Founders and growth teams tend to agree that performance marketing for healthcare is a great growth hack that’ll fix any onboarding of new patients.
In fact, I bet we all dream of discovering healthcare marketing growth hacks that will go down in history as incredible as those we read about in other industries, like Airbnb’s play on Craigslist, but we rarely if ever see any examples from our industry.
If the number of startups is anything to go by, the healthcare industry (here combined with life sciences) is among the most popular tech startup industries.
The American market tends to build the most tech startups and if Crunchbase’s recent overview of Series B funding over there is anything to go by, the healthcare industry is surprisingly popular. I think it’s a reasonably good estimate to go by since there isn’t much to growth hack in the early stages until product-market fit is dialed in.
Lots of investments have been made and we have to assume that there would be enough healthcare startups to discover meaningful industry growth hacks just like in other industries, so where are they?
Is it impossible to growth hack such a traditional and highly regulated industry, do people not want to share their tricks or has our industry simply not been disrupted yet?
Marketing for healthcare is like selling illegal drugs
One of the interesting things about healthcare is that, like illegal drugs, marketing is sort of built into the idea from the start.
Contrary to many other products that we have to educate the consumer about, we don’t need to do that with healthcare. The need for a physician when our arm is coming out of its socket is obvious and not a discussion to most people. Rather the question is whether to visit our clinic, a competitor’s or none at all. Meaning that marketing doesn’t play the same role as it does in other industries and instead, a portion of the energy might be worth spending on logistics and managing regulations while disrupting the traditional with new tech.
That makes it a lot more challenging to build growth hacks based on marketing like the classic examples we’ve seen in the first wave of tech startups, and because the regulations around promotions and marketing are highly controlled we tend to benefit from growth hacking in other areas of the business.
Instead of looking at which target customers could benefit from our services, we’ll look at which use cases already exist that we can latch onto and disrupt with tech like businesses requiring certain healthcare services by law, such as insurance, or elderly who have trouble getting to a traditional clinic and might need services at home.
During the first couple of years working with marketing for healthcare, I was lucky enough to get to experiment with many different marketing channels for a wealth of B2C services, so I want to explore how each of the popular channels tend to be used before we dive into growth hacks and an exciting alternative approach to marketing in our industry.
The fall of best practices
There are a million channels out there and instead of diving into every single one, we’ll look at the six most popular ones.
Performance marketing
At VC-backed tech startups, digital performance marketing tends to be popular as the results are highly trackable–but is it really that good a part of healthcare marketing?
At the very early stages and on a small scale it tends to be a powerful way to acquire patients as we can find “pockets” that are affordable and convert well but don’t scale.
The last resort tends to be brute-forcing patient acquisition with budget but rather than a tipping point that you might experience in other industries, there is a decent chance it may simply end up in diminishing returns as people don’t care about most healthcare projects until they are sick.
We can partly solve it and scale by targeting lower intent and building a longer sales funnel. This tends to make the biggest impact early on in the business lifecycle but as the business grows its impact will be less and less meaningful as there will be bigger revenue drivers.
Branding
Branding tends to be popular and feel good but doesn’t appear to make a major difference until the business is ready to absorb returns slowly in the coming years or decade, and you likely won’t be able to track the results easily, meaning you’ll be empty-handed when showing it to investors.
Direct sales
This is the sexiest channel beyond performance marketing as it brings in direct revenue and is trackable but it can be challenging to find an obvious B2C use case as it can feel a bit odd to push direct sales to consumers with a topic as sensitive as healthcare, let alone finding patients when they are sick and care about seeing a doctor.
The only person that can really sell a consultation properly is a doctor and that’s where telemedicine can be a good option. Direct sales appear to be the most effective for healthcare startups when they can be paired with a B2B path that can then trickle into a B2C solution.
The reason I’m adding this under marketing for healthcare is that in practice it doesn’t necessarily have to be used in the same way a traditional sales team might be in other industries.
Partnerships
Partnerships have the potential to be the holy grail as with the relationships we can get access to consumers and sales that are not directly available to competitors but it’s not as easy to test out compared to a self-serve ad platform on Google, for example.
The challenge is that it’s unproven and people tend to prefer to be risk-averse and stick to best practices even though the results of those channels get worse by the day as they become more popular.
Offline (OOH) billboards, TV, events, etc.
The traditional channels tend to be too expensive for most startups that aren’t late stage and may even be counted as branding due to the lack of trackable results. Healthcare is one of the few industries where they still seem to have a foothold because building trust with consumers is everything since once we are comfortable with the physicians, we are unlikely to change to a different one.
Just like building real-world facilities tends to have a stronger impact on consumers in our industry than it does in many others.
Referrals
Referrals are an interesting area where virality and public referrals barely exist since many patients don’t feel ready to share their public health with everyone (some markets are different though). But behind closed doors with friends and family, referrals carry weight and some clinics even default to assume that for every new patient coming through the doors, another few will come through referrals sooner or later.
The challenge is that we can’t simply run a give-get referral program as it only becomes important to the person being referred when they get sick or have a problem. Until then, they don’t care and it becomes challenging to track those referrals as it can be months or years before they are activated.
The problem with following best practices and being risk-averse is that it’s impossible to discover life-changing growth hacks without trying stuff that might fail. Maybe through misunderstanding of the results sometimes claimed online, especially with performance marketing, we might assume that we can follow best practices and extraordinary results.
Why you haven’t found any healthcare marketing growth hacks
To achieve extraordinary growth through hacks and loopholes, there’s no way around experimenting with ideas that may just fail. I’ve found that while they might not fail they can often work for a different reason than we had initially thought, like running a campaign attracting individuals instead of the intended corporate customers.
The reality of growth hacks is that they come and go, and often don’t last long before the open exploit we took advantage of is closed. They are short lived and we need to come up with new creative ideas regularly.
Growth hacks are sexy as hell but not a serious bet to long term growth compared to big impactful projects that can change the game for the business like network effects (more on that in a minute) or building a growth engine that consistently experiments with new ideas based on a portfolio strategy used by VCs to invest in tech startups.
If you can’t seem to build any impactful growth hacks, it might be because you’re
- Too focused on “safe bets” like performance marketing and outdated best practices
- Too focused on what the investors want (and they tend to want what’s safe and proven — “stick to one core area”, “get lots of users” and “don’t hold inventory/labor, build a multi-sided platform instead–less overhead is less risky!”)
- You are looking for growth hacks all the time with the purpose of finding hacks instead of fixing the long-term challenges (they come through serendipity and diving deep in solving problems not by us looking for them or trying to force-brainstorm them on a whiteboard)
There is no prescription or recipe for growth hacks, that’s what makes them unique. As soon as a growth hack is well-known it becomes a best practice. Instead, let’s look at an alternative to growth hacks and marketing for healthcare.
An alternative to marketing for healthcare: Network effects
Andrew Chen’s new book discusses network effects which for Facebook or Tinder might be their users as the more that join, the more benefits the other users and the platform itself has. In healthcare, network effects could be the number of physicians on your telemedicine platform if that allows patients to book and see a doctor faster.
If it’s a multi-sided network that could be patients on the other side too since that attracts more doctors to join.
Another way to use it in healthcare is to own the one side of the network first (e.g. physicians) to side-step the cold start problem, and then turn it into a two-sided platform later–similar to how Mcdonald’s started on their own and then turned to the franchise model.
That way, we’ll better understand the problem that side will face in the future which will help us better onboard them when we are looking for third-party individuals to join the platform, and we’ll likely faster get traction with the other side as they’ll find it more attractive. For example, imagine being a patient logging on to a platform where we can find a doctor to come to our house but the next available time slot is in four weeks because there are only a few doctors available. Not a good experience that makes us want to come back.
The major benefit of network effects comes down the line as defensibility for matured startups because it will take a lot of energy for a competitor to build out the same network.
Takeaways
- Doing performance marketing well is no longer an edge and is considered an important but standard part of healthcare marketing
- Best practices in marketing for healthcare startups is the lowest level of marketing effort, growth hacks tend to be a step up and long term gains like network effects tend to drive a meaningful impact over years and has the potential to totally change a business’ growth trajectory
- If you are struggling to build impact growth hacks, you might be trying to hard as they can’t be forced