Loyalty Rules: A Book Report

Loyalty Rules: A Book Review

Overview

Although the term marketing was first coined in 1910 referring in a contemporary sense to sales, the United States marketing era began approximately around 1950. It was much later before we noted the evolution of marketing in healthcare. Marketing in healthcare began to blossom in the 1970's and 1980's; before this time marketing in healthcare was associated with negative connotations such as inappropriate and unethical1. Regardless of the specific area of marketing, the goals of marketing are essentially the same: to identify the customer, satisfy the customer and to retain the customer. According to Thomas (2010), marketing has progressed through three distinct phases. Before the 1950's, many companies focused on production orientation which emphasized producing as much as possible of a given product or service; production orientation's profit driver was focused on production methods. In phase-one of the evolution of marketing, marketing focused on consumer goods and services or products. Consumers had to be made aware of the new as well as existing products because of the emerging competition; product orientation's profit driver is focused on the quality of a product. Phase-two of the marketing evolution is focused on sales; the profit driver related to sales orientation is primarily focused on selling methods. The final phase of the marketing evolution, stage three, is directed towards the customer. This phase gives rise to the term of market orientation; needs and wants of customers drive profit in this phase. Market Orientation in part is getting to know the market from a customer's point of view; figuring out what the customer wants and needs then tailoring a strategy around those needs. As we precede in our review of the book Loyalty Rules, market orientation and consumer loyalty will become the underpinning of our discussion. Although Frederick Reichheld spoke about many significant thoughts and applications, there were three broad thought processes that were of particular value in his material: customer loyalty, employee loyalty and partner loyalty.

Consumer Loyalty

In a time period where many American entities are struggling economically and many companies are financially challenged, they will have to depend on more than their old reward systems if they are to ensure sustainability. Reichheld (2001), believes that consumer loyalty and I concur is in part the basis to ensure an economic advantage when an organization is going through its most dire financial pitfalls or faced with increasing competition. In healthcare today, this is particularly true because payors are increasing the criteria to pay out benefits, many healthcare entities are increasing their service lines resulting in increasing competition and the uninsured rate is increasing. In the past in healthcare, we could count on our consumers using our facilities "just because". Today, we can acquire new customers but will they continue to use our services; acquiring new customers and retaining our old customers is the way that we can ensure sustainability. If this statement is a fact, our focus should definitely shift to assessing our current customers' needs and insuring that we market to these needs. Metrics are very important in this process so that we can keep up with all of the current trends and needs as they are measured. Loyalty is a two-way communication tool; it is good to sustain loyal customers but we must also be willing to be loyal to our customers.

There are many ways to increase customer loyal in my organization, but two thoughts Recichheld (2001) discussed were front-line staff and an electronic feedback system. First, our front-line staff is in the closes proximity with our external customers; they can have one of the largest influences on customer satisfaction. This is an area that needs to be assessed, nurtured and measured on a continuous basis. Second, we could strategically place electronic feedback systems throughout the facility. They could be easy to use touch screen devices that would be available to all patrons. These devises could offer extensive information about the customer experience. Remember this is the age of electronics and if it is easy to use, more patrons are likely to engage in it. One of the largest barriers to overcome successful implementation of these ideas is cultural change. The culture in healthcare needs to slightly shift from the "top-heavy" thinking to a holistic culture embracing every single person as an intricate partner of the team. For example, many of the front-line personnel are in the best position to increase HCAHPS scores and