Editor’s note: Hale T. Chan is corporate director, marketing, at St. Mary of Nazareth Hospital, Chicago. He has been in marketing and research for nine years and in health care marketing and research for the last five of those years. Chan has an M.B.A. in marketing and economics.

Probably one of the most neglected parts of marketing in today's health care industry is the area of market research. Unlike the more established consumer industries, research too often plays second fiddle to promotions.

Similar to other industries, a baseline research study for a hospital is needed that focuses on the institution's image/reputation in the community, its perceived strengths and weaknesses, how it's positioned against competition, and just as important, how these factors are perceived by the various demographic groups in the community.

This is in response to the marketer saying, "You can't be all things to all people." After this, additional, more program-specific research can be considered. Because most institutions are beginning to realize the need for this type of baseline study and because of the magnitude of such a project, this type of research represents many opportunities for consultants and market research companies to get their foot in the door at some hospitals.

Baseline study

St. Mary of Nazareth Hospital Center in Chicago developed and implemented such a study with the assistance of an outside consulting firm. A direct-mail questionnaire was developed with the standard methodology of following up with postcard reminders to those who did not send the survey back within the specified time.

In order to generate a higher response rate, financial incentives were inserted. A certain percentage of the mailing contained a new dollar bill, some contained a half dollar and the rest a quarter. The result was a higher than-typical return for such a survey but, surprisingly enough, there were no significant differences among the response rates for the different incentives. As a matter of fact, many people returned the completed survey with the money because they felt that since we were a nonprofit institution, we probably needed the money more than they did.

This particular study was also segmented by ethnic groups: Hispanic, Polish and a random group. The highest returns came from the Polish community and the least from the Hispanic community. The Hispanic questionnaire was in Spanish.

The questionnaires were pretested with these separate groups to make sure our ideas came across to the potential respondents without misinterpretations. Significant results were obtained that led to the increased effectiveness of the final product, illustrating that pretests should not be ignored.

Promotional efforts

The findings told us how we were positioned against our competitors, how we were perceived in the community based on geographical and ethnic segments, what services needed more exposure, which medium was common to a particular ethnic group (i.e., which ethnic newspaper was more popular) and a multitude of other factors. This resulted in promotional campaigns targeted for specific ethnic groups in selected areas as well as the lessening of concentration of promotional efforts where the hospital was positioned weakly against certain competition, and vice versa, where the hospital had a competitive advantage. This decision was based on the revelation that it would take more resources to improve a perceived weak position then to reinforce an existing strong one.

After this baseline study usually comes research for specific programs. In our case it was the emergency department (ED). Internally, we knew we had a superior product because of required minimum physician certifications and reputations in this area as well as having the most modern facility in the surrounding communities. But we believed there was room for additional growth.

An outside research firm was contracted for this project. The information we were looking for was similar to the baseline community survey except that it focused on the ED. The telephone survey methodology was used because the number of questions were limited and certain responses would necessitate additional probing. We also needed the assurance of a minimum number of responses for each particular ethnic group in order for the survey sample to be valid.

Strongly positioned

The results pointed out that:

  • We were positioned pretty strongly against local EDs which meant a maintenance promotional campaign in the immediate area was needed.
  • Our presence was not as strong among certain ethnic groups, indicating improvement was needed.
  • Our ED was positioned pretty weakly in some of the peripheral zip codes and because of budget and personnel constraints it was decided to "give up" some of these areas and focus our promotional efforts on selected closer areas.
  • After ascertaining what factors people thought were important in the selection of EDs, we highlighted those factors in our promotional campaigns if they had already existed and attempted to bolster those areas in the ED where we were not as excellent as people expected. Additionally, this survey was used as ammunition to help effect a new program for the ED which would decrease the waiting time for some patients.

The entire promotional strategy for the ED was based on the findings of the research survey.

Another research tool, focus groups, was used to pretest not only the earlier community image survey but also to determine the effectiveness of one of our proposed billboard campaigns. We wanted to be sure the message we wanted to get across was what was being perceived by the community. The resulting information helped to reduce the amount of copy, make changes in the copy itself and to determine the best color combination for maximum attention-getting.

Satellite facilities

Another area in which consultants can assist hospitals is the development of satellite facilities and selecting the best location for them. This is an ongoing project for our hospital.

Patient satisfaction surveys are also common in the health care industry. These surveys can not only help determine the satisfaction levels of the institution's services but can also give the marketing department feedback on its promotional efforts.

Like most institutions, the allocation of money to do research is not always easy. Monies are always needed for other projects. One method to justify the allocation of funds to do research is to compare the cost of doing the research against the total dollars allocated for the entire project. If this ratio is small, then research can be justified. The allocation of this sum now is worth the potential savings later on.

Another method is to forecast the expected utilization of the program to be researched if the research bears out your program thesis. Thus you can determine if the rate of return from this program is adequate for the research and promotional dollars you want allocated to it. Any research firm that can come to the aid of the marketing department with statistical forecast expertise would have an edge over its competition because this would help in "selling" the concept of research for a project, at least to get funds for it. I doubt that most in?house marketing staffs have the necessary statistical/financial expertise.

Many opportunities

There are many opportunities for hospitals and marketing research firms to work together to help hospitals develop more effective planning and promotional strategies.