I must confess that without making any serious effort I have become a member of various loyalty programs and I bet this will be the case with most of you. I earn reward points whenever I use my credit cards, shop at my favourite store, fly my preferred airline or buy books at the corner bookstore chain. I was recently offered membership of another ‘club’, when I opted to purchase medicines for my mother at the local pharmacy, which seems to have suddenly gone a little high tech and dare I suggest become more customer friendly. Loyalty programs are suddenly everywhere.
I believe time has come for healthcare services to embrace the concept of rewarding loyal ‘customers’.
What is a loyalty program?
A loyalty program involves identifying and rewarding ‘loyal’ customers, who keep coming back. Now I know this sounds a little weird in the context of a hospital, where at one level the objective is to ensure that the patient never comes back again. While no hospital wants to see patients coming back, the fact of life is that everyone needs care at different points in our lives.
Why should hospitals devise a loyalty program?
The most important reason for hospitals to consider introducing a loyalty program is to try and maximise its share of healthcare rupee spent by a customer. It is so much easier to retain a customer, who has walked into the hospital than to try and get a new one to walk in. Moreover, hospitals can cross sell services by ensuring that points earned during one episode are consumed on other services during subsequent episodes. The points can also float over family members thus ensuring new customer acquisition. A loyalty program also allows hospitals to stay in touch, with their most valuable customers by frequently communicating with them. The communication can be customised to make it relevant to the users and hospitals can make offers, which the customers will find meaningful. Loyalty Programs can also serve as brand differentiators there by generating favourable brand recall and creating customer pull.
How will a typical program work?
Here is an example, which illustrates my point. My mother underwent a bypass surgery last year. She subsequently suffered from a debilitating chest infection, which prolonged her hospital stay. We spent close to half a million rupees on her surgery and were indeed very happy to get out of the hospital.
Now wouldn’t it be wonderful if the hospital at the time of her discharge gave us a percentage (let us say 5%) of the total bill back as points that we could redeem on using the services of the hospital in the future. Moreover, it can stipulate that these points can be used by any member of our family across any hospital of the chain. The hospital can also keep sending me patient information material regarding my mother’s post operative care, precautions she needs to take, a regular reminder on when she needs to see her cardiologist and offers on let us say Preventive Checks for me. (Family history is an important risk factor in heart disease). This would ensure that the hospital remains in my consideration set and in all likelihood, should the need arise, I would be happy to visit the same hospital again.
How can a loyalty program be established?
Technology today allows hospitals to customise these programs. A smart IT solution is required to function as the backbone of the program. The system must be able to identify patients, calculate points, generate point statements and track redemptions. Trained individuals must run the program with a great deal of common sense, thoughtfulness and attention to detail.
The Business Case
A business case can easily be made for a loyalty program. I have worked on these and know from experience that the numbers look impressive. Once the basic program takes off, layers can be added, which allow for better returns.
While it is great to have a loyalty program underway, it can only succeed if it is taken up as a hospital/organisation wide initiative with buy in and active support from all concerned. A cross-functional team lead by a senior executive must be formed and enough resources must be allocated for the program to be rolled out.
The program must have clearly defined goals and performance of the program must be zealously tracked. Customer feedback must be taken regularly and these inputs should be used to add greater value to the program.
I fervently believe that in this age of innovation hospital loyalty programs if implemented properly can do wonders and add tremendous value to patients and provide better returns to investors.
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