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Weekly UpdatesEXECUTIVE SUMMARY
'This essay examines the emergence of consumer-driven healthcare marketing, including its operational definition, how it has been used in the past, and how it has evolved. Specifically, marketing practices in other industries are inspected to understand the factors that have contributed to their successes and to determine the relevance of these efforts to healthcare marketing. The advantages of new, technology-enabled marketing opportunities are considered as well, such as stealth ads, blogs, podcasts, and corporate participation in social networks. The implications of the regulation on healthcare websites, along with the work-around strategies used, are analyzed. Lastly, the essay submits recommendations for the healthcare executive when implementing a consumer-driven healthcare marketing plan.
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Blue skies, shining on me. Nothing but blue skies do I see." These pleasing words, penned by Irving Berlin and sung by Cole Porter, lofted from television speakers across America. The song accompanied a hot air balloon drifting across a backdrop of cloudless blue sky. Then, a gentle voice encouraged the viewer to "see your doctor about Claritin" because a "clear answer is out there" (Pines 1999).
With this vague yet revolutionary commercial that aired in 1996, Claritin set the precedent in the era of consumer-driven healthcare marketing. Although it was not the first pharmaceutical commercial to air on prime-time television, the Claritin ad was unparalleled in capitalizing on the healthcare consumer's desire for control. At the least, the commercial transformed the pharmaceutical industry into a multibillion-dollar enterprise that spends twice the amount of capital on promotion as on research and development (York University 2008).
THE EMERGENCE OF CONSUMER-DRIVEN HEALTHCARE MARKETING
"Marketing," according to the definition by the American Marketing Association, is the activities and processes for creating, communicating, delivering, and exchanging offerings that have value for customers, clients, partners, and society at large. Marketing is not embodied by any one technique; it is a broad endeavor that involves relationship-building methods that rapidly multiply as technology evolves. Also, marketing is not just limited to promotional techniques; it extends into product conception, pricing structure, distribution channels, customer service orientation, public relations, and overall strategic planning.
The term "healthcare marketing" builds on this definition, relating traditional marketing activities and processes to the healthcare field. This transition seems simple, but it dramatically affects the functional characteristics of marketing itself. Healthcare marketers promote a service that is complicated, expensive, and even frightening (Shaw 2008). Many people refuse to envision themselves as users of hospital services and adamantly avoid advertising that declare the statistical chances of their future medical need. Therefore, the traditional practice of targeting products and services to specific audiences and communicating brand images to the community are often ineffective in the healthcare context.
Toward the end of the twentieth century, challenges in profitability, customer loyalty, quality of care, and market dominance drove hospitals to install a formal marketing function, which emulated the practice in other industries. However, the dilemma of promoting a brand versus identifying and meeting customer needs muddied the healthcare waters to the point that, by 1991, only 20 percent of hospitals demonstrated a high degree of marketing orientation (White, Thompson, and Patel 2001). The pervasive challenges of healthcare marketing have plagued more than just hospitals; nearly every sector of healthcare has struggled to determine an effective means of marketing. Even for the nursing home sector, "marketing practices have remained focused on traditional and relatively constrained practices" (Calhoun, Banaszak-Holl, and Hearld 2006).
In 1995, Newt Gingrich, former Speaker of the U.S. House of Representatives, boldly announced that the approaching information age would mean more decentralization, more market orientation, more freedom for individuals, and more opportunity for choice (Gingrich 1995, 92). Shortly thereafter, the Internet was introduced for public use, which promptly connected more than 25 million computers in more than 180 countries. The Internet pioneered a new approach to acquiring information. Suddenly, a wealth of data was available to the general public that could be exchanged and archived in real time from the comforts of home. For marketing, that availability presented new challenges to developing "face time" with consumers through new media and limited the control over consistency of messages: Advertised claims could easily be verified, and electronic sources provided a sounding board for disgruntled consumers to voice their dissatisfaction.
The change in mind-set of consumers greatly affected the healthcare industry as well. Many hospitals elected to take a proactive approach to Internet marketing by instituting websites that were "online business cards" in nature. These early websites provided straightforward information pertaining to the services and products offered, the equipment used, and the locations where services were available. However, these sites offered little interaction with visitors and failed to incorporate the multi-user advantages offered by online applications.
While healthcare's online presence remained relatively stagnant, other industries devised innovative ways to use their websites to engage consumers. Sites were designed to harvest information about their visitors for future marketing efforts, and interactive abilities allowed consumers to customize online tools and features to fit their preferences. Southwest Airlines, the first major airline to launch a website, generates more than 57 percent of its annual revenues through online bookings. The website is today considered to be the largest in the airline industry and ranks as one of the largest e-commerce sites (Ruano 2004).
For healthcare, the monumental influence of the Internet has begun to tip the scales on the deficiencies of conventional marketing. As consumers have become more sophisticated with their use of the information superhighway, the locus of control in healthcare has shifted from the provider to the consumer. The new focus on customer wants, needs, and expectations has fueled the rise of consumer-driven healthcare marketing. This fresh approach to marketing recognizes the participant's role in the delivery of care and the promotion of health education and wellness (Calhoun, Banaszak-Holl, and Hearld 2006).
The buzz of opportunity in consumer-driven healthcare has attracted several big-name companies, such as I.D. Power and Associates and Nielsen. That interest could prove to be pivotal for healthcare marketers. Most patients do not understand hospital ratings assigned by the Joint Commission and other healthcare entities, but most consumers know the meaning of the I.D. Power trophy (Robeznieks 2007). These recognizable merits could change the way healthcare stimulates relationships with its online consumers. Table 1 compares conventional marketing techniques and characteristics with those of consumer-driven marketing.
INDUSTRY COMPARISONS
In 2004, the Society for Healthcare Strategy and Market Development of the American Hospital Association published a report on marketing effectiveness that reveals a chasm between what chief executives want and what most hospital marketers are delivering (Sturm 2005). Further, the study states that many healthcare executives believe that growth is, almost exclusively, a function of patient acquisition, whereas CEOs from other industries expect revenue growth to come from existing customers. Because many healthcare markets have limited options for growth through acquisition, healthcare marketing plans must be reformulated to address retention strategies and measure how marketing influences patient satisfaction. To do so may require an evaluation of how other industries have grappled with the challenge.
Seeking inspiration from beyond the constraints of the healthcare industry is far from a novel approach. Patient safety and quality in healthcare have both been improved by borrowing best practices from other industries (Shaw 2008). For example, factory principles have contributed to streamlining hospital operations, the airline industry has provided models to improve communication and enhance safety, and Disney has had a profound effect on the way healthcare organizations engage consumers (Lee 2004). The precedents established from learning by imitation can easily extend into the marketing arena.
Example from the Banking Industry
In many ways the evolution of healthcare parallels that of banking. Both industries are highly regulated, offer relatively universal services, and work to combat stereotypes of giving impersonal service and having self-serving agendas. In recent years, both hospitals and banks have attempted to reinvent their image by renovating their campuses into sophisticated spaces designed with a markedly retail flair and comparable in comfort with coffee houses and elite hotels. The difference for banks, however, lies in their ability to transform the mechanics of burdensome regulation into a selling point of the marketing plan.
The majority of the banking industry is regulated by the Office of the Comptroller of the Currency. One of the criteria used to monitor the performance of banks is the degree of compliance with the Community Reinvestment Act (CRA), which was originally passed in 1977. CRA mandates that all banking institutions that receive Federal Deposit Insurance Corporation (FDIC) coverage be evaluated to determine if they have met the credit needs of their entire community in a manner consistent with safe and sound operations. The three main evaluation aspects of CRA include community investments, community service, and loans to community-based not-for-profit organizations.
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