I began my career in business as far away from patient loyalty as possible.
I worked with burn and churn marketing campaigns before I knew what it was. I was learning everything about customer acquisition and nothing about retention and loyalty but as I developed my skillset I discovered how powerful it is and how much more revenue there often is in repeat business over the long term.
In an industry where returning customers are common, patient loyalty can be easily forgotten. In fact, I sometimes wonder why we don’t talk more about it. Has it become synonymous with upselling, which can feel like a dirty word, especially around things as sensitive and ethical as our health?
Patient loyalty obviously affects our revenue from existing patients but it also affects a whole list of other elements in the business that are less obvious but can make quite a big impact on growth. In this article, we’ll look at some of them and which levers we often have that can affect patient loyalty.
Where patient loyalty impacts startups
When we examine businesses, a healthy sign often is that it’s driven by its returning customers rather than the new ones it acquires, but patient loyalty affects more than just whether a patient comes back for a second appointment.
Repeat business on individual physician consultations and examinations is the obvious example we all are familiar with: we feel sick, have an appointment and later have a follow up appointment.
If we are happy with the experience, we might even come back for another type of care such as dentistry or eye care.
Some health tech businesses have a subscription product, which naturally comes with churn as those things tend to do. The patient’s loyalty can heavily affect that too. Not to mention how focused our industry is on referrals: it’ll also have an effect on that which can be more significant than it might seem at first (more on that in the next chapter).
Recognizing and measuring patient loyalty
Patient loyalty tends to show up in a myriad of ways such as through a high LTV (customer lifetime value), a high ratio of returning to new patients, and referrals.
There is no specific benchmark number in terms of how high one’s customer LTV or ratio between new and returning customers has to be since it depends on the market we are in both in terms of our value proposition and also the type of patients we help.
There’s a natural cycle to how often we see a physician if we don’t have a chronic disease or a specific thing to follow up on, so the product needs to live a certain amount of time in order for us to understand the natural level of returning patients for that service.
I like to look at it through cohort reports. They can feel a bit overwhelming at first if we are not used to them but they aren’t too bad. Basically, we can use them to follow a certain customer group over time to see how they interact with the business. The difference between these and typical monthly reports is that a standard monthly report shows what happened in the business during that month — whether the group of customers was the same or not.
In other words, we can use cohort reports to understand how sticky our product is with our patients.
Here’s an example of a cohort report using random data, courtesy of Supermetrics. In this example, we follow that cohort (group of people) over seven days, and “day 0” in the screenshot is the first day, meaning that we define the cohort by those that had their first examination (assuming we continue the patient loyalty example from before).
Day 1 shows that 4.93% of that group returned to use a service the next day and 2.71% of the group returned again the following day, and so on. Obviously, that isn’t common behavior of patients and this example might be for website visitors (since they are measured daily) but the point is the same since we can replace days with months or quarters in our own report.
Another alternative is using the Net promoter score to indirectly get a sense of the return rate if we don’t have other metrics since someone recommending the care to others may give an indication of whether they would use it again themselves.
The counterintuitive way to attract new patients through patient loyalty
As you’ve probably experienced too, patient referrals are an effective way to get new patients. In fact, it’s perhaps the most effective channel in our industry and so when we acquire a new patient, we are really acquiring several more in invisible referrals or de-attracting the same amount if the word of mouth is negative.
That means patient loyalty has a meaningful impact on patient acquisition. One way to measure this is using a customer NPS score to get a sense of whether our patient loyalty is affecting our new patient acquisition positively or negatively.
For example, if more than half the people in our NPS are detractors and we are running digital campaigns to attract customers, that could have a larger negative effect the bigger our business is. Imagine a patient considering booking an examination via a special offer we have on a digital campaign but before they do, they remember that their friend who has been to that clinic before.
None of us likes to search for the right clinic — we want it to end and move on with our lives but if that friend had a negative experience, we’ll need a pretty good reason to still go to that clinic — it’s almost as if negative experiences for friends count more than positive ones.
Patient loyalty is arguably the first thing we need to take care of as other methods of acquiring new patients will serve as fuel for the fire whether positively or negatively.
If we examine patient loyalty, I’ve noticed these elements making a difference (in no particular order):
- Physician/medical quality
- The clinical facilities and location
- Physician charisma
- Service and hospitality experience
- Pricing
- The service offering and its convenience
- Whether the patient has relatives using the clinic too
Physician/medical quality
This item refers to the quality of the doctors and clinical staff and their training, which I’m sure we all prefer to be of a certain quality so they know what they are doing. This doesn’t need much of an introduction.
The clinical facilities and location
Patient loyalty can be affected by the facilities and location of our clinics as first-time patients that far away tend to be more likely to cancel their appointment out of inconvenience. Since it’s hard to move a clinic, an alternative to consider is how far away one accepts patients from (depending on how full the clinic is due to the potential no-show) and if it might be necessary to add extra reminders, etc. for patients that come from far away.
Physician charisma
This is a surprising one that many of us tend to forget or ignore. The way physicians interact with their patients can make a huge difference in the experience they have, their future loyalty, and even referrals.
Service and hospitality experience
Similar to the individual physician or clinical staff’s ability to interact with patients in the obviously non-natural setting for them, the hospitality and overall customer experience we offer from end to end (even before and after they visit the clinic) can make an impact on patient loyalty. An obvious example of that is the waiting time before or between examinations.
In my research, I found that a part of a good patient experience comes down to the hidden process behind the scenes that makes it easy for the staff to know the customers and their situation at the right time (and act accordingly).
Pricing
Pricing is an obvious factor and in terms of patient loyalty, mostly focuses on which types of patients we want to attract since we need to pay for the cost of care and carry a certain margin. Some patients will prefer to pay more for a certain quality of service while others value paying less and getting less as well.
The service offering and its convenience
Speaking of market segments, there are certain sub-segments that use our services a lot more than normal. In other industries, these customers are sometimes referred to as ‘whales’. I’ve noticed that among patients they might be those with chronic diseases.
Since they may make up a large portion of our examinations and consultations in sheer usage rather than patient volume, they can seem invisible in the data. Tailoring certain services or experiences to their unique needs can help drive patient loyalty in this sub-segment.
Whether the patient has relatives using the clinic too
If patients have relatives or friends that use a certain service, we can all imagine that they might be more likely to go there because of that. Not just the obvious referral for first-time use but the comparison between experiences with people we are close to can help reinforce the loyalty. On the other hand, if someone has a bad experience it can also push in the opposite direction.
Patient loyalty is another way to describe how much a patient likes (and thus returns) to a certain business such as a clinic or hospital. Low patient loyalty is a sign of unhappy patients and a business that isn’t doing well.
There are a number of elements that impact patient loyalty. In this article, we examine some of them such as the patient experience, the physician’s charisma, and the convenience of the location compared to the clinic’s home.
Patient loyalty is important like customer loyalty in any business is important — for most businesses, it is too expensive to depend on continuously acquiring new customers. Patient loyalty gives us an understanding of how happy patients are with our service and if they would come back – which will likely cost us a lot less than paying to acquire a new patient who doesn’t trust us yet.
There are a number of elements that impact patient loyalty. In this article, we examine some of them such as the patient experience, the physician’s charisma, and the convenience of the location compared to the clinic’s home.
Takeaways
- Patient loyalty affects many things within a health startup, several of them being non-obvious
- We can use cohort reports to analyze how loyal our patients are over time
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