Campaign's ROI is Picture of HealthFranciscan Health System is using events in the personal lives of consumers as a trigger for a direct mail campaign that has earned the three-hospital chain $783 for every $1 spent on marketing.
The campaign exclusively targets women -- who research shows typically are the healthcare decision makers in most families -- and segments them according to age. Three age groups of 20-38, 40-64 and 65 and older were broken down for marketing purposes.
In the campaign, launched in 1999, consumers in the service area of Franciscan Health System, Tacoma, WA, receive direct mail in response to a significant event or date in their lives, such as the birth of a child. CPM Marketing Group, East Peoria, IL, designed the campaign and continues to run it.
The packages consist of an 8.5-inch-by-11-inch letter from a hospital executive with an attached tear-off reply card. Also enclosed is a postage-paid business-reply envelope.
Women in the youngest group receive a mailer 18 months after the birth of their first child and are offered a free health exam at a women's health center. CPM sends an average of 141 mailers per month to this segment.
Women in the second group receive a mailer during the month of their birthday and are offered information about mammograms and a free breast self-exam shower card. CPM sends an average of 1,046 mailers per month to this segment.
Members of the eldest group receive a mailer with an offer of a free nutrition guide and cookbook after they are treated and released from one of the hospital chain's emergency rooms. This group is sent an average of 477 mailers per month.
Consumers targeted in the campaign have gone on to spend nearly $30 million for services at a Franciscan hospital. The 65-and-older segment drew the most money, spending $19.8 million. The middle group spent more than $9 million, and the youngest group spent $725,000.
Direct marketing of healthcare presents challenges in that it is difficult to track consumer behavior and to offer upsells and cross-sells, said Budd Wagner, Franciscan's vice president of marketing and communication. However, direct marketing gives hospitals a clear way to define the success of their marketing efforts.
"This enables you to set some targets, execute and measure," Wagner said. "It adds a level of discipline to our business that is valuable."
Franciscan plans to continue direct mail efforts but in the future will experiment with segmenting its target audience even more deeply and introducing new triggers that could bring better focus to the campaign. Future campaigns will promote Franciscan's other major service lines, Wagner said.
Mark Clark, CPM creative director and team leader on the Franciscan project, said the campaign's success could be attributed to one of the company's earlier efforts, beginning in 1998, at building awareness through direct mail. Franciscan's 1998 direct mail campaign earned $26 for every $1 spent.
In this effort, the company sought to improve the image of St. Clare Hospital, the group's smallest hospital, which Franciscan felt had gained a reputation among local healthcare consumers as the poorer sister in the chain.
To change that image, Franciscan targeted 37,000 women in the Tacoma area for the campaign. During 1998, Franciscan dropped a series of four 6-inch-by-6-inch, three-panel, one-color self-mailers. Each was sent three months apart.
The first drop, sent to the entire list, gave general information about the hospital and bore the headline, "EXPERT care. CLOSE to home." The follow-up mails were aimed at promoting specific services offered by St. Clare and offered short stories from local people who had been treated successfully at the hospital. The second drop, also sent to the whole list, promoted the St. Clare sleep disorders lab.
The third mailer, promoting St. Clare's obstetrics services, was sent to 12,000 women on the list who were age 18 to 40. The last drop of 1998, promoting the St. Clare emergency services department, was sent to 28,000 women age 24 to 65.
Each mailer included an offer of a free health examination and, for the obstetrics and sleep-disorder mailers, offers of further information. The first mailer offered a $5 discount on a cholesterol check in addition to an examination.
The overall response rate for the 1998 campaign, measured according to consumers who accepted the free health exam, was 2.9 percent. Consumers targeted in the campaign who later went to St. Clare for services spent an average of $832. All but 1 percent of those who used St. Clare in response to the campaign were new patients, leading Franciscan to believe that it had achieved its goal of driving new business to the hospital.