Measuring Your Website COI: The Cost of Inactivity
How much are you losing to delay (or forego) your website recommendations?
In the pharma industry, we know it too well. We know it because it’s threaded throughout our own marketing messaging:
“Don’t wait! It could cost you.”
“Acting early will give you the best chance for success.”
“It’s not worth the risk to stand still.”
My mother rarely went to the doctor, smoked like a chimney and was such a bad driver (still is) she once slammed into a parked armored truck. But it was a little mole on her back that almost took her life. She knew about it for years and watched it get worse over time. However, the busyness of life and that back-of-her-mind anxiety of the unknown kept her from getting it checked out until it was almost too late. Skin cancer is the most common type of cancer and generally has a very optimistic survival rate. However, even with both intense radiation and chemotherapy, the doctor told my mom her 10-year survival rate for her Stage IV melanoma was just 15%. Thankfully, we are on year eight and she is still going strong. But the point here is that, if you wait, even something as trivial as a mole can cost you big time in the long run.
So what does this have to do with pharmaceutical marketing? More than you might think. Taking a dose of “early diagnosis” medicine may be just what your marketing needs to get to the next level.
COI: Cost of inactivity
We never forget to consider the cost of doing something, but what about the cost of doing nothing at all? If you’re reading this article, you’ve probably heard the term “ROI” a million times, but I want to introduce you a new term to add to your marketing vocab: COI. Actually, maybe don’t add it to your vocabulary since I just made it up. You might see some blank stares if you throw it out in your next status meeting.
Simply stated, this is the amount of money you are losing by delaying or passing on a project. It’s similar to “opportunity cost” except you’re not choosing a less effective option over another; you’re just choosing nothing at all.
There are probably a thousand reasons for this, and some are absolutely legitimate. By no means do I want you to take from this that you should substitute cautious deliberation and calculated strategy for a guns-a-blazin’ mentality. You should question everything, but that also includes your reasons for not doing something. Below are some of the more common reasons we let our website marketing efforts reflect a slow motion series of events and offer counterarguments against them.
1. “The legal/medical/regulatory review process is too lengthy and painful to mess with this. We don’t have the budget for it.”
This ultimately comes down to not valuing the recommendation enough to move forward with it. If the end doesn’t justify the means, it’s a pretty simple decision. However, sometimes our apprehension about the cost (time, money, frustration) will unknowingly cause us to trivialize the long-term return needed to effectively evaluate the pros and cons. In these cases, challenge yourself to put pen to paper and let the data point you in the right direction.
2. “I don’t think it’s compliant. We don’t have the technology for it.”
In the field of pharma, compliance is nothing to toe the line on.
Even in 2014, sometimes our technology can be limiting.
So what do these two sentiments have in common? They can often be fixed with finding alternative solutions. Outside of marketing, we do it every day. When my wife asks me to pick up a pizza on the way home from work, I don’t say “no” because I had pizza for lunch. Instead, I suggest Chinese (actually, I never get tired of pizza) because I’m able to identify that it’s really not pizza she’s wanting; it’s the fact that she’s had a long day at work and doesn’t feel like cooking. So before you dismiss the next recommendation due to technology capabilities or regulatory tape, make sure you understand what is actually trying to be accomplished. Oftentimes there are perfectly good alternatives just around the corner.
3. “We just launched our new website? Why on earth would I need to update it already? My website performance is doing fine.”
“…letting something remain good when it can become great is a secular sin.” Jim Collins – Good to Great
The “if it ain’t broke” mentality fuels mediocrity. No matter how much planning, innovation, precision and quality assurance is done for your new website, it will not be perfect. And even if it is, that will only last for so long. User behaviors change. Search engine algorithms change. The competition changes. Patient expectations change. Bottom line: things change.
Instead, look at your new website as a blank canvas and geek out about the data you’ll capture to power your next iteration. Take calculated risks to forge paths to new and better “best practices.” And if there are doubts? Well, that’s why testing exists.
4. “I just don’t understand it.”
In the ever-changing world of digital marketing where complexity increases daily, sometimes understanding the recommendation is the toughest part. This ultimately falls on those communicating these ideas, but as they say, it takes two. Challenge your team to be clear and deliberate in their explanations. Ask the right questions, including the entire cost and expected return to help you make an educated decision.
How to measure COI
Admittedly, this isn’t an exact science. Depending on the recommendation, there are varying degrees in confidence for what the expected change will actually be.
At a very basic level, these are the steps to determine your COI:
Now here’s a hypothetical example.
My registration form is long and arduous for website visitors. Those who visit the page only fill it out 12% of the time. It’s dipped a little over the past six months, but has more or less stayed consistent. Based on the average ratio of registration form page views to total website visitors over the past several months, along with the expected growth in traffic, I think this page will receive 9,600 visits over the next year (800 per month), resulting in 1,152 registrations.
- 11% of my website registrations become patients.
- The lifetime value of my patients is $1,500 per patient.
- (1,152*11%)*$1,500 = $190,080/year or $15,840/month
If we remove the three fields that we agreed are expendable and created a click-to-expand functionality for the optional sections that take up a lot of space, the form should convert at 19%. This change should not affect the traffic to the page, only its conversion rate.
The cost to implement these changes, the testing needed for proper QA and the cost for MLR review should be around $5,000.
The incremental increase in conversion rate is 7% (19% - 12%). That means at 800 page views per month, the monthly incremental gain would be 56 registrations, which equals six additional patients and an extra $9,240 per month. This means the break-even point will be reached just past halfway through the first month of implementation.
When considering expected cost ($5,000) and monthly increase ($9,250/month), and assuming it will take a month to get fully executed, the COI next month will be $4,250. That number will increase to $9,250 every month after that.
- So what if we wait three months to pull the trigger? That’s a loss of $22,740.
- Six months? $50,490.
- A year? That’s over $100,000 just for sitting on this project.
You might be thinking comparing early diagnosis to a greater urgency in your marketing plan is a little farfetched or even insensitive, but actually they are closely connected in the world of pharma. A better performing marketing plan should result in greater disease awareness, leading to earlier diagnosis and ultimately more effective treatment.
So what website marketing recommendations are sitting in your queue? Can you afford to keep them there?