I’m a firm believer in the “80/20 Rule” and I’ve found that you can apply the rule to many things, including the marketing of your practice in 2019. Historically, the 80/20 Rule is actually called the Pareto Principle and comes from an economic study that was done by an Italian economist, Wilfredo Pareto who learned over 100 years ago that 80% of the wealth was owned by 20% of the population. This came to be known as the Pareto Principle. Most people today refer to it simply as the 80/20 Rule.
Here’s an example of the 80/20 Rule in healthcare – in most markets that I’ve worked in, 80% of the market share is usually controlled by the top 20% of practices. These successful practices are the premier, “go-to” practices that everyone talks about. The remaining market share is controlled by the other 80% of practices. These are the practices that are often times struggling because they are competing for the remaining, smaller 20% of the market share pie. So, ask yourself this, “Where does my practice fall? Am I among the elite 20% that is getting the lion’s share of the market or am I among the bottom feeders that are struggling to compete with the “go-to” practices?”
Whether you’re among the elite and trying to strengthen you practice or you’re towards the bottom and vying for more market share, your practice can benefit from the 80/20 Rule. Using Pareto’s Principle will focus your marketing and drive you to become more efficient. Here’s an example: Typical practices should be spending 80% of their marketing budget using the marketing methods that gain the greatest return on investment.
How do you determine which marketing methods work best in your area? You have to base your decision on the track record of each method. In some markets, Google advertising & Facebook works more cost-effectively than local radio ads, in others, vice versa. Among broadcast media, television can work better than radio in some regional markets but not others. The only way you’ll know what works best for you and your specific practice is to know which methods work best for your subspecialty, test a campaign, and track the results. Note that traditional advertising media are on the way out (local newspaper & letter box drops) while Google is where it is at unless you are located in more of a remote regional town. The majority of your budget should go towards what works. The remaining 20% of your marketing budget should be used to consistently test various media to determine ongoing cost effectiveness of other media. Even if it’s not among the media that historically work best, knowing what works for your unique practice in your unique market is the goal.
The 80/20 Rule also applies to referral marketing. Typically, 80% of a practice’s referrals come from the top 20% of their sources. I consider these your “A” referral sources, using my ABC priority ranking method. The rest of the referrals typically come from the remaining 80% of practices. These are your “B”s and “C”s. Your Practice Manager should be focusing the majority of their efforts on the “A” sources. These efforts should focus on maintaining those referral sources and even expanding and increasing those referral sources by marketing to other people within that practice, such as key staff members that influence the patient and other doctors within that practice that may not be referring you all of their patients.