the value of first-party data in communicating with patients
first-party data unlocks effective patient communication and influences consumer behavior to create better patient and health system outcomes
This continues our series on how health systems need to understand and mobilize their data.
For decades, health system marketing, business development, and executive leaders have relied heavily on third-party datasets to target potential consumers and market services to them. In recent years, advances in marketing automation technology have further facilitated the use of third-party data under the guise of providing better, more sophisticated targeting, with technology that is easy to use and integrated with first and second-party data via data warehouses, data lakes, and more recently, CDPs. Yet, as consumers become savvier and more privacy-aware, as regulators place increased limits on how consumer data is acquired and used, and as big tech shifts its focus away from facilitating third-party data collection, marketers are finding that placing third-party data at the center of their marketing strategies is increasingly risky and costly.
While the shift in data collection practices will undoubtedly cause many health systems to recalibrate their marketing strategies, there is reason to celebrate these changes. Health systems are increasingly being asked to re-evaluate (or in some instances, evaluate for the first time) how they’re collecting data from existing patients and how they use it to digitally communicate with those patients. As a result, health systems have the opportunity to focus intently on understanding and leveraging first-party and earned data to more effectively communicate with their patient populations and influence consumer behavior in ways that lead to better patient and health system outcomes.
Underestimating the Value of First-Party Data
Enterprise retailers learned long ago how important it is to create lasting relationships with customers. Top tier brands fiercely covet strong customer relationships and protect them with tenacity for good reason — retention marketing programs are by and large more effective and far less costly than customer acquisition programs at maximizing customer lifetime value (LTV). The same is true for health systems. The old adage that it costs 5x more to acquire new customers than it does to retain existing ones is still true according to Adrienne Boissey, Chief Customer Experience Officer at the Cleveland Clinic, who says it costs 7x more to bring a lapsed patient back into their health system versus retaining and building upon existing patient relationships. And email, ever the bridesmaid never the bride, continues to be one of the most effective digital channels for creating loyal consumer bases. It’s cheap, it’s effective, and it’s significantly underutilized by most health systems. In other words, if you’re a CMO talking about maximizing LTV without a rigorous retention marketing strategy based in email, it is the equivalent of running a marathon without a nutrition plan — you simply aren’t going to run your best time, if you make it to the finish line at all.
A rigorous understanding of first-party data forms the foundation of retention marketing programs. Enterprise retail operations have sophisticated understandings of who their most loyal customers are, how they’re likely to enter the customer experience, where they’re most likely to lapse, the channels they’re most likely to engage with, and how much revenue they expect to generate from purchasing segments. In a health system context, this framework must be applied differently, but with no less rigor. Understanding where patients are likely to lapse, where opportunities exist to influence their behavior towards better and more consistent care outcomes, and yes, how much revenue can be expected to be generated over the course of the patient lifecycle all must be calculated and measured to truly understand how patients are (or aren’t) engaging with points of care across the health system, and how to tailor digital communications appropriately to influence that behavior.
And yet, too many health care providers significantly undervalue their first-party data and the insight that it can bring to marketing and communications teams. The reasons for the undervaluation are varied:
- There are technical or personnel barriers to integrating first-party data with marketing automation platforms
- There’s a hesitancy to ethically and securely use first-party data to draw insights about patient populations and tailor communications accordingly
- There are misaligned incentive structures for health care executives that place too much focus on growth
- There’s a general unfamiliarity with first-party EMR data structures by marketing departments and how to effectively, securely, and ethically use them
- There are interdepartmental silos between IT and Marketing
- There’s a lack of marketing automation technology expertise more generally
- There’s an unwillingness to invest in upfront costs of creating necessary integrations
The list of explanations is very long and the rationale can vary depending on who you speak to within individual health systems. It can be exhausting.
Overcoming any one of these barriers is difficult for (often) small digital marketing teams (if they’re digital-focused at all), and overcoming more than one of these barriers can seem overwhelming to even the most experienced marketers. It’s important that they do.
The value of first-party data isn’t primarily in creating highly personalized communications in the traditional retail sense — don’t get me wrong, personalizing your newsletter articles to the individual reading it is certainly of some value. Sending a new clinic opening announcement to patients in a particular geography is certainly justifiable. And creating relevant, timely communications tailored to your consumers’ individual preferences should guide content strategy for any consumer communication, regardless of channel.
The primary value of first-party data is in recognizing overlapping gaps in revenue and care and leveraging digital marketing tools to edge patient behavior towards more efficient consumption and better care. It’s in truly understanding the value of a primary care relationship to your health system — over $100 million in missed revenue opportunities per year in the case of one health system, not to mention better outcomes when a well-established PCP exists — and using marketing automation technologies to foster a continuous consumer relationship that makes care consumption natural, easy, and dare I say, delightful. It’s about understanding who in your health system is most likely to become a lapsed patient and doing everything in your power to ensure that they don’t. It’s about facilitating referrals. It’s about making sure that a high-risk individual gets a cardiology consultation. It’s about ensuring that women who’ve received mammographies attend their follow-up screenings. It’s about influencing patient behavior at the most basic levels using words and pictures, sent to your patients via the appropriate channel at the time that they are most receptive to it. It’s about picking low-hanging fruit.
And sadly, many health system marketers who focus their ad spend on growth initiatives using third-party datasets are largely doing so at the expense of pursuing opportunities that have been sitting right under their noses — opportunities related to improving and growing relationships with existing patients. Consumers expect proactive communications about how and when to engage with their health systems via digital channels that they choose. Yet, the failure to holistically communicate with patients is an active choice that far too many health systems make day-in and day-out. The technology to communicate is widely available — what’s missing is the willingness to consistently engage with patients through a rigorous understanding of first-party data.
Finally, it’s important that health systems leverage their first-party data in effective ways for the same reasons they’ve pursued the latest and great MarTech for pursuing growth marketing opportunities — it’s imperative to grow your base of consumers, particularly with Generation X and Millennial consumers. Mark Shipley, co-founder of healthcare marketing agency Smith & Jones, writes in Under the Influence: The Anthology of Healthcare Marketing Best Practices that, unlike their Baby Boomer and Silent Generation counterparts, Millennials and Gen Xers primarily prioritize patient experience and health system reputation when choosing health care providers. He writes, “Communicating the patient experience, and aligning internal staff and physicians to deliver positive experiences is essential to engage Millennial consumers. This generation values prior experiences and often consults online information, review sites and social networks when making care decisions.” The most competitive health systems are focusing, rightly, on patient experience and creating loyal patients who become advocates for health systems. In other words, your most loyal patients are your most effective growth marketers. The happier your patients are, the more engaged they are in your health system, the more likely they are to recommend that care to others and the better reputation your health system will have. Everybody wins.
Giving Your First-Party Data A Boost with Cured
Data collection is a challenge for many health systems. At first, it may seem easy to capture a patient’s email and contact information and be on your merry way with any number of digital marketing channels to achieve communications and marketing objectives. However, the reality of efficiently managing, storing, and mobilizing your data can be quite daunting. At Cured, we’ve developed prescriptive data schemas to help health systems collect the data that they need (and only the data they need) and ensure that only the right and necessary data is integrated into our solutions. It isn’t necessary to include every clinical and encounter-related data point about each consumer in order to develop a robust, first-party data-driven communications and marketing strategy. Instead, we work with your health system to isolate key demographics and encounter data to understand how the customer has been consuming your services. Similar to a retailer, this information tells a story about how your consumers evaluate, purchase and retain your services over their lifetime. Taking this prescriptive approach to first-party data allows you to precisely target your communications and send the right message to the right person at the right time. We don’t need everything, but what we do need, we care a whole lot about.
To take it a step further, we deploy machine learning models to better understand your first-party data, which in itself is nothing new. However, those models do more than just spit out scores or distributions, rather, the outputs are contextualized and applied to the health system setting (something that Cured is pioneering). In sum, this allows you to not only gain significant insights into your consumers’ behaviors but also predicts how they will respond to your future communications and allow you to message those who are the most likely to the action you desire; without you having to take any extra steps to get there. Newer and more powerful models will aid health systems in fully realizing the power of their first-party data for both clinical and marketing purposes, helping health care providers to understand who is most likely to need care and ensure that patients are getting the right care at exactly the right time. This is a win for both health system marketers and patients — for instance, if health care providers know that certain populations of patients are likely in need of a cardiology screening but simply haven’t been asked by the health system to do so, health system marketers can proactively communicate with individuals to undergo screening that may detect and prevent far more devastating and chronic conditions from developing.
Health marketers focusing on broad-based growth marketing strategies that rely on third-party datasets are missing significant opportunities to maximize patient LTV, reduce marketing costs and increase patient engagement. Increasingly, MarTech stacks needed to support third-party data collection and attribution are costly and difficult to maintain, and as health systems fall under increasing pressure to reduce costs associated with marketing while showing significant return on their investments, they’ll need to recalibrate their marketing and communications strategies. The good news is that first-party and earned data-centric strategies rely on significantly less costly tech stacks and can play dual roles in retaining existing patients and turning loyal patients into advocates of your health system. By building a broad base of patient advocates using retention marketing strategies, health systems can simultaneously build long-term drivers of growth and facilitate significantly better patient experience and outcomes.