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By Market Intelligence Team

Monday, November 2, 2009

In tight economic times, every health and human service organization is looking for more revenue to shore up a sagging top line. If this includes your organization, a first step in developing a short-term revenue strategy is identifying your customers—and then determining what they need and want.

If this sounds like “Marketing 101,” it is. (And, if you think that basic marketing doesn’t apply to your organization because most of your revenue is from public sources rather than private, you couldn’t be more mistaken.) But basic marketing is not so simple in reality—including answering the question: “Who are my customers?”

For most provider organizations, there are usually three customers—consumers, payers, and referral sources. Developing a customer map—called customer segmentation by marketing professionals—is essential to developing effective marketing plans.

The first step is to start with your consumers. What characteristics define distinct groups of consumers? Payer mix, age, diagnostic group, and community are just a few examples of the types of criteria that can be used to group consumers. In a world where consumer choice is becoming the norm, customer segmentation must include targeting efforts to each core group. Once the consumer map has been developed, understanding and determining what is important to each group is vital to establishing sound strategies and tactics.

The second step involves looking at referral sources for each payer segment. How do consumers make it through the doors of your organization? Are referrals from others agencies, the Yellow Pages, your web site, the courts? Identification of the referral sources within each segment is a necessary component of any customer segmentation exercise.

The third step is looking at payer segments. What do specific payers look for in increasing referrals? Rapid access to appointments? A specific assessment process? Particular service locations or lower fees? For each payer segment, identify both the unique requirements and the opportunities to assume a preferred position. To treat payer segments as a customer involves understanding what is truly important to each payer and ensuring your organization’s marketing efforts promote activities that support such areas of importance. This can pay tremendous dividends if your payer source has responsibilities beyond reimbursing service delivery.

With this exercise completed, your management team can start to develop possible strategies to increase revenues. Without a good understanding of your customer segments, your efforts to generate new revenue could be costly and slow.

For more on developing marketing strategies to target each customer group, access my recent article, “Who Is My Customer Anyway?: Recognizing Distinct Customer Groups & Tailoring Marketing Efforts Effectively” PREMIUM, featured in the October issue of OPEN MINDS. If you have any questions about how to use customer segmentation in your planning process, don’t hesitate to shoot me a message at

Jeremy Mann
Senior Associate, OPEN MINDS

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For more on marketing and assessment of effectiveness in this unique service space, access my article from last month “Manage Marketing Dollars Using Performance Metrics: Make Estimating Your Marketing ROI Possible by Moving From Context to Metrics.” PREMIUM

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