Saturday, October 9, 2010

What/Who Constitutes Your Market?

The obvious answer is "patients". We provide services and in some instances products for patients. We receive compensation for doing this. It's instructive to ponder the source of these patients. How do they get to us? What other people and institutions play a role in this process. Existing satisfied customers? Other physicians? Hospitals? Health plans? Other institutions? Tracing the sources is a critical exercise if we are to become and remain successful, i.e. enjoy a continuous flow of business in our direction.

So part of maintaining this flow is keeping existing patients and acquiring new ones. Remember that quality alone rarely provides a signifcant competitive differential advantage, usually because your competitors are typically equally qualified. Cost factors are potentially relevant for specialized areas such as cosmetic procedures, but most often for the majority of physicians is removed from the marketing equation by the egalitarian nature of insurance contracts. Yes, it's service that comes to the forefront. In some cases that's relationships with referring colleagues, in others it's prompt and courteous attention to patients, patient access to their records electronically, etc.

How do we know if we're employing and delivering a successful strategy for at least maintaining, if not gaining market share? How do we know if our efforts are working? As with most questions like this, it requires data. We need to define the quantity of purchasers available to us, identify the market's potential for use of our services/products, and then we can assess what share of that our business is doing.

Is it true that "if you are not growing your business's market share, you are shrinking"? Certainly in a growing market, that's mathematically correct. If there is demand for the service or product you provide but you fail to meet that demand, others will step in to fill the void.

This evaluative process informs our expansion decisions. When to hire a new partner, add a nurse or nurse practitioner, look for additive revenue sources. It truly is difficult to manage what you have not measured.