( By Vivek Shukla )

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Marketing Myopia: The Short Sightedness Of Amateur Businessmen

By Vivek Shukla

Let me share with you the circumstance that prompted me to write this article. Myself and a fellow consultant were sitting in a cafe for a casual meeting when he asked a question, 'What would a 10-bed hospital in a small town do to market itself?' I replied by saying that he would have to do something very unique and very relevant. This led to further discussion on RMPs and offering them 'incentives' to refer patients. No discussion on hospital marketing is complete without talking about kickbacks (monetary incentives for referring patients).

It is common knowledge that offering commission for seeking referrals is unethical and illegal. Nevertheless, the practice is rampant. Most towns in North India have fallen prey to this. What traps doctors is fear. The fear of losing business to the competitors rules their thinking. They would rather share the profit with a RMP, rather than lose the patient to some other doctor.

Many doctors ask me about the ways to a successful practice without having to pay the RMPs for their 'favours'. It indeed seems difficult to the hospital owners to generate enough patients without having to pay commissions. I do not blame the medical fraternity for not being able to think of a better way. I realise that the doctors have not been taught professional marketing strategies in medical colleges. A seasoned business professional would run his company according to the rules of the game. These rules include things like:

  • Segmenting the market
  • Creating a position in the minds of the target segment
  • Differentiating the offer
  • Carrying out brand building campaigns
  • Analysing the value chain and making use of the analysis
  • Keeping a watch on the business environment
  • Keeping an eye on the macro economics
  • Developing its human resources for competitive edge
  • Managing the finances for maximum returns

These are only a few examples of what constitutes strategic running of a business. But I think they are sufficient to drive home the point. My point is that paying commissions is not a smart way of running a business. There are better ways of soliciting clients than playing the tout and pimp game.

There are businesses where commission agents are a vital part of the selling process, like airline ticket sales, car sales, property dealing, etc. The difference there is that everyone knows that commissions will change hands and people are not being manipulated for personal gains. In healthcare industry, however, it can do more harm than good. Not only because it is illegal and unethical but because it is a strategic mistake to offer money in lieu of getting business. Thus, kickbacks are more like shooting yourself in the foot.

The 'noble profession' is a profession of trust and faith. It is like stabbing the client in the back when he is being brought to your OPD in greed for money. You would be far better off, if he comes to you because he trusts your ability rather than being manipulated into seeing you.

I also think that when you are dependent on others for your survival, you will never ever be self-confident and strong. If your bread and butter is in the hands of the RMPs, you will have sleepless nights, sooner or later. They can grab you by the throat and blackmail you anytime. It will happen in the very near future. In fact, it is happening in most of the places already. Some RMPs are already known for shopping around for the 'best deals' before they refer the patient. This particular breed of small time doctors (God knows how many them are actual doctors) know how to exploit the short sightedness of the owners of bigger hospitals and nursing homes.

Not only you are surrendering the control of your future to unforgiving greedy people, you are also giving them a chance of depriving you of your rightful profit. They are robbing you of your margins because they want their share too. Less margin means less profit and thus poor quality of services in the long run.

The fear of losing a patient to the competitor leads to offering of the cut and that leads to the death of all the creativity and value addition in business. If the hospitals compete on the basis of design of their services and their reliability and quality, everyone will benefit. The hospitals can charge premiums for their USPs and the patients will get good quality services in different shapes and sizes. There will be a constant effort to upgrade and improvise the business model on the part of the hospitals. Doctors and staff will constantly enhance their client handling skills apart from their professional skills. That is the ideal way of doing business. Differentiating yourself, upgrading yourself, defining your target market, promoting your organisation through various legal and ethical vehicles are some of the professional ways of doing business.

We should also not forget that this is the age of information. Information reaches even the remote villages with great velocity these days. People are getting educated even as I am writing this article about the subtle games that some RMPs and hospitals play. So, the future of the cut practice is not bright in any case. The earlier the hospital resort to professional handling of their operational and strategic businesses, the better it is.

We must not forget that hospitals have an enormous responsibility towards the society. They are there to serve the people in an ethical way. Let's not have greed and touts ruin this burgeoning industry.

The writer is a healthcare and marketing consultant based at Dharamshala. Email: vivekshukla2002@hotmail.com

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