Marketing Of Hospitals In The Modern Era

Vivek Shukla

India is witnessing an era where new hospitals are being built at a pace like never before. There are exciting challenges that these hospitals are facing while they are being commissioned. One daunting task that every hospital, new or old, small or big, is facing today is the task of marketing itself.

I have spoken to countless doctors, who own hospitals, about their marketing strategies. It is rather unfortunate that almost all these doctors had a dismal marketing strategy, if indeed they had one. For the most part, they were not even aware that a marketing strategy needs to be crafted. What pains me is the fact that millions are spent upon creating a product called a hospital and so little is done to promote them in a professional manner. The people who offer this product are are very well trained in their profession. But what is pitiable is the way this product called ‘hospital’ is packaged and marketed. For those of you who are not clear as to how the hospitals are marketed, here is a glimpse:

Referrals

There is an attempt from hospitals to generate referrals from the Registered Medical Practitioners (RMPs). The hospitals appoint Public Relation Officers (PROs) for the purpose. The job of the PRO is to visit these RMPs every day and ‘lure’ them into referring patients. I wonder, who was the first person to come out with this shoddy idea of luring people with money or other freebies for sending patients.

This is a bad marketing strategy. The simple reason being that once a hospital starts indulging in what is called ‘cut practice’, its competitors will not be far behind to follow suit. They want to lure the RMP with more money. The RMP becomes a pursued commodity who has to be won over at any cost. Commissions, free gifts, dinner and liquor in the name of CMEs and others are offered on a platter to the RMP sitting in a shady clinic in the outskirts of the city or in the villages.

Yes, we all know that it is not legal to offer commissions for soliciting patients. But let’s face it, the cut practice is still rampant.

Coming back to the RMP, all of a sudden, he is made to feel very important. He has discovered a way to make a quick buck. All he has to do is coax a patient to get surgery done (even if it is not required). Once the patient consents, the RMP rushes to the town to bargain for the ‘best price’ for his newly acquired scapegoat.

Now, looking at the strategic business implications of this strategy of alluring RMPs, the hospitals have dug a grave for themselves. All of them are dependent on outsourcing patients. The source that they depend upon is greedy and has no loyalty. Whatever anyone might say, hospitals have ended up on the losing side of the bargain and the RMPs have pulled the tide in their favour. The profit margins are going down even as I am writing this article. The naïve hospital owners have shot themselves in the foot.

Lowering Prices

This is another amateur business strategy. The logic goes- ‘We are both physicians with same skills and if I offer my services at a lower price, I will get more clients.’ Why do not the multi nationals learn from these new-found strategists? Why does not Pepsi reduce the price of its bottle by Rs 2 and spell doomsday for Coke? Going by the same logic, Sony can overthrow Samsung in a month.

Thinking the other way round, why does Pepsi not lower its prices? It is because if Pepsi starts this trend, the competitor will follow suit. Do you think Coke will stay silent if Pepsi reduces the price of its 300 ml bottle by Rs 2? Of course, not. The result will be that both the players will have shrunken profit margins. This may further result in compromising the quality of both the products.

It does make sense if Apollo hospital charges more for a normal delivery than a small town clinic where only one MBBS doctor sits. That is justifiable. But two similar competitors indulging in a price war and shrinking each others’ margins is sheer foolhardy. This brings us to the million rupee question called how to market a hospital in a professional and ethical way?

To answer this question in a very brief way, here are some tips:

Be Unique

Ever heard of the phrase ‘Differentiation’ or USP [Unique Selling Proposition]? Be original, be genuine and be different. Do not imitate what the others are doing. Anyways, who will buy a cheap imitation when the original is already available? There are a lot of creative ways to be different. You could be the most experienced. You could have the best technology. You could also be the most reliable. You could be doing the same procedures differently.

Whatever your differentiation stance, it will work as long as it is authentic and well communicated to the target market. Communicating your marketing stance is yet another big topic. For the lack of space, I am not discussing it here. May be some other time, I will throw some light on that. But I can not resist stressing that don’t copy someone else’s uniqueness or don’t cut your fee to be different.

CRM

This is the thing for tomorrow. CRM or Customer Relationship Management as it called is a very important tool to retain your customers and to make sure that the word of mouth publicity is ensured for the long term.

It is a well known fact that if we retain our existing customers and make sure they buy from us again and again we can increase our business by 10 to 30 per cent.

Also it is cheaper to retain exisiting customers than to find new ones. Loyal customer will recommend you to others. You may find their friends, neighbours and relatives coming to you over a period of time. Perhaps you should appoint a PSO [Patient Service Officer] rather than a PRO.

Essentially, a CRM would include systems of staying in regular touch with your customers. You may need to regularly send them cards, gifts, etc.It will also include inducing the past patients to participate in activities being carried out by your hospital for social causes. Having feedback forms filled during the discharge hour of the patient is one useful CRM exercise. Suggestion boxes and patient satisfaction surveys can also be used.

Focus

Last word of advice from me is- Don’t try to be many things for many people. I will go to the extent of saying that don’t be many things for the same set of people. If you are a famous orthopaedic hospital, just stay with that. Don’t fall into the trap of adding gynaecology or skin specialty. Yes you can become better and better in orthopaedics. No harm in that. But please don’t play with your brand image by making it too confusing for your target market to understand.

Ever noticed, why MacDonald’s is not selling potato parathas? They can try to sell pizzas, but who will eat a pizza at MacDonald’s when Pizza hut is specialist Pizza chain?

Strategy is a long term proposition. So don’t expect to get instant results. It will take time and perseverance. But remember what the old and wise say. They say- ‘Good happen to those with patience.’

I personally feel that marketing and business strategies are more or less absent from this burgeoning healthcare industry. The sooner the light dawns on this critical aspect of business, the better it will be for the healthcare industry.

The author is a marketing consultant, based in Dharamshala.
Email:vivekshukla2002@hotmail.com