011 OPEN MINDS Executive Leadership Institute: Discover the Lessons of Great Leaders in Times of Crisis, October 5-7, 2011, Gettysburg, PA www.openminds.com/eli

The 2011 OPEN MINDS Institute for Behavioral Health Informatics: The 7th Annual Conference on the Future of Technology in Behavioral Health, October 19-21, 2011, Baltimore, MD www.openminds.com/ibhi

The 2012 OPEN MINDS Best Management Practices Institute: Finance and Technology to Maximize Performance, February 16-17, 2012, Clearwater Beach, FL www.openminds.com/bmpi

http://www.openminds.com/pii

http://www.openminds.com/eli

http://www.openminds.com/ibhi

http://www.openminds.com/bmpi


References

Developing a Winning Marketing Plan: A Tried-And-True

Process for Behavioral Health & Social Service Executives

http://www.openminds.com/circlehome/eprint/2008/110108/110

108f.htm

What‟s Wrong With This Marketing Plan? http://www.openminds.com/circlehome/eprint/2008/070108/070

108omnd.pdf

Strategic Planning: A Structured Approach to Deploying

Resources to Achieve Your Organizational Objectives

http://www.openminds.com/circlehome/indres/120309mann.pdf

http://www.openminds.com/circlehome/eprint/2008/110108/110108f.htm

http://www.openminds.com/circlehome/eprint/2008/110108/110108f.htm

http://www.openminds.com/circlehome/eprint/2008/070108/070108omnd.pdf

http://www.openminds.com/circlehome/eprint/2008/070108/070108omnd.pdf

http://www.openminds.com/circlehome/indres/120309mann.pdf

Bringing the Management of

Behavioral Health & Social

Services into Focus

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Developing an Effective Marketing Plan for Uncertain Times

Documents

Transcript of Developing an Effective Marketing Plan for Uncertain Times