Many physicians and administrators consider creating loyal patients an art rather than a science. Others may beg to differ. So, what exactly is the truth? Can science be used to create successful patient loyalty programs, or are successful programs strictly creative in their evolution?
While there is not a one-size-fits-all approach to patient care, evidence from several recent studies indicates that science— specifically psychology—has an application in guiding consumer decision making and enhancing patient loyalty.
Reviewing the following research findings and related tips will help aesthetics practices refine their patient loyalty programs and train staff to rely on proven methods based on empirical evidence. Included are links to articles, blogs, and studies from which the information was obtained. Each source provides valuable information on how the findings can be used as a means to boost patient retention by understanding how consumers think.
Based on current findings, loyalty programs should be designed so that all team members are trained to:
Reframe costs and price points. According to neuroeconomics experts, there are three types of buyers in any industry. These include:
- Average/nonconflicted: 61%
- Spendthrifts: 15%
- Tightwads: 24%
Since almost a quarter of buyers may be deemed “tightwads”—i.e., they are conservative spenders—how should you approach them in your practice? George Lowenstein, professor of behavioral economics at Carnegie Mellon University, recommends creating bundles or packages and using reassuring words when faced with the prospect of selling to conservative buyers. He also suggests reframing the price point as a possible solution. For instance, a conservative spender might initially balk at $800 a year in treatments but later perceive the cost as affordable when it is reframed as a little over $15 a week—the cost of three specialty lattes.
Source: Do You Target Your Marketing Messages to Three Types of Buyers? http://drivingretention.com/target-marketingmessages-types-buyers
Personalize patient care. In a study detailed in the Journal of Applied Social Psychology, researchers found that waiters and waitresses could increase tips by up to 23 percent by the simple act of returning to customer tables with a second set of mints. The research showed that the mints helped to create a personalized experience for the restaurant customers. If mints can have a positive impact on restaurant goers, a little extra personal patient care may go a long way.
Source: Sweetening the Till: The Use of Candy to Increase Restaurant Tipping. http://onlinelibrary.wiley.com/doi/10.1111/j.15591816.2002.tb00216.x/abstract
Provide exceptional service in ALL areas. It is a common belief that when you go above and beyond for your patients, you usually get rewarded with repeat business. However, practices must understand that providing exceptional service in only some areas—but not in others—could jeopardize patient loyalty. This fact is confirmed in results from studies conducted by Maritz Research, a company that develops customer-loyalty programs for Fortune 500 clients. Steve Travell, vice president of Maritz's Strategic Consulting for the Automotive Group, summarizes the concept in a few candid words: “Various factors in the sales and service experience are so important that, if you don't do them well, the customer will severely punish you, even if everything else is exemplary.”
Source: Make or Break Customer Satisfaction. customerthink.com/blog/make_or_break_customer_satisfaction
Utilize a “flexible” budget to give back to patients. Running specials and/or giving back to patients may seem costly, but it doesn't have to be. It is important to understand that even small discounting gestures or specials are appreciated. In fact, psychologist Norbert Schwarz found that as little 10 cents may create reciprocity or a bond between a merchant and a buyer. Allowing your staff to work within an appropriate “flexible budget” for select aesthetics procedures makes these powerful gestures possible. Research also shows that “giving” can be amplified when it is unexpected or “by surprise.” Providing excellent patient care or a discounted service may not seem that unusual to you, but when it is unexpectedly given to your patients, it can have a superb response. Source: 5 Ways to Use Surprise Reciprocity in Your Volunteer Recruitment.
Motivate customers to engage in loyalty programs. The biggest problem with customer loyalty programs is motivating consumers to participate in and complete the programs. This was uncovered in a recent study by Wharton College marketing professor Xavier Drèze and Joseph C. Nunes of the Marshall School of Business at the University of Southern California (USC). To determine how to motivate customers, the two conducted an experiment involving a car-wash loyalty program and 300 consumers. Their results showed that when offered the opportunity to participate in a special program to get a free car wash after paying for a certain number of washes, customers were twice as likely to start and complete the program if they were automatically awarded two washes when they initially signed up for the program. Therefore, giving patients a “jump start” in your patient loyalty programs may be the key to initiating positive success (and retention) in your practice.
Source: The Lowdown on Customer Loyalty Programs: Which Are the Most Effective and Why. http://knowledge.wharton.upenn.edu/article/the-lowdown-on-customer-loyalty-programs-which-are-the-most-effective-and-why/
Make select patients VIPs. Research conducted by Drèze and Nunes on loyalty-program success shows that people respond favorably to being called “VIPs” or “premium” program members. Results published in the Journal of Consumer Research showed that premium programs work best when people are aware of their status compared to others. Do you have an effective VIP-program for your clinic? Are your patients aware of their “status”?
Source: Feeling Superior: The Impact of Loyalty Program Structure on Consumers' Perceptions of Status. ejcr.org/preprints/2009/april/nunes.pdf
PROVEN PSYCHOLOGICAL METHODS
Current data clearly indicates that consumer behavior can be guided by science. As a result, practices should now be combining their creative efforts with proven psychological methods to enhance customer loyalty. By applying the knowledge gained in the research presented in this article, practices will discover more success than ever in facilitating customer decision making and ensuring longtime loyalty.
Dana Jacoby is a senior consultant for BSM Consulting based in Doylestown, PA. Ms. Jacoby has more than 12 years of experience in health care with roles in sales, operations, consulting, and management. At BSM Consulting, Ms. Jacoby has global responsibility for project management, client leadership, and speaking engagements for new and developed markets in the United States, Europe, and Asia. In this role, Ms. Jacoby consults with physicians and health systems in the areas of strategic planning, financial management, operational efficiencies, service line development, and process improvement. Prior to joining BSM Consulting, Ms. Jacoby was involved in change management, operations, equipment sales, and/or product positioning at 30 of the 35 major medical markets across the United States. Additionally, she was responsible for business planning with management, medical staff, and physicians at 17 top-tier hospitals, as ranked by U.S. News and World Report. Ms. Jacoby has been a keynote speaker and subject-matter expert at numerous medical forums, summits, and conferences in the areas of practice efficiencies, staff management, financial benchmarking, and practice operations. Ms. Jacoby graduated from Louisiana State University (Baton Rouge, La.), holds a Master of Management from Tulane University, and a Master of Health Systems from the University of Medicine and Dentistry. She is a Wharton Fellow Inductee from Wharton University.