Customer Loyalty
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Business Matters
Customer Loyalty
By Joe M. Inguanzo
It’s the key to hospitals’ survival in tough economic times
Economic and business consultants advocate complicated strategies
to help health care weather lean times. Reducing staff, adjusting payer
mixes and holding off on capital improvement projects can help during
a short-term cash flow crisis. In the long run, however, these
strategies usually don’t create long-term financial solutions or
sustainability. One far less painful strategy that does work is placing a
focus on customer loyalty. Loyalty is the key to hospitals’ survival in
uncertain times.
Over the last 25 years, an average 80 percent of consumers have consistently laid claim to a hospital they
would call their “own.” More than half of the top 10 reasons consumers prefer a certain hospital center on
some form of loyalty: they have always gone there; there is a strong perception of personalized care; a
doctor recommended the hospital; perceptions of overall reputation are positive; they or a friend or relative
works there; patients’ experiences with staff were memorable.
Loyalty and the impact it plays on health care isn’t new. While hospitals can’t change their location to
become closer to patients’ homes, they can ensure that all consumers who live close to them are “their”
patients. Patients who had an excellent experience at your hospital are more likely to return for future
services and to promote the hospital to others. Doctors who are loyal to your organization admit more
patients there, and loyal employees enthusiastically recommend your hospital to others.
Consumers are well-educated about their local health care, or at least they think they are. More consumers
today believe they know which area hospital provides the best care for particular services than was found
25 years ago.
Today’s savvy consumers still seek the opinions of friends, family and physicians for their health care
services, but they have branched out beyond these sources to find information on the Internet, through
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Customer Loyalty
advertising and myriad other means, such as social networking. Consumers today have more information
sources at their disposal than at any other time in history.
Interestingly, one source they aren’t using to the extent intended is the federal government’s Hospital
Compare Web site. It may be that consumers find Hospital Compare and its consumer assessment data—
HCAHPS—tiresome. After all, mere numbers on a computer screen aren’t as meaningful as the real-life
experiences of family and friends. Consumers are much more likely to listen to and place faith in loyalists’
stories of excellent experiences than they are to navigate a government Web site.
More than ever before, it is certain that without a strong contingency of loyal patients, your hospital’s
financial health will suffer. Even when gas prices are high, loyal consumers will travel across town to use a
preferred hospital.
It is fair to say that loyal customers are the only constant in today’s rapidly changing health care
environment. And, when every dollar counts, keeping loyal customers in your court is a sound strategy that
can be taken to the bank.
Joe M. Inguanzo, Ph.D., is president and CEO of Professional Research Consultants Inc.
You can contact our guest author at [email protected].
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