How do you spend your marketing budget?

How much does your hospital, clinic or medical tourism agency invest in marketing your services to the international patient? And how do you spend your budget?

How much does your hospital, clinic or medical tourism agency invest in marketing your services to the international patient? And how do you spend your budget?

As a healthcare marketer by trade, I continue to be disappointed at the poor quality of marketing in the medical tourism sector. The problem demonstrates itself in the following areas:

  • Lack of strategy, the wrong strategy or no strategy at all.
  • The belief that growing your medical tourism business is about attending conferences, congresses and exhibitions.
  • The appalling quality of marketing communication whether this be online, or offline in print advertising and literature.

In the 2014 IMTJ Medical Tourism Climate Survey, the respondents identified the biggest areas of spend as these:

  • Web site content
  • Social media
  • Exhibitions and events

44% of those responding to a question about annual marketing spend said they spent less than $10,000 per annum; only one in five spend over $50,000 each year. How does your hospital, clinic or medical tourism agency compare?


Let’s assume you have some idea of your strategy and objectives. For the purposes of this example, we will take an IVF clinic that wants to grow its international business. But is that a strategic objective?… Or just hope or ambition. Strategic objectives need to be Specific, Measurable, Attainable, Relevant and Timely. In this example, a SMART objective for an IVF clinic might be:

To grow the number of international patients that we attract from the UK for egg donation by 50% (from a base figure of 80 in 2013) in the calendar year 2014 at an average revenue per patient of €3,500.

So… we now have a SMART objective.

The four P’s of marketing in medical tourism

As a starting point, the clinic obviously needs to get the first three of the four Marketing P’s (Product, Place, Price, Promotion) right. The Product has to match the needs and expectations of the international patient. Bear in mind, that these may well differ from one source market to another. In this example, the clinic needs to meet the specific needs of the UK patient seeking egg donation. If the Product isn’t right, then whatever the clinic spends on Promotion, it is unlikely to deliver a long term return. In medical tourism, the Product (or Service) embraces everything that is part of the patient journey. It’s not just about the patient experience when they arrive at the clinic for treatment. It’s not just about the specialist who provides the treatment. It embraces every “touch point”, both physical and emotional, that reflects your brand.
What does Place mean in medical tourism? Well, this embraces a multitude of factors. In the narrowest sense, Place may be about the physical environment of your clinic. Where it is located, how it looks, the ambience of the clinic. But Place is reflected by other destination specific aspects of the medical tourism journey. The accommodation provided, the local geography, the tourist attractions available and so on. And if you’re offering consultations in the source country, then consideration of Place applies to that location as well. If your overseas “consulting room” is the Place where the customer makes the decision, then it’s vital that you get it right.
Now, let’s consider Price. In medical tourism, low cost is the clarion call of most hospitals and clinics. But low cost implies low quality. So, why try to be the cheapest? If what you are delivering is great Value, then the Price is a small part of the equation. You also need to decide what your pricing strategy and how you construct your Price.

Promotion: Let’s do the Maths

Our IVF clinic gets to work on its marketing plan. It’s confident that it is selling the right Product in the right Place and at the right Price. The next challenge is to sort out Promotion:

  • How will you get your message across to potential customers?
  • What should that message be?
  • How will it reflect your brand?
  • What media will you use?
  • How much will you spend?
  • What will be the mix of advertising, offline and online, PR, sales promotion, mailing, and personal selling?

The promotional strategy must be specific to the target market and customer segments. This is where many medical tourism businesses fail… adopting a “one size fits all” approach that fails to deliver in the target market. The destination that invests heavily in international exhibitions may see little return if the buyers, commissioners or indeed the consumers of medical travel services for their target markets are not in attendance. Many events promote their “buyer meets seller” or “hosted buyer” programmes to entice hospitals and clinics to attend. But how well do the attending “sellers” assess the effectiveness of this investment.
Back to our IVF Clinic wanting to attract patients for egg donation from the UK… What promotional approach might work for them? Will attending international events bring patients? Can social media deliver a return? Which media might reach the infertile couple? Should they be trying to influence referring clinicians in the UK? If they decide to advertise, should it be online or offline? And in which web sites and publications?
When it comes to promotional investment, then, as we have seen from the data in the 2014 IMTJ Medical Tourism Climate Survey promotional budgets in medical tourism are fairly unambitious. How should our IVF clinic spend? Let’s do some Maths.
The clinic wants to grow its UK sourced business by 50% from a base figure of 80 in 2013. We know that the average revenue per patient is €3,500. So, the aim is to generate an additional €140,000 of revenue from the UK market. Of course, it’s important to know what the margin is on these patients. The margin may be lower given the additional costs that can be incurred in treating international patients.
One approach to setting the promotional budget is the marketing budget ratio (MBR) or the Advertising Sales Ratio… in essence – how much you spend on marketing/advertising investment divided by your total revenue/sales. A rule of thumb that is sometimes suggested is 8-10% of projected sales. So, in this instance, the rule suggests that the IVF clinic should be spending around €12,000 to €14,000 in the next calendar year.
Is this the kind of budget that the clinic should be allocating to its promotional activity on this one specific market? Should it be more… or less? What would you spend, and how would you spend it?

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Keith Pollard
As Editor in Chief of International Medical Travel Journal (IMTJ) and a Healthcare Consultant for LaingBuisson, Keith Pollard is one of Europe’s leading experts on private healthcare, medical tourism and cross border healthcare, providing consultancy and research services, and attending and contributing to major conferences across the world on the subject. He has been involved in private healthcare, medical travel and cross border healthcare since the 1990s. His career has embraced the management of private hospitals in the UK, research and feasibility studies for healthcare ventures, the marketing and business development aspects of healthcare and medical travel and publishing, research and consultancy on cross border healthcare.