By Scott A. Regan
Hospital marketing executives nationwide are being challenged to show a return on the approximately $2 billion per year being invested on advertising and marketing. Few have been able to do so. Little wonder why marketing budgets are shrinking during a time of increased competition.
A three-year study – conducted from 1995 to 1997 – of hospital marketing in 11 cities revealed that there is no direct correlation between advertising expenditures and market share. Indeed, in most cases, as an organization’s advertising expenditures increased, market share plummeted. More than likely, it was the hospital’s decreasing market share that initiated an increase in advertising spending in the first place – what we fondly refer to as the “too little, too late” strategy.
Certainly, hospitals from coast to coast can present case studies of marketing programs that generated 376 referrals to their new fibromyalgia program or 3,200 visits per month to their new pediatric e.r. But how often are these market blips sustained? And how much money must be pumped into marketing to do so?
There’s an old truism about healthcare that is indisputable today: The most effective form of marketing is word-of-mouth referrals. Yet, if we still hold this premise as unquestionable, why do we spend the amount of dollars we do on external marketing? Wouldn’t our organizations be better off it we spent it on something a tad more radical … say … employee relations?
With that in mind, toss out the 20-year-old notion that babies on billboards drives market share. Here is the real formula for success:
employee morale : patient satisfaction : consumer preference : market share
The formula works like this:
An organization with a corporate culture that recognizes and rewards its employees, focuses on their needs, communicates openly, builds on its strengths and diverts its weaknesses, and builds a level of trust and respect – both top down and bottom up – will find itself surrounded by employees who are happy, excited, devoted, energetic, and customer focused. Numerous studies have shown that high employee morale directly contributes to high patient satisfaction. It holds that if the patients are extremely satisfied with the care provided, they will not only select that hospital the next time they have a need, but they will also tell their friends, relatives, and colleagues to do the same. Over time, as consumers demand that the hospital be included in their company-sponsored health plan, market share will shift as well.
Beware, the formula also works in reverse. Employees who come to work grumbling about their job and their employer will ensure that patients go home grumbling about their care. These patients will tell everyone within earshot about their awful experience, causing consumer preference to drop and eventually resulting in a loss of market share.
Since the advent en masse of hospital marketing departments in 1982, we have spent billions of dollars attempting to move market share by focusing solely on consumer preference. But if we take two steps to the left – focusing on employee morale – we will ultimately find much greater and more long-term success.
Don’t be fooled, however. Improving employee morale requires more than just passing out turkeys during the holidays. It requires knowing what your organization stands for, what messages your corporate voice delivers on a daily – if not hourly – basis, and how your organization’s persona is characterized internally and externally. It means going beyond mission, vision, and values and taking an introspective look at your organization’s soul. If all of this sounds a bit too metaphysical – the hospital equivalent of the Dahli Lama – then let’s look at it on operational terms that includes five distinct steps.
First, reinforce the culture continually by focusing on your heritage and traditions, shared values, and quality standards. Know the traits and behaviors your organization wants to reinforce, and use your leadership team as a role model. If you want employees at all levels of the organization to act a certain way, make sure your leaders are “in character” every minute of the day.
Second, develop a recruitment program that enables your organization to select talent that is already in sync with your culture. Attitude is more important that aptitude. Make your organizational culture known early on in the hiring process, so applicants who don’t fit the culture and who will not be able to adhere to your organization’s traits and behaviors have an opportunity to self-select out.
Third, train for consistent quality. Teach the traits and behaviors that are important to your organization. If, before exiting a patient’s room, you want every employee to ask – “Mrs. Johnson, is there anything I can do for you before I leave? I have the time.” – teach them to do so. And teach them over and over again.
Fourth, communicate to inform and inspire. Communications should be structured and include individual and group communications; face-to-face communications; and written, verbal, audio, and visual communications. Develop a communications arsenal and know specifically what purpose each communications vehicle serves – from the quarterly town meeting to the daily postage meter indicia.
Fifth, and most important, create an environment of care. All employees want to feel important, wanted, and loved. This means you must sift together the right mix of employee activities and services, benefits such as local merchant discounts or preferred parking, and recognition and reward programs. A free lunch in the cafeteria to acknowledge each employee’s birthday might be a low-cost initiative, but it will have a tremendous long-term impact on corporate culture.
The hospital marketing executive who can successfully change corporate culture – don’t be disillusioned, this is a five- to seven-year process – will also successfully change market share while investing fewer and fewer dollars on external marketing and advertising. As a result, the marketing efforts will become integrated into the operations of the organization. Then, and only then, will you achieve the final milestone: marketing will become invisible.
