Retention vs. Acquisition: The Power of Patient Relationships
Sometimes, the retail world provides a useful Internal Marketing lesson for doctors or medical practices.
Consider, for example, the considerable “customer retention” effort that we’ve all seen in magazine subscription marketing. At one time or another, you and I have been the target audience, and we know how it goes.
First, an initial subscription to a national magazine is offered at deeply discounted rate (sometimes free). National Geographic, for example, might offer to bundle into the subscription—at no extra cost—a large, high quality map, a special photo edition, and other swag.
Other publications will lure first time subscribers with “try-us-you’ll-like-us” extras such as a logo-laden travel bag, imprinted water bottle or similar attractive trinkets. And, once you buy into the subscription, the activity level steps up a notch. We are repeatedly offered another cost-saving deal to extend the subscription term to two or three years.
Don’t try this at home…
To be clear, I’m not recommending using these rapid-fire methods in healthcare. But these intensive efforts illustrate how deeply the publishing industry is committed to customer retention. They know that retention trumps acquisition. For one thing, it is six to seven times more expensive to acquire a new customer than it is to retain an existing one. (Think existing patient vs. new patient.)
But here’s the primary motivation. Increasing customer retention by five percent can translate to up to 95 percent greater profitability in the retail world, in part due to the absence of acquisition costs. It’s a bottom-line reminder that relationships that you have with your existing patient base are potentially powerful.
Why your current patients are your best prospects…
Acquiring new patients is an important part of the overall marketing picture. But the Internal Marketing segment has distinct advantages. These include:
- The existing relationship, with a foundation of familiarity and mutual trust, removes barriers to presentation and acceptance;
- Existing customers/patients are more inclined to invest in additional services (beyond their initial commitment);
- Patients can—and often do—refer friends, family and co-workers;
- New patient acquisition costs are zero and leveraging costs are minimal.
Nearly everyone wants to do business with people and organizations that they know and like. What's more, healthcare providers often feel more comfortable talking with, and presenting options to, patients they already know. As a result, those elements that focus on retention, and keeping loyal customers, are far more important, productive (and profitable) than acquisition.
For related reading and more about Internal Marketing, see our previous articles: How to Choose between Internal Marketing or External Advertising, and Practice Culture: What Internal Marketing is Really All About.
