New patients are the lifeblood of every practice. Without a steady flow of new customers your patient base will shrink and this will lead to reduced practice income and profitability. So a key factor in both maintaining and developing a successful practice is to have an effective way of attracting new patients.
Not so long ago most opticians, especially independent practitioners, relied on their reputation and location to produce a regular supply of new patients. Personal recommendation by existing patients was seen as the most effective, and most professionally acceptable, form of practice promotion. The public also tended to be more loyal, so there wasn't a need to spend a lot of effort and money on attracting new customers. Even a new start-up practice could expect to acquire a sufficient number of new patients to become profitable within two years.
But over the last 15 years the optical market has become far more competitive. The multiple and franchise groups have expanded by attracting new patients through aggressive marketing, often using special offers. There has also been an increase in the number of practices and in the propensity of many patients (especially younger ones) to shop around.
As a result, most practices now need to recruit more new patients just to stand still and maintain the size of their customer base. This article will therefore look at several important marketing methods for attracting and retaining new patients.
ADVERTISING
Probably the first technique that springs to mind is advertising. After all, this is the approach that has been adopted by the major multiple groups, in particular Specsavers, with considerable success. Advertising appears to offer two important advantages over other marketing tools:
It gives you a totally controllable message. Unlike PR and personal recommendation, for example, advertising enables you to determine exactly how, where and when your message reaches its target audience. You decide what the advert says, in what medium it is transmitted, and when it appears. This means you can plan a campaign to attract new patients according to your practice's needs, profile and budget.
You can obtain widespread coverage at a relatively low cost per individual contact. Advertising is a form of mass communication which enables you to inform many potential patients about your practice at the same time. It has been likened to a 'shotgun' method of communication, whereas direct mail is more like a 'rifle shot' approach.
Advertising in the local press is the most popular option for independent practices. This is because the paper's circulation covers the practice's patient catchment area and the cost generally seems affordable. Rates, of course, vary according to the paper's circulation and the advert size. Advertising is cheapest in the free circulation press and more expensive in paid-for papers. A single advert of 15cm x 2 columns width can cost anything from 100 to 600.
Choosing the lowest cost local press is not usually advisable. Although free newspapers often have a high circulation, this does not mean they have good readership figures. Many free papers are thrown away on receipt or are never read. It is usually more cost-effective to advertise in the paid-for press, even though the rates are higher, because the readership is better.
TV advertising is an unrealistic option for most practices because of its high cost and large geographical coverage (and therefore wastage) outside of the practice's patient catchment area. However, local radio advertising is worth considering because the cost is much lower and the coverage areas are smaller.
Most radio stations offer small businesses a complete service which includes both advert creation and airtime. Again costs vary considerably, especially according to the time of day when the advertising is broadcast. The most expensive periods are from 7am to 9am in the morning and 5pm to 7pm in the evening, because that is when most people listen to the radio.
Radio stations will also advise you on how many spots your advertising campaign should have each day over a set period of time to achieve a certain impact. For example, a typical campaign might involve a 20-second advert broadcast 192 times over a four-week period. This could reach up to 60 per cent of adults in an area of 250,000, with each person having nine opportunities to hear the advert. The cost of such a campaign is likely to be between 3,000 and 5,000.
Although local advertising is feasible for most opticians, research by optical consultancy Insight Marketing has found that many practitioners believe their advertising does not produce the results expected and is therefore a waste of money. They could be right, but for the wrong reasons.
One of the main problems associated with marketing in general and advertising in particular is that of measuring and understanding its impact. As Lord Lever, boss of what later became Unilever, famously said: 'I know that half my advertising is wasted. The trouble is I don't know which half.'
Another problem is having unrealistic expectations of what advertising can achieve as far as attracting new patients is concerned. This is because most practitioners do not know how advertising actually works to influence the behaviour of consumers.
Research by the London Business School has found that advertising can create awareness of a new product or service, and even lead to a trial purchase or visit. But its main function is to reinforce existing attitudes and behaviour among consumers. In other words, to maintain and improve existing loyalty to a product, brand or shop. This means your existing patients are more likely to notice, and be influenced by, your practice's advertising than are prospective patients.
The implications of this research are that you need to have a very strong advertising message, constantly repeated over a long period of time, to stand much chance of attracting many new patients to your practice. This means you will also need to spend a lot of money before you see any results, even though the cost of one advertising spot is quite affordable on its own.
So running a short local advertising campaign is unlikely to have much effect. Especially when you remember that around 40 per cent of the audience receiving your advertising message does not need vision correction anyway. And of the other 60 per cent, only around 2 per cent will be thinking it's time to visit an optician that month. This does not mean that advertising cannot play a useful part in your practice's overall marketing strategy. But you need to be willing to spend heavily to achieve any impact via traditional media.
The internet, on the other hand, is a medium that offers a low-cost advertising opportunity. An increasing number of practices now have their own websites. These tend to be equivalent to an online practice brochure, although some of the more sophisticated websites have a product ordering facility as well.
It is not yet known how effective optical websites are at attracting new patients, but it seems unlikely that many people will trawl the net to find an optician. Most visitors to a website are probably existing patients who have seen the web address on their practice's letterhead. Yet setting up a website is relatively inexpensive and it will have some PR value, so it is worth doing. Most companies these days are expected to have a website.
What about advertising in Yellow Pages, which most practices use? Should you spend a considerable amount of money taking a large box advert or should you go for a single-line entry? Do you know how many new patients Yellow Pages actually generates for your practice?
Nearly three years ago a large-scale patient research programme was carried out by 50 practices belonging to the Independent Marketing Partnership. A total of 6,487 patients returned detailed questionnaires covering a wide range of customer satisfaction issues, including what first prompted them to choose a particular practice.
Only 2 per cent of patients cited advertising in Yellow Pages as the reason for visiting a practice. In contrast, 61 per cent said personal recommendation was the main factor in their choice. This suggests that investing a lot on a Yellow Pages box advert is probably a waste of money. Instead it could be better spent on trying to increase the level of personal recommendation from existing patients.
PERSONAL RECOMMENDATION
Word-of-mouth referral is one of the most potent forms of marketing for any business. This is because the recommendation to use a specific company or product comes from someone who is regarded as independent, knowledgeable and trustworthy as far as the potential customer is concerned.
Such personal endorsement becomes even more powerful when the 'recommendor' has personal experience of the firm, but the potential customer does not. By obtaining personal recommendation from a trusted source, potential customers reduce their perception of risk in using an unknown firm, product or service.
Personal endorsement also tends to reinforce the loyalty of the person making the recommendation. Having personally endorsed a firm to a friend, the 'recommendor' has psychologically as well as verbally made a form of commitment. He or she is therefore more likely to continue using that firm in the future.
Not surprisingly, our research also found that a strong correlation between the level of patient satisfaction with a practice and a willingness to recommend it; 83 per cent of patients rated their practice either 'very or extremely good', while 82 per cent said they would be 'very likely or extremely likely' to recommend it to someone else.
There is a significant difference between the number of patients who are willing to recommend a practice (82 per cent) and the number of new patients who choose it because of personal recommendation (61 per cent). This suggests that there is the potential to increase the number of personal recommendations by up to a third.
In order to achieve this potential, you need to understand why a significant proportion of loyal and satisfied patients are not recommending their practice - even though they say they are very likely to do so. The problem is probably a combination of two main factors:
Recommending a practice is obviously not a priority for most people. If asked by a friend, they will respond by suggesting their optician. But they won't be proactive about it.
The vast majority of opticians never even consider asking their patients to recommend their practice. They thus leave their most effective form of marketing to chance.
This lack of an active referral strategy is perfectly understandable. Many people feel uncomfortable about asking for recommendations, especially professionals who are wary about being seen as 'too commercial'. Some practitioners no doubt think it will look pushy to their patients, while others may think it looks like desperation for new business.
Although understandable, research suggests that these concerns are largely misplaced. Being perceived as 'commercial', 'pushy' or 'desperate' is something more in the minds of practitioners than of their patients. There is no evidence that the public objects to being asked for referrals. In fact, the opposite probably applies - over 80 per cent of patients said they would be willing to recommend their practice.
Of course, any 'hard sell' to patients about recommending your practice will be counter-productive. What is needed is a suitable mechanism that helps your existing patients and your staff obtain more new patient referrals without undermining the professional reputation of the practice.
'RECOMMEND-A-FRIEND'
One way to achieve this is to offer a 'recommend-a-friend' programme to existing patients. There are various methods of doing this, but any programme really needs to address three issues if it is to succeed:
It has to give existing patients valid reasons to be more active in recommending your practice to their friends and family. This should include a specific incentive to take action, for example a discount off their next pair of spectacles.
It needs to give prospective patients an incentive to visit your practice, such as a discount, in addition to the personal recommendation.
It has to have a system for patient referrals which is easy to administer and is self financing when implemented.
Here the use of a voucher system is advisable. For example, 'recommend-a-friend' vouchers can be given to your existing patients when they collect their spectacles from your practice. These patients then give the vouchers to their friends. The vouchers entitle those friends to a price reduction on their first pair of complete spectacles when they become your patients.
Redeemed vouchers are then placed with the record cards of those patients who initially introduced their friends. These vouchers also entitle those original patients to receive the same price reduction as their friends when they buy their next pair of spectacles. A
sample of an optical personal recommendation voucher can be downloaded at www.insightmarketing.co.uk.
To achieve the full potential of a recommend-a-friend programme, it's essential that it is communicated in an appropriate and professional way to your patients. This means it should not be aggressively marketed as a means of getting new customers for your practice. Instead it is advisable to present it as a way of thanking your existing patients for their loyalty and personal recommendation.
Obviously people are not going to recommend a practice if their overall experience of it is not satisfactory. This means that all aspects of your service - from eye care through to products, prices and staff - play a fundamental role in obtaining new patients, either directly or indirectly.
PRACTICE IMAGE
The appearance of any practice is critical when it comes to attracting members of the public. A shoddy, old-fashioned front and window display sends out a message of shoddy eye care and out-of-date eyewear (even if the reality inside the practice is different).
Window displays therefore need to be changed regularly, such as every two months, in order to present a fresh and interesting practice image. There are professional window dressers available to do this and display material is often available from leading frame and contact lens suppliers.
As we saw in earlier parts of this series, a more fundamental approach is to have a practice refit. Clearly, because of the significant cost typically involved (50,000 plus), this can only be done every 10 years or so. Nevertheless, providing the new practice image is consistent with its position in the market, a refit can lift sales by 20 per cent or more.
New patients are more likely to be attracted if there is some sort of offer prominently displayed in the practice window. This sales promotion approach is often used by the multiple groups and usually consists of either a discount on the price of spectacles or a two-for-one offer of a free second pair.
While many independent practitioners are reluctant to go down this route - perhaps because they regard it as being too commercial - appropriate sales promotions can be very successful in attracting new customers. How they are used will naturally depend on each practice's profile in the market and its business development strategy.
The use of special offers is also advisable for any practice doing household leaflet drops in their local area. Otherwise known as door-to-door marketing, household drops are another way of reaching prospective patients and encouraging them to make an appointment.
HOUSEHOLD DROPS
The use of household leaflet drops offers several important advantages for any practice wishing to raise its local profile and attract new patients.
You can provide far more information about the benefits of using your practice than is possible in a typical advert. This is important, because the more that prospective patients understand about your practice, the more likely they are to choose it instead of your competitors. The most suitable types of communication are practice newsletters or leaflets specifically designed for door-to-door marketing.
You can specify exactly where you want your leaflet delivered, thereby targeting those types of households (eg containing higher income patients) that you want to attract to your practice. This also means that your marketing expenditure is not wasted on communicating with people outside your practice's catchment area (as local advertising often does).
You can communicate with prospective patients in a very cost-effective way. Household delivery usually costs between 25 and 45 per 1,000 households, which works out at just 2.5p to 4.5p for each home. If you use a properly designed 'stand-alone' leaflet or newsletter, there is also no need for costly envelopes, letters and postage. A household drop usually has a very low 'break-even' point for you to recoup your expenditure. Typically you would only need a response rate of 0.5 per cent before you started to generate extra income for your practice.
A household drop is likely to have more impact than local press advertising, especially if it includes a coupon or special offer to act as an incentive to respond. Adverts are difficult to get noticed in a local paper crammed with advertising. An appropriate leaflet or newsletter, however, is more likely to be seen as it is delivered to the recipient's house.
But how effective is such marketing? Research carried out by BRMB International into consumer attitudes and responses to household leaflet distribution, asked some key questions about its impact. Around half of consumers (52 per cent) said they found leaflets for local companies useful, and a quarter (26 per cent) had visited a retail outlet as a result of receiving household leaflets.
The research also found that a reasonable proportion of leaflets are retained for some time in the household and that retention increases considerably if the leaflet contains a money-off coupon; in this situation, 58 per cent of people say they keep leaflets for a week, and 28 per cent for at least a month.
Of course this research does not mean that every leaflet delivered to households is regarded as useful and is kept by its recipient, nor that it leads to a visit. But it does suggest that a reasonable number of consumers respond to household leaflets in a positive way. This makes door-to-door distribution a worthwhile form of communication with prospective patients, especially given the low break-even point of using such marketing.
LEAFLET DELIVERY
There are several different routes for getting your leaflets delivered to households in your patient catchment area. These are the normal postal system, the Royal Mail door-to-door delivery service, local distribution companies, and free local newspapers.
The post is the most expensive method and is not really necessary providing you have a properly designed leaflet to send out to prospective patients. In addition to the cost of envelopes, postage and collation, there is the cost of renting the names and addresses of targeted households. This means the cost of doing a mail shot is likely to be around 380 per 1,000 households.
The Royal Mail door-to-door service is much cheaper than the normal post - approximately 45 per 1,000 houses. Its main advantage is that your leaflet is delivered with the morning post and is thus more likely to get noticed and read. The Royal Mail will also give you an analysis of your local area by number of households per postcode. The main disadvantages are unhelpful bureaucracy and long waiting periods. There is also a minimum charge of 500, which is equivalent to the delivery cost of 11,000 households.
There are numerous companies offering leaflet distribution and these can be found in Yellow Pages under 'Circular & Sample Distributors'. Their main advantages are that they are cheaper than the Royal Mail (around 25 per 1,000) and they often only need one or two weeks' notice. The disadvantages are that your literature may be delivered with other leaflets, and also that some firms are not very reliable. It is therefore best to choose an established company which is a member of the Direct Marketing Association and which offers verification of delivery.
Most local free newspapers offer a leaflet insert service. Although the cheapest option, this method is not recommended. Leaflets can fall out before and during delivery. It is also questionable how many people actually open these papers and read the inserts.
Regardless of the distribution method used, it's essential that your leaflet or newsletter communicates a strong message that will motivate people to visit your practice. This usually means it should contain some sort of offer to encourage people to respond by a certain date.
It's also essential to consider the frequency of your leaflet drops. Targeting the same local households every six months is probably the minimum necessary to create awareness of your practice and persuade prospective patients to make an appointment.
PUBLIC RELATIONS
Don't forget the value of PR in attracting new patients. Many practitioners already network with GPs, but few use PR in the local press to raise their practice's profile. Editorial coverage of your practice can have a major effect in creating public awareness, largely because it is seen by the prospective patients as being more objective and reliable information than advertising.
Most local papers welcome information providing it is newsworthy and relevant to their readers. Optics is a unique mix of healthcare and fashion - issues that are always of interest to the press and their readers. So an appropriate press release or feature article about your practice and its services are likely to used, provided they are properly written.
This means that it is advisable to use a local PR firm (at least to start with) as it should already have contacts with the press and can devise a programme for your practice. Most PR firms work on a retainer fee basis; daily rates vary but start from around 300. The Chartered Institute for Public Relations can direct you to PR companies in your area.
OTHER METHODS
You can also create public awareness of your practice by more direct means. Consider approaching those local organisations that could use information on eye care because it is relevant to their members. For example, there are opportunities to give talks on sports vision to sports clubs, on kids' eye care to schools, and on VDU regulations and eyewear to firms in your area. And don't forget that some suppliers might be willing to sponsor you or provide advertising support to help you raise your practice's profile.
SETTING A MARKETING BUDGET
So how much should you spend on attracting new patients? The answer depends on what you want to achieve and what are the marketing costs associated with your strategy.
For an established practice an annual investment of 3,000 or 1 per cent of turnover should be sufficient; for a start-up practice you probably need to budget for 25,000 or more. Considerable savings can be made by using an optical support group, such as the Independent Marketing Partnership or Sight Care Services, because the costs of design and printing are spread across several hundred practices.
SUMMARY
This article has looked at the main marketing methods for attracting new patients. Each has its pros and cons, so it is advisable to seek advice from marketing professionals (see 'useful contacts') before spending much money on advertising, household drops and public relations.
It is also important to recognise that simply dipping your toe in the marketing water will not attract many new patients. Marketing works best by repeating a consistent message over a long period of time, so doing a short advertising campaign or a single household drop is unlikely to have much impact. Instead you need to be willing to commit to an ongoing programme of patient communication and make a realistic financial investment.
Graham Hutchison manages practice support group The Independent Marketing Partnership
Part 9 - How to attract new patients