- By Justice
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- On 22 Jun | '2015
How Emphasizing Patient Retention Assists Medical Practices
An Overview of Acquisition Versus Retention
In “Retention vs. Acquisition: The Power of Patient Relationships,” Kathy Roy Gaughran shares insights into promoting medical practices effectively. She serves as the Senior Marketing Strategist at Healthcare Success Strategies. Her advice helps medical practices generate more revenues. In her article, she suggests some helpful tips for focusing physician marketing efforts to enhance profits.
Retention Assists Medical Practices
Ms. Gaughran maintains that physicians enjoy greater profitability for their medical practices by focusing most of their efforts on retaining existing clients and marketing services to them. She argues that retention rather than new client acquisition offers physicians a more cost-effective course of action in most cases. Her position reflects the growing importance of relationship marketing concepts in modern practice management. Indeed, she draws her conclusions from observing current retail marketing trends.
Two Ways to Develop a Medical Practice
Of course, Ms. Gaughran does not suggest that physicians should stop seeking new patients. She notes that both acquisition of new customers and retention of existing patients matter as ways to expand the revenues of any medical practice. However, she believes the evidence clearly supports “internal marketing” to the current client base as more lucrative over the long term, in most cases.
A Lesson From Retailers
She believes that the experience of many retailers offers valuable assistance to people marketing medical practices. For instance, she notes that studies have shown that just increasing customer retention by 5% leads to a 95% greater profitability in numerous retail settings. This result occurs in part because businesses must expend less money to retain the loyalty of an existing customer than to obtain additional patrons. This consideration translated into a medical environment implies that physicians should consider their professional relationship with their patient base as very vital, she argues.
A Clear Retail Example
Another clear example of the power of marketing from a retention (versus an acquisition) standpoint emerges in the way publishers promote magazine subscriptions. Ms. Gaughran illustrates a typical approach. A company may expend considerable resources endeavoring to persuade an existing subscriber to extend a magazine subscription for several years into the future. Sometimes sellers even offer attractive gifts as premiums to encourage their existing customers to take this step and become long term patrons.
The Power of Internal Retail Marketing
She notes that many people will choose to sign up for a multi-year magazine subscription, attracted by a gift offer. This form of “internal marketing” permits the company to transform a good customer into an excellent, dedicated and long term one. It fosters the development of a business relationship over the course of years.
Patient Retention Helps Practice Revenues
Just as magazine publishers may benefit from developing customer relationships for long periods of time, medical practices can also enhance their bottom lines by working to retain patients. She believes that patient retention clearly “trumps” the cultivation of new clients from a business standpoint. Why? Because the process of developing a new customer costs between six to seven times as much as simply retaining a satisfied existing patron.
Four Reasons to Emphasize Internal Marketing
Physicians gain four distinct advantages by stressing internal marketing efforts within a medical practice. These include:
• Existing patients will be more ready to invest in additional services;
• They often furnish referrals to physicians;
• It is not necessary to spend money to recruit existing patients;
• Their trust in their physician makes them more inclined to accept additional new services.
Physician Comfort Zones
Ms. Gaughran observes that many physicians discover they personally prefer internal marketing over recruiting new patients. It may prove easier for a doctor to discuss additional services and other options with existing patients, people they already know. Since a relationship of trust and mutual respect already exists, the physician does not face as many initial barriers to presenting details about the availability of additional medical services, for instance.
Don’t Overlook Acquiring New Patients
The need to stress internal marketing does not mean that a medical practice should overlook the development of new patients, however. This activity also represents an important way to grow a professional practice. Yet she suggests that new client acquisition should not become the sole marketing function of a professional practice. Everyone in the practice should work to retain existing clients.
Advantages of Existing Relationship Marketing
Ms. Gaughran suggests that simply redirecting the focus of medical practice marketing from developing new patients to retaining existing ones holds potentially lucrative benefits for physicians. This paradigm shift can greatly assist a practice over a longer period of time. Existing patients who already visit a medical office usually respond favorably to internal marketing strategies and help the practice thrive.
Article provided by Neches FCU, an Equal Employment Opportunity Employer.
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