Health Services Marketing 10-11 Discussions

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Topic

Narration

1

Introduction

Welcome to Health Services Marketing. In this lesson, we will discuss personal marketing communications including word of mouth, sales, and direct marketing.

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2

Objectives

Upon completion of this lesson, you will be able to:

Describe the various tools of the marketing mix available to health care providers.

And describe how health care providers can organize their marketing resources, implement their marketing plans, and use control tools to reach their stated goals.

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3

Personal Communication Channels

Personal communication channels involve two or more persons communicating directly with each other face-to-face, person-to-audience, over the telephone, or through e-mail or the Internet. Personal communication channels derive their effectiveness through individualized presentation and immediate feedback. Further distinction can be drawn among advocate, expert and social communication channels.

Advocate channel consist of company salespeople contacting buyers in the target market.

Expert channels consist of independent experts making statements to target buyers

Social channels consist of neighbors, friends, family members, and associates talking to target buyers.

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4

Word of Mouth Marketing

The Word of Mouth Marketing Association defines word of mouth as: The act of consumers providing information to other consumers. Word-of-mouth marketing is considered giving people a reason to talk about your products and services, and making it easier for that conversation to take place. It is the art and science of building active, mutually beneficial consumer-to-consumer and consumer-to-marketer communications.

Word-of-mouth must not be faked by hiring and paying people who pretend they are objective. Attempting to fake word of mouth is unethical and can create a backlash, damage the brand, and tarnish the corporate reputation. The basic elements include:

Educating people about your products and services.

Identifying people most likely to share their opinions.

Providing tools that make it easier to share information.

Studying how, where, and when opinions are being shared.

And listening and responding to supporters, detractors, and neutrals.

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5

Types of Word of Mouth

Word-of-mouth marketing encompasses a range of techniques that encourage and help people to talk to each other about products and services. The following three techniques are recent innovations of particular interest.

Buzz marketing: Using high-profile entertainment or news to get people to talk about your brand.

Viral marketing: Creating entertaining or informative messages that are designed to be passed along in an exponential fashion, often electronically on the Internet or by e-mail.

And brand blogging: Creating blogs, in the spirit of open, transparent communications and sharing information of value that may interest the blog community.

The two chief benefits of developing referrals using word-of-mouth are:

Word-of-mouth sources are convincing: Word of mouth is the only promotion method that is of consumers, by consumers, and for consumers. Not only are satisfied customers repeat buyers, but they are also walking, talking billboards for your business.

Word-of-mouth sources are low cost: Keeping in touch with satisfied customers costs the business relatively little. The business might reciprocate by referring business to the referrer or giving the referrer enhanced service, a discount, or a small gift.

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6

Designing the Sales Force

A direct sales force consists of full or part-time paid employees who work exclusively for the company. This sales force includes inside sales personnel who conduct business from the office using the telephone and receive visits from prospective buyers, and field sales personnel who travel and visit customers.

A contractual sales force consists of manufacturers’ representatives, sales agents, and brokers, who either represent the company exclusively or represent a portfolio of noncompeting companies.

Even large pharmaceutical companies will occasionally use a contractual sales force. Additionally, many organizations such as health insurance companies have alliances with independent, direct-selling insurance agents, brokers, and “producers” who supplement their employed sales force.

Further, hospitals and medical research institutes often employ fundraisers to contact donors and solicit donations, and a number of hospitals employ salespeople to sell administrative and other services to physicians.

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7

Sales-Force Objectives and Strategy

Companies need to define the specific objectives they want their sales force to achieve. Regardless of the selling context, salespeople will have one or more of the following specific tasks to perform:

Prospecting: Identifying qualified potential customers.

Targeting: Deciding how to allocate their time among prospects and customers to maximize sales.

Communicating: Communicating information about the company’s products and services and listening in order to uncover customer needs.

Selling: Approaching, presenting, answering objections, and closing sales.

Servicing: Providing account management services to customers—consulting on problems, rendering technical assistance, arranging financing, and expediting delivery.

Information gathering: Conducting market research, gathering competitive intelligence, and reporting this information to the organization.

And allocating: Deciding which customers will get scarce products during product shortages.

Also, in order to succeed, sales representatives need analytical marketing skills; these skills are especially important at the higher levels of sales management. Further, marketing managers believe that sales forces will be more effective in selling in the long run if they understand the firm’s strategic marketing plan.

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8

Managing the Sales Force

In addition to establishing a productive compensation scheme, effective sales-force management entails paying close attention to recruiting and selecting, training, supervising, motivating and evaluating representatives.

At the heart of a successful sales force is the selection of effective representatives. A marketing approach to hiring salespeople is to ask customers what traits they prefer in a salesperson. Although most customers want honest, reliable, knowledgeable, and helpful reps, determining what traits will actually lead to sales success is a challenge.

Today’s customers expect sales reps to have deep product knowledge, to add ideas to improve the customer’s operations, and to be efficient and reliable. This expectation requires companies to make a much higher investment in sales training. Training often involves a variety of methods: live, in-person training can include simulations, role playing, and sensitivity training, whereas self-paced methods involve audio and video tapes, CD-ROMs and DVDs, and web-based distance learning.

Studies have shown that the best sales reps are those who know how to manage their time effectively. One planning tool, time-and-duty analysis, helps reps understand how they spend their time and how they might increase their productivity. Sales reps spend time planning, traveling, waiting, actually selling, and in administrative tasks. With so many tasks it is important to monitor and improve sales rep productivity.

Motivating sales representatives is difficult because of their stressful work environment. Reps usually work alone during irregular hours, often away from home. Most marketing managers believe that the higher the sales-person’s motivation, the greater the effort and the resulting performance, rewards, and satisfaction.

It is important that management communicates what the sales reps should be doing and motivates them to accomplish it. Good feed-forward requires good feed-back, which means getting regular information from reps to evaluate performance. Information about reps can come from sales reports and through personal observation, customer-initiated communication, company-initiated customer surveys, and conversations with other sales representatives. Many companies require representatives to develop an annual territory marketing plan for developing new accounts and increasing business from existing accounts.

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9

Direct Marketing

Direct marking is using channels to reach and deliver goods and services to customers without using middlemen. These channels include direct mail, catalogs, telemarketing, kiosks, Web sites, television and radio ads, and mobile devices. Direct marketers seek a measurable response—typically a customer order, in which case it is sometimes called direct-order marketing.

Direct marketing benefits customers by allowing them to learn about available products and services without tying up time in meeting with salespeople. Direct marketers can buy mailing list containing the names of almost any market segment; for example, diabetics, overweight people, or hospital chief financial officers.

Personal or face-to-face selling is a form of direct marketing, but direct marketers can also use a number of the other channels we mentioned earlier to reach individual prospects and customers. Major channels of direct marketing in health care is business-to-business, but research institutions like St. Jude Children’s Medical Center use television and other media to solicit donation from consumers.

Telemarketing is the use of the telephone and call centers to attract prospects, sell to existing customers, and provide service by taking orders and answering questions. Companies use call centers for inbound telemarketing and outbound telemarketing.

Telemarketing includes telesales, telecoverage, teleprospecting and customer service and technical support.

The newest channels for direct marketing are electronic. The Internet provides marketers and consumers with opportunities for much greater interaction and individualization. Companies in the past would send standard media without any individualization or opportunity for interaction. Today these companies can send customized content that consumers themselves can further individualize.

Since it is highly accountable and its effects can be easily tracked, interactive marketing offers many unique benefits. Marketers can buy ads on sites that are relevant to their offerings and customers and can place advertising based on contextual keywords from on-line search companies like Google. In that way, the Web can be used to reach people when they have actually started the buying process.

A key challenge is designing a Web site that is attractive on first viewing and interesting enough to encourage repeat visits. In order to be effective, marketers consider the following seven design elements, called the seven Cs:

Context. Layout and design.

Content. Text, pictures, sound, and video the site contains.

Community. How the site enables user-to-user communication.

Customization. The site’s ability to tailor itself to different users or to allow users to personalize the site.

Communication. How the site enables site-to-user, user-to-site, or two-way communication.

Connection. The degree to which the site is linked to other sites.

And commerce. The site’s capabilities to enable commercial transactions.

If a company does an e-mail campaign correctly, it can not only build customer relationships but also reap additional profits. Here are some important guidelines followed by pioneering e-mail marketers.

Give the customer a reason to respond. Organizations should offer powerful incentives for reading e-mail pitches and on-line ads, such as special health topic white papers, survey research results, or access to the organization’s database archive of health information.

Make it easy for customers to unsubscribe. On-line customers should have a positive exit experience. According to a Buston-Marsteller and Roper Starch Worldwide study, the top ten percent of Web users who communicate much more often on-line typically share their views by e-mail with eleven friends when satisfied buy contact seventeen friends when they are dissatisfied.

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10

Check Your Understanding

11

Summary

We have now reached the end of this lesson. Let’s take a look at what we’ve covered.

First, we identified personal communication channels involve two or more persons communicating directly with each other face-to-face, person-to-audience, over the telephone, or through e-mail or the Internet. Personal communication channels derive their effectiveness through individualized presentation and immediate feedback.

Next, we defined word of mouth as The act of consumers providing information to other consumers. Word-of-mouth marketing is considered giving people a reason to talk about your products and services, and making it easier for that conversation to take place. It is the art and science of building active, mutually beneficial consumer-to-consumer and consumer-to-marketer communications.

Then, we identified techniques that are recent innovations in word-of-mouth marketing: Buzz marketing, Viral marketing, and Brand blogging.

Also, we determined that a direct sales force consists of full or part-time paid employees who work exclusively for the company. Meanwhile, a contractual sales force consists of manufacturers’ representatives, sales agents, and brokers, who either represent the company exclusively or represent a portfolio of noncompeting companies.

Then, we learned that in addition to establishing a productive compensation scheme, effective sales-force management entails paying close attention to recruiting and selecting, training, supervising, motivating and evaluating representatives.

Finally, we learned that direct marking is using channels to reach and deliver goods and services to customers without using middlemen. These channels include direct mail, catalogs, telemarketing, kiosks, Web sites, television and radio ads, and mobile devices. Direct marketers seek a measurable response—typically a customer order, in which case it is sometimes called direct-order marketing.

This concludes this lecture.