Why Targeted Marketing Gets Better Results

know your customer

Even though digital health startups have the potential to solve health care woes, that doesn’t necessarily mean potential buyers can see the real value of these innovations.

With fragmented health systems in the United States, reaching your Total Adjustable Market (TAM) can be complex and frustrating. To make matters worse, depending on your niche, sometimes only a small portion of that market is ready to buy at any given moment.

Now more than ever before, if your digital health startup is going to sell, drive revenue and see an ROI on your VC’s investment, your marketing strategy must understand and relate to your audience better than anyone else in your market.

But here’s the good news - you can know your customer better than anyone else.

Real challenges facing HIT startup marketing

Many health technology startups are pros at building innovative solutions, yet as they build their product, they may forget to understand at a deeper level what the market needs.

In particular, startups don’t understand their buyer on an economic, resource, and decision-making level. What does this mean for the sales process? Startups may not be reaching the people who have the veto power - the ones who really influence purchase decisions.

Plus, since health care is a multi-tiered system made up of CEOs, committees, department heads, clinicians, and the like, health tech marketing may be reaching one level while missing other important influencers in the buying process.

So digital health startups face a problem when it comes to marketing. With such a diverse audience, how can they relate to their buyers and draw attention to their life-saving technology?

The solution: market intimacy

Colin Hung, a marketing executive in the health tech space, joined me on the podcast a few months ago to discuss the relevance of TAM in HIT marketing. Even though health care is massive, startups need to define their TAM so they can break down their market into smaller, more reachable segments.

The goal is to narrow down to your serviceable obtainable market (SOM) and ideal customer profile (ICP) - in other words, the buyers that you can actually convert. Breaking down the health care market into the people you can actually reach will help you hone your messaging and differentiate yourself from the pack.

Not only does this impact your marketing, but it also impacts startup funding. TAM, SOM, and ICP is key to convincing investors of the opportunity in the marketplace. Many stakeholders want to know how you’re going to develop intimacy with your audience and drive revenue before they invest in your startup.

With all this background in mind, let’s walk through how to break down your TAM into these bite-size pieces known as SOM and taking it one step further to your ICP.

Creating an ICP blueprint

An Ideal Customer Profile isn’t guesswork. It’s a strategy that’s validated by talking directly to your target audience and then activated based on customer expectations and desires.

Step 1: Look outside-in

The starting place for developing your ICP is research. And by research, I’m not necessarily talking about Internet searches (although it may include some of that).

Face-to-face

Research involves talking to your ideal customers face-to-face. The best case scenario is to ask open-ended questions in person or via videoconferencing. Next best is to reach them with a phone call or voice conference.

Face-to-face interactions are so important because, unlike emails or surveys, you get a chance to hear how your buyers feel as well as what they do on a daily basis (i.e. workflow, habits, frustrations, etc.).

Why is this important? Most consumers can’t articulate what their real problem is. But they CAN express sentiments and frustrations. From this, you can derive their real problem.

Surveys

All that being said, surveys are also a great way to get feedback from potential buyers, and they’re much more scalable for long term growth in your startup. But this method should be your second string of information gathering. In other words, they’re a supplement to your initial one-on-one conversations.

Step 2: Look inside-out

To calculate your SOM, you need to answer some key questions about your target audience as listed below.

  1. What’s the size of the organization you’re targeting?

  2. Who’s making the decisions?

  3. What other outside forces could impact their decision?

  4. How does your ideal customers buy?

  5. What are their pain points?

  6. How do they really feel about their problem?

  7. Where do they learn?

  8. What’s your vision for your customer?

Let’s take a brief look at each one individually to understand how they can impact your marketing and revenue.

What’s the size?

Especially in health care, size is important to consider. For instance, if you’re addressing privately-owned, primary care practices, your strategy will be very different than if you’re trying to reach broad health care system.

So does your marketing strategy need to reach multiple tiers of health care hierarchy? Or does it simply need to reach one or two key people within a system?

Who’s making the decisions?

For both marketing and sales, you need to know where to find the person who’s the key to driving conversions. In addition, it’s important to consider if the decision-makers are also the end-users because many times in health care they aren’t.

So while the decision-makers are the primary people you need to reach, end-users (such as department heads or primary care physicians) can prevent your solution from being purchased. In other words, if you don’t reach end-users, you could be compromising a sale.

What other outside forces could impact their decision?

I keep hitting on this, but health care is a multi-faceted machine. Not only do you have social factors (such as the social determinants of health, like limited access to healthy food choices) that influence health care, but you also have government regulations such as the recently established MACRA and MIPS.

Factors like these can directly impact the decisions of your target audience, meaning you MUST take outside influences into account when marketing your product or service. Otherwise, your SOM may feel like you don’t understand their problem, driving them to choose another solution .

How does your customer buy?

What steps does your target audience take in buying a product or service? How long does the buying process take? If you don’t understand their buying process, you may miss a key factor to make the sales process smooth, resulting in them choosing another vendor.

What are their pain points?

By pain points, I don’t just mean their problems. I’m referring to a whole swath of frustrations, goals and values your customer holds to. Consider these questions:

  • What matters most to them?

  • Are you solving their biggest needs?

  • What personal values impact their decisions?

  • What keeps them from reaching their goals?

  • What financial pressures are they facing?

All of these factors influence the likelihood that potential customers will buy from you. If you can verbalize these particular pain points to them via emails, content creation, and verbal conversations, buyers will feel understood.

And buyers tend to purchase products from companies that understand their unspoken frustrations while relating to them on an emotional level.

How do they really feel about their problem?

As was already mentioned, customers probably won’t be able to tell you what their problem is. However, they typically can express their feelings and habits that will give you a clue about their real problem. All this to say, tapping into their feelings can set you apart from your competition in a good way.

Where do they learn?

Understanding how your target audience learns can help you hone your messaging to meet their needs. For instance, audiences with time constraints may learn better from webinars or short interactive videos. Others may be geared towards written content while some may prefer a touch of both.

Regardless of how your target audience learns, the whole point is this: if you understand how they learn, you know how to influence them. And those who influence the best typically get the sale.

What’s your vision for your customer?

Is your tech solution just a tech solution? Or do you actually want to take your customer on a journey - a journey that changes them for the better?

Again, this can set you apart from all the other tech startups out there. Customers want to know where you’re going to take them and who you’re going to help them become.

But if you can’t even verbalize this to yourself, your marketing team, or your partners, you’re not ready to effectively communicate it to the people who matter most - your buyers.

Step 3: Making the data useable

All this research and analyzing will get your marketing nowhere if it isn’t usable. That’s why the next step is to put this into data into a checklist or table that gives your team a quick view of your ICP.

Your list may want to include categories and bullets for these key points:

  1. Your Goal

  2. Their procedures

  3. Pain points

  4. Better procedures

  5. Measurable metrics

  6. Diagnosing their problem

  7. Answering their reluctance or criticism

By breaking all the data down into a “cheatsheet,” your startup can use it to direct conversations and content marketing strategies, keeping your customer at the center of everything you do.

Are you ready to identify your TAM, SOM, and ICP and get actionable growth strategies that drive revenue for your startup? Register for “How to Scale Your Digital Health Startup,” where you will learn from 5 industry experts about how to create your growth trajectory.

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WHO IS WHITNEY?

Whitney is a consultant, speaker, and writer on a mission to help life-saving, life-changing technology break through the noise and achieve mass user adoption. Learn more about her here.

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