10 Lessons Hospital Marketers Can Learn From Loyalty Marketing

This article originally appeared on AMA.org.

The popularity of retail loyalty programs has exploded in recent years, but hospitals and healthcare organizations have been slow to adopt them — partly because of concerns about patient privacy and HIPAA. But that’s starting to change.

As the value of a well-run loyalty program becomes more evident, hospitals are beginning to test loyalty strategies, most with the goal of anticipating needs and enhancing care delivery to increase patient retention.

A few good reasons to think about hospital marketing from a loyalty perspective:

  • Loyalty programs encourage repeat business. Healthcare is inherently a repeat business. When patients are rewarded for using your system or services, they’re more likely to use them again in the future.
  • You can increase volume by rewarding patients for referring others to your hospital or health system.
  • Patients in your loyalty program will engage with your hospital or health system more, and not just when they’re sick. If you include rewards like discounts on gym memberships or healthy food at local grocery stores, they’ll think about your system in a positive way when they tap into those benefits.

But of course, since it’s healthcare, there are things to watch out for:

  • The lead author in a piece published in JAMA notes that healthcare loyalty programs shouldn’t base rewards only on how frequently patients visit or receive care. It’s better to reward them based on how long they’ve stayed with a particular doctor, or for choosing to receive their care within the hospital or health system’s network. Programs can expand this network to include grocery stores and restaurants that offer healthy-eating programs or menu options.
  • Medicare complicates things. A number of rules around how and what type of incentives can be offered make it tricky to know what you can and can’t do to encourage your Medicare patients to remain in your system or complete a particular plan of care. Your best bet: Hire a marketing agency that understands these rules and knows how to work with them.

So what can hospital marketers learn from loyalty marketing as they work to find the right balance of rewarding patients without intruding on HIPAA laws? Here are five ways hospital marketers can boost patient loyalty.

  1. Prioritize the patient experience. Loyalty programs focus on putting the customer first, which is an approach that’s been historically lacking in healthcare. Disruptor healthcare startups are taking advantage of this and they’re winning market share from traditional providers. Accenture found that half of healthcare consumers would switch providers for better customer service. The net: If your system treats patients well, they’ll remain loyal.
  2. Know the consumer touchpoints where you need to win — specifically cost and convenience. Efforts to improve in these areas must be in place before you can implement loyalty strategies. They don’t have to be perfect, but you have to be working toward improvement and telling your customers what steps you’re taking to make things better.
  3. Show consumers you satisfy not just their specific need, but the general one that drives it. The best loyalty programs focus on satisfying more than one dimension of consumer need. For example, a woman might come to your hospital for a routine mammogram. She doesn’t just need to know she’s cancer-free, she needs to know what resources are in place to help her. She needs to trust that your system will take the best possible care of her, year after year. A loyalty program that rewards routine care will keep her coming back.
  4. Personalization is important. While hospitals have to be careful about how they use the information they have about their patients, it’s still key to personalize communications. This can be as simple as addressing members by their first name in emails and referring to the patient’s last interaction, or thanking them for the specific length of time they’ve been a patient.
  5. Retention is more important than acquisition. It costs a lot more to gain a new customer than to retain an existing one. Strategies like keeping patients apprised of upcoming health needs, offering user-friendly dashboards like MyChart to track health information, and sending personalized follow-up emails encourage patients to stay loyal to your system, and even to bring their families to your hospital when they need care.

As more hospitals and health systems jump on the loyalty bandwagon, you can learn from their efforts to figure out what type of program will best suit your business, and you can run a few experiments. Here are five loyalty ideas you can try.

  1. A hospital rehab facility offers a great place to experiment with a loyalty program. This can include cardiac rehab, orthopedic rehab and more. Patients can be rewarded for activities like completing their exercises at home, showing up for all appointments on time, completing their plan of care, or reading content about their condition.
  2. Focus on one service line that has multiple components. Reward patients for getting all their services in your system. For example, senior care: As we age, we tend to need more health screenings, more frequent checkups and a greater emphasis on overall wellness.
  3. Create a loyalty program for preventive care and wellness visits. Try tactics such as offering consumers reward points for getting yearly checkups and showing up on time for appointments. Offer health-related rewards like discounted gym memberships, gift cards to sports stores or gift cards for healthy grocery purchases.
  4. Microtarget with comorbidities. Comorbidities offer an opportunity to predict future consumer needs. Those with type 2 diabetes are likely to also suffer from hypertension, cardiovascular disease and sleep apnea. Personalized marketing about preventive treatments for those conditions shows you’re thinking holistically.
  5. Create a VIP program (where P is the patient). You could start with a basic program and enroll everyone who uses your services or facility, or you could try a tiered program. Offer benefits such as free parking, gift shop discounts, hospital pharmacy discounts, free health screenings and free seminars on relevant topics. For your most loyal patients, or for those who refer others, you can add rewards such as tickets to social events and local attractions.

Whether your goal is new patient acquisition, retaining current patients, motivating patients to use more of your services or boosting positive perception, loyalty programs can be an investment that rewards your patients and pays off for you.

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