Physician Marketing Strategies [new title

Kellogg s or Post! What can you learn from Circuit City! Apple anyone?

Anuj Pant November 2010
With increased competition from competitor facilities, physician relations and marketing must continue to move forward; finding ways to improve upon the services they provide to clients. Companies that succeed are those that realize the need for modernization and understand that lack of it will lead to stagnation in their businesses. Hence they take steps that will create a niche for them in the market and will help them gain a bigger share in their industry. The present times filled with uncertainty and doubt present itself as challenging and exciting by virtue of the fact that companies will need to chase a decreasing number of customers.

How can you better prepare for market downturns like the recent recession? Can you do something in the present that will prepare you for the events that are beyond your control?
Undoubtedly you as liaison officers are well aware of the recent market downturn and like so many other industries, healthcare has been affected as well. Not only are patients holding back on non-essential medical procedures such as hip replacement and other minor procedures, they are more likely to wait on other non-life threatening procedures too. Unlike yesterday when patients would come to a hospital whenever they needed care, patients today are more prone to prioritize health needs. USA Today reports that in the first six months of this year, healthcare spending declined by 0.2%1 and looking at slow pace of the market recovery, it doesn t seem very likely that this will improve in the short-term. Given these long odds, the only plausible way to start your company s recovery is innovation: whether it is in terms of delivering new products to the market or better dissemination of information about your existing services to a larger base of customers than you currently have. Throughout this year, the thought that has been taped to the head of any marketer, healthcare or otherwise, is the fear of declining business. The bad news is that business has declined on all fronts and not just healthcare. The even bad news is that things might not improve in the short term. However, the best news is that it doesn t have to be that way for your business. With clever marketing and better utilization of the existing resources you have, you will be able to

grow in any market conditions and should also be able to ride out through any downturn with a bigger market share than you previously had.

Kellogg s or Post!

Recessions often weed out weaker brands making category leaders even stronger. 2 Brand Building in a Recession

In the late 1920s, the country was entering the Great Depression. Just like any other market, the sales of cereals were falling. In the face of decreasing sales and increasing hardships, Post cut back on advertising spending 3. At the same time however, Kellogg s took the other way around: it doubled its advertising budget and focused heavily on radio advertising releasing its new cereal Rice Krispies [Snap, Crackle, and Pop also appeared during this time]. Now turning the clock to 1933 when the country is still in the midst of the depression, we see that the strategy taken by Post backfired. Its sales remained sluggish. On the other hand, profits at Kellogg s had risen by thirty percent. To this day, Kellogg s still remains dominant in their market and Post has had to play catch up ever since. Let us now play a little game. The answer: Kellogg s. I think I can guess your question: which company would you rather be? Unsurprisingly, the Kellogg s strategy has been imitated by many other companies. Hospitals in Chicago spent 16% more in advertising in 2008 than in the previous year with some hospitals spending almost 70% more than the previous year. This spending spree despite the recession only shows that marketing is a very effective way of increasing business during slumps. In times of tapering market conditions, marketing can help stroke up demands by keeping your brand and products in the public consciousness. The first casualty of downturn is always marketing budgets; but if you decrease marketing efforts, it only follows that customers number will soon follow suit. So, if you are in a situation with lower advertising budgets, find out one strong point that sets you apart from all of your competition and focus on that core strength. Good marketing is a very important ingredient of any good business plan and marketers must understand that lack of it will hurt their business.


Mark Gallagher and Laura Savard Brand Building in a Recession 3 James Surowiecki Hanging Tough (The New Yorker, 2009)

What can you learn from Circuit City!
There was a time when Circuit City was a retailing juggernaut; but that was the past and now it is non-existent in any physical form. Having successfully expanded its operation during the 80s and 90s, the retailer rested in its laurels while old competitors advanced and new competitors took a slice of their pie. In the face of decreasing sales, Circuit City took a new step to cut costs. It fired 3000 of its best performing salespeople and replaced them with high-school teenagers. As a result of this, customer satisfaction dwindled. So did sales and now, the company is gone.

Business has only two functions - marketing and innovation. - Milan Kundera


Circuit City could not understand the nature of its own business. In electronics retailing, a store needs salespeople that understand the products on sale because of the complexity of the sale and a natural tendency of customers to know as much as possible before investing on a $2000 HDTV. Hiring high-school students works for Walmart because in Walmart, salespeople are clerks that stock products on the shelf. Nevertheless, Walmart too has a dedicated electronics clerk in every superstore. You, as liaison officers, need to understand your business and know what potential patients look for. You are in the business of long-term relationships with physicians who send you their patients hoping that they get the best care. McKinsey Quarterly shows that 70 % of doctors were influenced by their patient s requests when deciding the hospital to send their patients to5. Thus, one bad experience will result in the patient moving to a different hospital.

Tactics will get you nowhere if you present them to the wrong person, in the wrong fashion, without sufficient information, or at the wrong time. 6 - Neil Rackham
Unlike a travelling salesman, the success of your enterprise depends entirely on properly disseminating the right information about your product to the right person. Thus a key factor defining your achievements is how good your liaison officers are when they talk to physicians. Although you are selling the same services, you need to treat each physician differently and
5 Kurt D. Grote, John R. S. Newman and Saumya S. Sutaria A better hospital experience (McKinsey Quarterly, 2007) 6 Neil Rackham Strategic Selling (William Morrow and Company, Inc., 1985)

ensure that your liaison officers are well aware of all of the needs of the physician and his/her patients. MRI is one machine but it is used differently by different physicians. Hence, ensure that your liaison officer is well-informed about the services offered by an MRI to an orthopedic which could be different from what the same machine offers to a cardiologist. Refer to previous MarketWare whitepapers for more information on what fellow marketers have done to attract more business: The SPLIT Factor in Physician Relations talks about how an audiology clinic in Idaho used the SPLIT factor to maximize referrals to his clinic. How To Ask The Right Questions can provide you with information on how liaison officers can make the most out of physician visits. Most other marketers are obliged to create a demand for their product. Physician liaison officers have this taken care of. You are offering a service that patients and doctors cannot do without. The only task that remains is to properly address the customer s needs. Hence, some research into customer s demands can go a long way into getting a referral to come to your establishment.

Apple anyone?
Apple has ceased to be a fruit anymore. To anyone living today, Apple is the company that makes MacBook, iPods and iPhones. Today, Apple is the epitome of innovation and originality. With cutting edge products, Apple has consistently stayed ahead of the field. Do we really need 40000 songs in our pocket? However Apple came up with a 160 GB iPod and it sells even to this day. (I should know; I bought mine recently!) Pairing innovation with creative advertising, Apple has created a demand for its products in the market that did not exist before and has always been very successful at this.

In the business world, the rearview mirror is always clearer than the windshield. 7 - Warren Buffett
The biggest challenge for any company is preparing for the future. While anyone will say that predicting future is mumbo-jumbo, there are various tools that you can use to forecast the prospect for your hospital. As physician liaison officers, you need to focus on two matters: liaison relationship with physicians and how satisfied are patients with your hospital.


Liaison officers have a direct contact with physicians and are in the front-line in your battle to get referrals. Past statistics is always a great starting point when trying to predict the future. Hence, these officers should always keep records of their past physician visits to see what strategies worked and other that did not. These records will serve as important gauze of what will work in the future and can also provide you information with the approaches that can work. In a recession environment, these statistics are the cheapest investment that you can make towards better preparing yourself for the future. Patient satisfaction rating is another important measure of how successful your hospital will be. Remember that a physician will be less likely to refer a patient to your hospital if his previous patient had a bad experience at that hospital. Hence, you should always be aware of how patients feel about coming to your hospital and this can serve to be the most important measure of future successes. Cancer Treatment Centers of America (CTCA) use Net Promoter® Score to measure customer satisfaction8. This survey is based around one question: How likely are you to recommend this company or product/service to a friend or colleague? On a scale of 0-to-10, customers are rated as loyal if they score 9 or 10, passive customers are those that score 7 or 8 while those scoring lower that 6 are classified as detractors. This scale is very important in companies such as Apple, Four Seasons Hotels, American Express, General Electric and Philips as it helps quantify the impact of the services provided by the company. Research also shows that that companies with loyal followings grow revenues at more than twice the rate that their competitors do.

Marketing and Innovation
The importance of these two words cannot be understated at any business. For any business, there can only be two life stages: growing or dying. You can choose where you want your business to be. With increased competition and market slump, innovation and proper marketing can be the advantages that set you apart from the competition that you face.


Julie Coffman and Phyllis Yale Would you recommend this hospital to a friend? (Bain & Company, 2007)

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