Patient loyalty is of immense value to healthcare organizations.
But it's also exceedingly difficult to measure and secure. In this executive Q&A, Brian Wynne, VP and General Manager at NRC Health, explores why many organizations struggle to keep healthcare customers coming back and reveals some strategies to help earn customer loyalty.
Note: Responses have been lightly edited for length and clarity.
Question: Are healthcare customers loyal?
Brian Wynne: Speaking to the majority, the short answer is no. When healthcare customers have options, they’ll explore them. And rightfully so.
Individuals switch healthcare providers about as often as wireless customers change cell-phone carriers. Should one feel trapped or unaware of alternative care options, a return customer is likely — but we should not confuse this with loyalty. NRC Health's own Market Insights research has found convenience factors alone are enough to motivate 80 percent of patients to go to a new provider.
This creates a challenge for healthcare organizations that have historically considered convenience to be an internal perk. Organizations must redefine — and redesign — what convenient care looks like for the physical and virtual customer.
Because of this challenge, the rate of changeover is likely to increase. New, nimble players are entering the healthcare marketplace; start-ups and government initiatives aim to enable transparent price-shopping; and quality outcomes are increasingly inclusive of the holistic patient journey. This means patients will have a better idea of the value they can get, which will make them more willing to branch out and find a new provider if their current one disappoints.
Q: Why does this matter? Why is patient loyalty so important?
BW: The attention grabber is what's reflected on health system balance-sheets. It's enormously valuable to retain existing customers. A study from Bain, for example, found that a 5 percent increase in customer loyalty makes any business 25 percent more profitable.
Much of this profit boost comes from realizing a customer's lifetime expenditure. In healthcare, this amounts to $1.4 million per individual, or $4.3 million per family of four.
Loyal customers also decrease the costs of service. Returning patients lead to less time spent on-boarding, fewer redundant tests or screenings, and less time getting up to speed on any individual patient's health status. This can translate to more streamlined and efficient care.
The impact on care quality is even more important. Loyal care isn't just cheaper—it's better, too. When patients stay within one health system, there's less chance for their care needs to slip through the cracks. Miscommunication is kept to a minimum, and continuity of care is preserved. That leads to better patient outcomes and increased satisfaction along the patient journey.
Q: Why do some organizations struggle with patient loyalty?
BW: Loyalty is multi-faceted and complex.
In healthcare, of course, organizations don't want to encourage inappropriate or too-frequent utilization of care services. However, as new health needs arise, health systems would hope that customers elect to see them again. That's why many health systems carefully track their retention rates.
Retention alone, though, does not tell a complete story. Customer churn rates measure consumer behavior effectively, but do not capture customer attitudes or preferences. It's very possible that a customer offers repeat business, without feeling particularly attached to a brand.
It's a phenomenon called spurious loyalty, and the healthcare marketplace is rife with it. A Health Affairs survey found that 13 percent of patients wanted to choose a different provider, but they couldn’t because their health plans restricted their choices. All of these patients might keep coming back to their providers — but you couldn't really call them "loyal."
This spurious loyalty shows why organizations can't rely on strictly behavioral measures. They need to take stock of loyalty’s emotional and attitudinal components as well.
Q: If behavioral metrics don’t work, how can organizations measure loyalty effectively?
BW: It's important to understand that loyalty is about relationships. It stems from feelings of familiarity and trust that are built up over a long period of time.
Of course, an important part of that is providing positive care experiences. Those are necessary — although not sufficient! — for building loyalty with a patient. Measuring patient satisfaction is a reasonable starting point.
Perfecting the live patient encounter is only part of the puzzle. The deeper challenge is to understand how individuals feel about every interaction with a healthcare brand, across the entire continuum of care. This includes ancillary moments like ease of access, appointment setting and managing their bills. It also encompasses more indirect brand exposure, like community engagement and word-of-mouth among friends, family and online social outlets.
Any complete measure of a patient's relationship with a health brand will have to assess these subjective building blocks of loyalty. NRC Health created one way to do this, called the Loyalty Index, which gives healthcare leaders a comprehensive vision for how patients feel about their brand.
Q: Once they measure it, how can organizations improve patient loyalty?
BW: As with anything else an organization hopes to improve, they must commit to the task. "Loyalty" should become part of the lexicon of the entire organization, starting with C-suite leaders. Healthcare organizations need a well-defined set of goals and execution strategy to be able to identify success with building customer loyalty.
Regardless of the specific tactics chosen, prioritizing customer relationships will always carry the day. This means reaching beyond the hospital walls to maximize the potential of every touch-point. Intentional, thoughtful engagement will deliver on brand promise, help define "value" for today's healthcare customer, and ultimately