The health care industry in the U.S. is starting to look a lot like retail. Comparison shopping, for example, is becoming the norm. A report from PwC’s Health Research Institute found that 40 percent of American adults in 2015 researched multiple doctors and health systems to find the best price—a 26 percent increase from the year before.
The ‘retailization’ of the industry is in large part driven by empowered patients. New technologies have given health care consumers more options, increasing the expectation for more affordable prices and higher quality of care. Likewise, other industries are ahead of health care when it comes to providing more seamless experiences and competitive prices, further influencing consumer expectations.
Some health care companies are catching on by forming retail strategy councils to better understand the challenges facing the industry and to take advantage of new opportunities.
What are retail strategy councils?
A retail strategy council is a small, cross-disciplinary task force set up to bring retail thinking into a health care organization. A typical retail strategy council is comprised of leaders from digital marketing, strategy (often from the C-suite) and patient experience. This trend is so new, however, that many organizations don’t have a name for it yet.
Why retail strategy councils are becoming the norm in health care
In speaking with industry leaders, some of them Vision Critical customers, I’ve learned what’s driving this trend. Here’s why these councils are becoming more mainstream—and how they’re driving change throughout the industry.
1. Improving the consumer experience
Many insurers and patient care providers are struggling to provide an experience that meets the demands of the empowered health care consumer. Consumers today are no longer satisfied playing a passive role in their health. They want more control over their experience when dealing with health care providers and insurance companies. They want a similar experience to what they might expect from an e-commerce site: quick and painless.
A retail strategy council could help improve patient experience by identifying pain points in the consumer journey. Cross-functional collaboration, for example, could highlight points where the brand promise doesn’t match the actual experience of the consumers. A retail strategy council enables conversations between the patient experience department and the rest of the organization—an important first step to providing a more seamless experience. When complemented with direct feedback from patients, insight from these councils offers an opportunity to evaluate and improve the end-to-end consumer journey.
2. Driving innovation by determining tech trends
Tech-savvy consumers are demanding better apps and platforms. More health care companies, spurred to be customer-centric, are investing time and money in technology. Driving digital transformation in key areas of health care, however, is made complicated by strict regulations and traditional business silos.
By considering the overall patient experience and the evolving needs of consumers, a retail strategy council could help provide a more strategic approach to innovation. In such a council, marketing and strategy experts regularly talk about trends in retail and how those technologies can be adopted in health care. At the same time, the C-suite can provide guidance on regulations and rules that the company needs to adhere to as it pursues new technologies. And because different areas of the business are involved in the council, alignment in the implementation of new technologies is easier to achieve.
3. Adopting marketing strategies for the retail landscape
As health care evolves into a consumer-lead industry, companies need to adjust how they market their products and services. In a world where consumers are actively comparing prices and company reputations, boosting brand awareness and loyalty becomes a necessity. The industry needs to borrow principles from retail marketing to better connect with consumers.
“Touchpoints and messages need to be aligned or it will damage the consumer's trust and loyalty,” writes Kyle Richardson, solutions principal in the consulting firm Slalom, on the health care industry. Companies need to make sure that brand messaging in all marketing touchpoints—from an outdoor ad to the company’s website—speak the same language.
Companies also need to examine their marketing practices from the perspective of the end-to-end patient experience. Empowered consumers won’t tolerate inconsistencies between the company’s marketing messages and their actual experience.
By enabling partnerships between different stakeholders, a retail strategy council could help sharpen a company’s marketing messaging and ensure that it resonates in the retail landscape. Marketing leaders who are part of the council can propose and get ideas on how to make prices more competitive while also boosting value for consumers. More importantly, enabling cross-functional collaboration will help ensure that a health care company’s marketing strategy aligns with the expectations of consumers—elevating customer loyalty in the process.
Bringing a retail mentality into health care
When done right, a retail strategy council allows health care companies to improve the patient experience, drive technological innovation and enhance brand loyalty. At the same time, however, companies shouldn’t lose sight of the fact that consumers now drive the business agenda in health care. That’s why, when creating a retail strategy council, companies should also ensure that the voice of the consumers and patients is captured and considered. As the industry’s retailization persists, health care companies should enable cross-functional collaboration and inject consumer feedback into their business processes and decisions.