Medical Practices Increasingly Embrace Technology-Based Marketing

Author: Bert Kollaard

August 2009

Medical practices today are facing numerous and unprecedented business challenges.  In addition to growing regulatory scrutiny, government mandates, reductions in third party and government reimbursements, and qualified personnel shortages, the emergence of “consumerism” has proven to be highly disruptive to the health care industry. As a result, medical practices are under pressure to develop ancillary services and revenues.

Not surprisingly, medical practitioners are addressing these challenges in various ways and technology plays a key role.  Initially, medical practices strengthened their bottom line through technology-driven operational and procedural adjustments such as operating cost cutting, productivity increases, improved coding, medical billing and collections. Today, the most proactive and visionary practices are also focusing on applying technology-based programs to help grow their practices by attracting new patients, strengthening their relationships with existing patients and focusing on referral building.

Given the reality of a growing consumer driven market, population and demographic changes and longer sales cycles and more complex sales processes, medical practitioners are increasingly embracing technology-based marketing as a means for helping them achieve their goals and objectives of growing their business, revenues and profits.  

While personal demographic characteristics are a useful way of segmenting the consumer market and differentiating between various sub-segments, this approach does not take into account the dynamics of consumer behavior, attitudes, opinions and beliefs. These are shaped by experiences, and play a critical role in the purchase decision making process.

The healthcare market is not unique in this respect and, as pointed out in the 2008 survey of Health Care Consumers by the Deloitte Center for Health Solutions, “…..the health care market is clearly not homogeneous.” Different behaviors and attitudes derived from personal experiences vary widely and play a key role in the choice of consumers with respect to healthcare providers, the services they provide, the treatments they pursue and the way they pay for the services they receive.

Extending market and audience segmentation to incorporate attitudinal and behavioral dynamics provides a valuable added dimension to the marketing tool box.  The use of Deloitte’s approach to segmenting the health care consumer market is a useful complement to the practice and demographic segmentation approaches typically used by many medical practices.  And, this approach can be especially useful in selecting the optimum technology-based and traditional promotional/communications vehicles and tailoring the messaging to highly targeted sub-segments of patients.  

This can perhaps be best illustrated by exploring what patient segments are more inclined to use technology as part of their desired care delivery.  According to health information firm Manhattan Research, a growing percentage of physicians, reportedly 39% in 2009, are interacting and communicating with their patients online.  In addition, more and more health insurers are paying for treating patients virtually, as recently reported in the Wall Street Journal.  Therefore, targeting and reaching patients who are open to, and at ease with the use of technology and alternative care settings could be a cost effective and potentially lucrative approach to expanding a medical practice with new patients as well as building stronger relationships with technology oriented existing patients.    

While it is widely acknowledged that people under the age of 55 are typically more likely to be familiar and at ease with technology than older generations, recent surveys show older generations rapidly catching up to their younger counterparts, as reported in last month’s issue of Technology First.  As a result, age alone or in combination with other previously assumed demographic characteristics will become a less effective segmentation discriminator.  

Rather, looking beyond these more traditional characteristics and taking into account attitudinal and behavioral criteria could be a more cost effective and productive means for segmenting, reaching and communicating with existing and potential patients.  One useful model is the health care consumer segmentation schema formulated and used by Deloitte’s Center for Health Solutions, consists of six distinct segments of the US health care consumer market.   

Utilizing the underlying attitudes, beliefs and experiences associated with each of the six segments, medical practice marketers can optimize their marketing effectiveness by tailoring their messaging as well as their promotional/communications vehicles to the specific segments.   

In terms of the earlier example of health care consumers who are more inclined to be open to and willing to utilize technology in the delivery of their care, review of the underlying attitudinal, behavioral and experiential characteristics reveal that consumers characterized as information seekers and those open to alternative/non-conventional health services and settings tend to be the most likely to be using online resources.  And, typically, these types of consumers can be found predominantly in the “Online and Onboard” and “Out and About” segments.  

For those medical practices committed to using technology-based marketing to grow their revenue and profits, effectively tailoring marketing programs, messaging and promotional/communications vehicles to behavioral and attitudinal characteristics of the targeted prospect and customer segments provides a powerful tool. Using this approach, medical practices are more likely to realize a highly cost effective return on their marketing investment.

Bert Kollaard is Vice President of Strategy and Planning for TDH Marketing, Inc., a Dayton, Ohio-based marketing firm with alliances and joint ventures in the U.S., England, The Netherlands and Singapore that support its global client base. The firm provides strategic, marketing and operational planning and implementation for large, mid-size and small corporations looking to develop profitable, technology-driven business growth.