April 5, 2017: With the exception of local medical journals available in a handful of markets, there are only two cost-effective ways to advertise directly to doctors: Facebook and direct mail. Here, we quickly review the strengths and weaknesses of each, so you can better manage your marketing mix. For an established home health agency or physical therapy practice, direct mail will be more likely to produce a larger return on investment than Facebook. For community-based and outpatient healthcare providers that have not yet developed a physician-referral base, the math flips and Facebook becomes the winner in a head-to-head comparison. However, the more important message for established home health and physical therapy providers is that physician referrals are so important and profitable that every means available for cost-effective communication with doctors should be used.
Brazzell Marketing Agency can program the Facebook ad platform so that a campaign delivers paid ads only to discharge planners, the right types of doctors, and their staff. The ads appear on Facebook, Instagram, and multiple partner apps. For as little as $144.50 per month (all inclusive), referral sources see your ads about 7,500 times per month. That's a cost per impression of less than two cents! Therein lies Facebook's largest advantage in referral source marketing, the extremely low cost per impression. There is no more cost-effective way for a local provider to put messages in front of doctors.
It costs about one dollar to print a nice letter and mail it, including labor but excluding development costs. In other words, excluding development costs, direct mail costs about one dollar per impression (50x more than Facebook). The advantage of direct mail, however, is that home health agencies and physical therapy practices can specifically mail to their active referral sources. For many agencies, mailing to active referral sources causes those doctors and discharge planners to increase their monthly referral volume after only three mailings (when done correctly). The quick increase from loyal referral sources holds true even for the agency's own medical director and for referral sources who have flatly told you they send you all their home health referrals. The fast gains from active referral sources help finance the more expensive task of cultivating cold referral sources. Even though cold referral sources require 6 to 12 marketing impressions before their referral behavior begins to be influenced, and even though only a small percentage of doctors and discharge planners will change referral behavior due to your direct mail, the math still works. Since you are already paying for the development of your physician-marketing piece, each cold referral source you add to your monthly mail list only costs $12 per year. At that rate, the doctor could make one Medicare referral every 10 years, and you would still see a 480% return on investment. Facebook, on the other hand, lets us target ads by profession but not by individual. Thirty to forty percent of the population is not on Facebook. Therefore, Facebook cannot cover active referral sources as thoroughly as direct mail, and Facebook will miss 40% or more of your opportunity to increase referrals quickly through your active referral base. Facebook Referral Source Marketing does produce return on investment and increase top-of-mind awareness among referral sources, but it's a secondary strategy for established healthcare providers.
The reasoning and math goes to an opposite conclusion for most new healthcare providers and providers who are not already receiving referrals from doctors. Direct mail requires six to twelve impressions before beginning to modify the behavior of a cold referral source, and only a small percentage will respond to your direct mail at all. Ideally, when using direct mail to warm up cold referral sources, the mail list will consist of one hundred to three hundred names. That means a new home health agency with no active referral sources would need to spend $300 to $600 on direct mail (plus development costs of $567 to $3,600) before seeing the first referral generated by the effort. An effective effort would likely be on the higher end of that price range – in the neighborhood of $4,788. Most new agencies are not in the position to budget $4,788 on an effort that will take six months to a year to start producing its return. A new agency may be able to justify this cost as an effort to support the work of a new community liaison who is selling to the exact same list or for other reasons, but as a stand-alone effort, monthly mailers to doctors may not be the best choice for new agencies. For new agencies, Facebook does not have the disadvantage of not being able to target 100% of active referral sources, because active referral sources are few to none. Therefore, for new agencies and physical therapy practices Facebook Referral Source Marketing is the preferred way to advertise to doctors until the agency/practice grows to around six medical referrals per month.
- All Medicare-certified home health agencies and outpatient physical therapy practices should be using Facebook Referral Source Marketing. [Order Now]
- All Medicare-certified and outpatient physical therapy should be using direct mail to advertise to doctors IF they are established past the minimum threshold of receiving six or more referrals per month with more than four doctors having signed those orders. This will likely be the single most cost-effective marketing strategy in your marketing mix. [Download the PDF order form] [Learn more] [Learn the strategy if you want to do all the work yourself]