Howard Shiffman, Senior Associate OPEN MINDS April 29, 2014

1. Ohio Association of Child Caring Agencies (OACCA)How To Embrace New Marketing Tactics & Shift Away From Traditional Marketing Models Howard Shiffman, Senior Associate OPEN MINDS April 29, 2014

2. You Need No Marketing When. .. • You have a very large unrestricted endowment • You have guaranteed sources of future funding for what you do • You have no competition for your current sources of revenue • You are in a market with little change in either financing or service delivery If this is your organization, you should sit in on a different session. . . OPEN MINDS © 2014. All rights reserved.

3. OPEN MINDS © 2014. All rights reserved.

4. Agenda I. Trends Driving The End Of Traditional Marketing II. The New Role Of Consumers Demands A New Approach To Marketing III. New Tactics For Successful Marketing In Today’s Environment IV. Forward Thinking Marketing Strategies V. How To Adapt Your Organization’s Marketing Plan For The Future OPEN MINDS © 2014. All rights reserved.

5. I. Trends Driving The End Of Traditional Marketing OPEN MINDS © 2014. All rights reserved.

6. Technology is Here: Welcome To The Graveyard Of Traditional Marketing Strategies OPEN MINDS © 2014. All rights reserved.

7. What “Killed” These Strategies? OPEN MINDS © 2014. All rights reserved.

8. What Marketing Used To Be OPEN MINDS © 2014. All rights reserved.

9. Old Customer Value Proposition Businesses have traditionally been in the role of producing products or services that help a customer get the job done. In return the customer pays money. This is now an old fashioned way of doing things… OPEN MINDS © 2014. All rights reserved.

10. New Customer Value Proposition OPEN MINDS © 2014. All rights reserved.

11. II. The New Role Of Consumers Demands A New Approach For Marketing OPEN MINDS © 2014. All rights reserved.

12. With More Consumers With Coverage, There Is More Consumer Choices • Consumers have a new and more complex role • Medicare -- and Medicare Advantage • Medicaid – and Medicaid managed care and Medicaid premium support • Traditional insurance have rising coinsurance, copayments, and deductibles • Increasing use of consumer-directed health plans • “Safety net” taking on a whole new meaning in states with Medicaid expansion • “Penalties” for lack of consumer participation in health management OPEN MINDS © 2014. All rights reserved. 12 OPEN MINDS © 2013. All rights reserved.

13. Consumers Are Paying More Out-of-Pocket OPEN MINDS © 2014. All rights reserved. 13 OPEN MINDS © 2013. All rights reserved.

14. More Transparency In Fees • Competition based on price is happening • The internet has created more venues for fee transparency OPEN MINDS © 2014. All rights reserved. 14 OPEN MINDS © 2013. All rights reserved.

15. More Transparency In Performance Measures • Many initiatives to measure and report on “performance” OPEN MINDS © 2014. All rights reserved. 15 OPEN MINDS © 2013. All rights reserved.

16. New Tactics For Successful Marketing In Today’s Environment OPEN MINDS © 2014. All rights reserved.

17. New Rules Of Marketing & PR OPEN MINDS © 2014. All rights reserved.

18. Consider Your Audience OPEN MINDS © 2014. All rights reserved.

19. Create A Great Value Proposition • Deliver what you promise • Promptly fix things when they go wrong • Know your customer’s problems • Create peer networks among your customers • Provide your customers additional opportunities…either with you or with others • Always remember…you have leverage OPEN MINDS © 2014. All rights reserved.

20. Accessing Your Best Resource for Increasing Market Share • Advocates • Influencers • Contributors In other words… OPEN MINDS © 2014. All rights reserved.

21. The Hidden Potential Of Customers – Advocates • Provide positive information about you to their colleagues, networks, and industry audiences. • Example: Consumer, consumer’s family member or caregiver OPEN MINDS © 2014. All rights reserved.

22. The Hidden Potential Of Customers – Influencers • Experts with a neutral or objective view and share their expert opinions • Examples: Associations, payers, government entities, authors, researchers, universities OPEN MINDS © 2014. All rights reserved.

23. The Hidden Potential Of Customers – Contributors • Provide insights or knowledge in a variety of ways—often for free—that helps you. (Not always individuals, but other companies who share data about you) • Example: More involved patients, board members, partner organizations, local community collaborators OPEN MINDS © 2014. All rights reserved.

24. Engaged Customers Will Take Other Steps Too • Referring other customers to you, taking calls, and accepting site visits from your sales prospects to help close deals • Participating in your customer advisory boards to keep your R&D efforts grounded • Having key-customer executives participate in higher-level forums and communities to help keep your strategy focused on top customer issues • Local legislative advocates • Local government entities, i.e., policy planning, school boards • Community leadership • Advocacy groups Existing customers can be your best resource for new ones! OPEN MINDS © 2014. All rights reserved.

25. III. How To Adapt Your Organization’s Marketing Plan For The Future OPEN MINDS © 2014. All rights reserved.

26. It All Starts With Your Strategic Plan. . . OPEN MINDS © 2014. All rights reserved.

27. The Strategy Development & Implementation Cycle OPEN MINDS © 2014. All rights reserved.

28. What Is Marketing? The more competitive a market is, the more important marketing competency is to an organization’s success. . . • All the business activities involved in directing the flow of services from the provider to the customer – the business function responsible for organizational revenues • Understanding the needs of customers and developing a service that meets those needs at an acceptable cost • Act of promoting, selling, and distributing a product or service OPEN MINDS © 2014. All rights reserved.

29. Two Forces in Competitive Market Marketing is the function that assures that customers select a particular producer OPEN MINDS © 2014. All rights reserved.

30. Intersection Of Strategic Planning & Marketing Planning OPEN MINDS © 2014. All rights reserved.

31. Key Market-Related Decisions Are Made During The Strategic Planning Process • Overall organizational vision and mission – which shapes market positioning • Markets to pursue • Service lines to offer • Revenue and return required for each service line OPEN MINDS © 2014. All rights reserved.

32. What Is A Marketing Plan? It all starts with the top line. . . How much revenue does your organization need to meet its mission and objectives? The strategic plan sets service lines – and revenue and return required for each service line. . . The marketing plan is all about how to engage customers (payers, consumers, and donors) to make that happen. • Organizational strategy to guide revenue generating activities • Defines tactics (and customer interface) between the organization, its services, and its customers • Must align to and build off of the strategies and tactics in the strategic plan OPEN MINDS © 2014. All rights reserved.

33. The Traditional ‘Marketing Mix’ (4Ps) Is Now The 6Ps OPEN MINDS © 2014. All rights reserved.

34. Market Segmentation Increasingly Important • The purpose of segmentation is to determine the differences among buyers in order to develop specifically targeted marketing initiatives that meets customer interests and needs. • Example by consumer – Women, mature adult, child, suburban, etc. • Example by service need – Co-occurring, depression management, TBI, health home, etc. OPEN MINDS © 2014. All rights reserved.

35. Elements In The Marketing Planning Process OPEN MINDS © 2014. All rights reserved.

36. Phase #1: Marketing ObjectivesCommon Organizational Marketing Objectives • Revenue for current service -- Net revenues in service X will be $X million in this fiscal year • New contract acquisition – Win five new competitive contracts via proposal process • New service line development -- Service Y will be developed and have two customers by the end of this year • New service line feasibility analysis -- Market research conducted on new service concept Z and decision made whether to develop service within the first 6 months of the year • Revenue diversification -- Decrease % of total revenue from Medicaid from 93% to 88% by increased new service sales of X services OPEN MINDS © 2014. All rights reserved.

37. Example Of Marketing Objectives • Objective #1: Increase the financial stability of the residential treatment program by establishing an average daily census of 250 and average daily rate of $225 in next fiscal year • Objective #2: Selectively expand profitable community-based programs to match market needs and changing demands and increase community-based revenue by 100% - from $16M to $32 M in next fiscal year • Objective #3: Increase and diversify revenue streams overall by expanding Medicaid billing to 25% of total revenue decreasing Federal/state grant revenue to less than 50% in next fiscal year • Objective #4:Create better outcomes in the foster care program by reducing the number of disrupted foster home placements by 20% from last fiscal year in 2014. OPEN MINDS © 2014. All rights reserved.

38. Phase #2: Market Analysis For Marketing Planning • Service line definitions and metrics – what services do you offer and how do they ‘stack up’ against the competition • Analysis of market and customers – what are the available sources of funding and what customers control that funding? What do those customers want? • Competitive analysis – who is competing with you for customers and their funding? OPEN MINDS © 2014. All rights reserved.

39. Phase #3: Marketing Strategy Development • Market Environment • Regulation • Customer Preference • Competitors • Achieve Marketing Objectives • = • Revenue • More Customers • New Services • Diversification • Profitability Marketing strategies – the plan to achieve objectives in the face of environment OPEN MINDS © 2014. All rights reserved.

40. Example Of Marketing Strategies: Residential Program Revenues Objective #1: Increase the financial stability of the residential treatment program by establishing an average daily census of 250 and average daily rate of $225 in next fiscal year. The Marketing Strategies: • Establish the XXXX School as a “center of excellence” for the treatment of children and youth with special needs across all payer types • Garner an increasing share of referrals from educational consultants • Increase the number of managed care contracts • Win residential treatment contracts with the surrounding states and the counties in those states • Improve the conversion rate of inquiries to admissions OPEN MINDS © 2014. All rights reserved.

41. Example Of Marketing Strategies: Increase Community-Based Service Market Share Objective #2: Selectively expand profitable community-based programs to match market needs and changing demands and increase community-based revenue by 100% - from $16M to $32 M in next fiscal year. The Marketing Strategies: • Aggressive marketing of current community-based services (50% of increase) • Development of new community-based services (40% of increase) • Acquisition (10% of increase) OPEN MINDS © 2014. All rights reserved.

42. Example Of Marketing Strategies: Diversification Strategy Objective #3: Increase and diversify revenue streams overall by expand Medicaid billing to 25% of total revenue, decreasing Federal/state grant revenue to less than 50% in next fiscal year. The Marketing Strategies: • Develop more contracts with Medicaid managed care plans for current services • Conduct market research and feasibility analysis of offering a case rate-based program to Medicaid managed care plans • Increase consumer marketing to Medicaid populations eligible for current services OPEN MINDS © 2014. All rights reserved.

43. Example Of Marketing Strategies: Improved Outcome Strategy • Objective #4:Create better outcomes in the foster care program by reducing the number of disrupted foster home placements by 20% from last fiscal year in 2014. • The Marketing Strategies: • Create a foster care crisis team available to foster parents and market this program to payers • Offer managed care a pilot project that is financially supported by a pay for performance bonus for successful outcomes in foster care OPEN MINDS © 2014. All rights reserved.

44. IV. Forward ThinkingMarketing Strategies OPEN MINDS © 2014. All rights reserved.

45. OPEN MINDS © 2014. All rights reserved.

46. Three Important Marketing Strategies OPEN MINDS © 2014. All rights reserved.

47. 1. Thought Leadership ‘Thought Leadership is establishing a relationship with and delivering something of value to your stakeholders and customers that aligns with your brand/company value. In the process you go well beyond merely selling a product or service and establish your brand /company as the expert in that field and differentiate yourself from your competitors.’ —Craig Badings Thought leadership should be an entry point to a relationship. Thought leadership should intrigue, challenge, and inspire even people already familiar with a company. It should help start a relationship where none exists, and it should enhance existing relationships. OPEN MINDS © 2014. All rights reserved.

48. Forms Of Thought Leadership OPEN MINDS © 2014. All rights reserved.

49. How To Build Your Thought Leadership Regimen • Do NOT write about your company and its products or services • Ask what problems can you solve • Understand your audience • Write for your audience—storytelling rules! • Create titles that grab attention • Promote your efforts • Let the media know your point of view • Track your results OPEN MINDS © 2014. All rights reserved.

50. Why Thought Leadership Works OPEN MINDS © 2014. All rights reserved.