Grow the Core

As I mentioned in a previous post a couple of weeks ago, I recently spent an invaluable day at the corporate headquarters of American Express in New York along with key members of my marketing team. As we discussed the practice of consumerism and marketing our services directly to consumers, the folks at American Express reiterated the importance of focusing first, and foremost, on one’s core customer.

During that conversation, I was reminded of cautionary tale about Gatorade, the leading sports drink manufacturer, and what happened when they strayed away from their core customer. Since its inception in 1965 when it was first formulated as replenishment beverages for the University of Florida football team and for years that followed, Gatorade’s core customer was the “athlete” looking to energize pre-workout or recover after a game or training session.

In 2001, PespsiCo acquired Gatorade and Coca-Cola, in an attempt to compete for a share of the sports drink market, created Powerade. As a result, the two companies engaged in a price war, along with over 1,400 other brands of noncarbonated beverages. Gatorade saw short term benefits, due to their discounted prices, but it wasn’t long before they started realizing their loss in brand strength.

The result was a decrease in market share as their new customers proved to be elusive and the core athlete started to leave in pursuit of other sports drinks. Gatorade has since recovered by refocusing its brand and marketing its sports drink lines to appeal to athletes of all different levels from the high school student to the marathoner. They invested in innovation, differentiating their core products, and expanding their footprint globally. Their focus was now on defining the sports drink category rather than being reactive and playing defense.

The reality is that in most for-profit businesses, core customers are responsible for the largest percentage of a company’s revenue. Subscribing to the Pareto Principle, some would even say that 80 percent of revenue is generated by 20 percent of customers. Core customers are also more likely to be in it for the long haul and will be the most forgiving when external forces hit. As they like to say at American Express, we should be “growing the core, then adding more.”

At Jupiter Medical Center, we have developed a continuum of care that is completely patient centered. Everything from outpatient ambulatory services, through acute care to a post acute environment, the continuum is designed to support the medical needs from birth to end-of-life care. As our continuum of care expands and the market shifts, there is a greater need to refocus on the idea of our core customer. Historically, our core has been the critically ill. We have been taking care of and marketing to this consumer segment for years. But as we move towards a health and wellness platform, we need to ask ourselves – is our core customer changing? Or perhaps, consider the idea that we may have more than one core customer? Asking these questions and having these conversations will become crucial if we are to remain successful.

One Customer at a Time

As I explained in my last blog post, my team and I recently spent an amazing day listening and learning at American Express headquarters in New York. With the health care landscape dramatically changing, consumers taking a much more active role in their health care choices and directly managing their health care spending dollars, we now find ourselves operating - for the first time - as a retail business. This means directly marketing our services to consumers. Given our new position, we need to reach outside of our sector to learn directly from those at the forefront of consumerism.

While we gained a large amount of knowledge and came back with ideas that we can implement right away as well as information that will help us develop long-term plans, the biggest take-away for me was the critical need to understand our consumer’s decision-making journey when it comes to health care spending. More specifically, how can we identify all the points of engagement between us and our consumers that influence their health care purchasing decisions? And then based on that, how do we develop a relationship based on high levels of satisfaction that motivate them to choose our services over a competitor? As with any consumer purchase - from banking to food - understanding what consumers are looking for and how we speak to them is critical in order to convert them into customers.

American Express has been quite successful at building a large and loyal customer base by putting this into practice and delivering quality experiences from the first moment of consumer engagement and throughout every interaction down the line. I saw this up close when I recently applied for a credit card. They were able to engage me at the right time while online, and they led me through a process so simple and swift that I called them directly to make sure that everything was actually legitimate. Since that time, they have followed up and provided opportunities to better understand my purchase habits and marketed benefits that they knew would speak to me based on where I was at in my consumer journey. Through all of this, they personalized the content (without seeming invasive), kept the whole experience user friendly and made sure they added value along the way. To say they are succeeding in their consumer marketing strategy would simply be an understatement.

And while the purchase of health services is different than the acquisition of a credit card, the need to understand consumer behavior and consumer decision-making still applies. Health care is an emotionally charged transactional process. By this I mean, people are rightfully emotional when it comes to decisions about their health or the health of their family members. Therefore, we must work to understand these feelings and how they influence the decision making process. People want to feel that they can trust a provider to care for them and their family when they are most vulnerable. Given that health care is a business highly influenced by referrals and reviews, the opinions of friends, family and other consumers play heavily in a consumer’s purchasing decision.

Keeping these things in mind and as we look to operate in this retail space, we have begun the process of developing our own consumer journey map. This will allow us to do two things: the first is to identify and catalog all of the points where we interact with potential customers and the second is to lay out both the channels and content of our communications. We are doing all of this while continuing to provide the highest quality experience that we possibly can.