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Why Doctor Marketing Budgets Are Sometimes Larger Than Hospital Marketing Budgets

By Stewart Gandolf | December 21, 2011

If you were to guess that hospitals always outspend private practices on marketing, you’d be wrong. While it’s true that most doctors spend very little on marketing, that is not always the case.

Our healthcare marketing firm works with many kinds of clients including doctors, hospitals and corporations. In recent years, we have noticed a number of instances where hospitals are being significantly outspent in the marketplace by individual doctors. How can that be?

Simple.

The doctors who invest significantly in marketing are willing to do so because they look at marketing as an investment, not an expense. In other words, these doctors will happily spend $50,000 on marketing to bring in $250,000 in revenue. They are also willing to try a variety of ideas until they find a proven, profitable formula. Finally, they tend to focus on strategies which attract specific types of cases, rather than mere, “feel good” marketing.

Meanwhile, hospitals usually have a variety of stakeholders with different and sometimes competing objectives. While some executives at a given hospital may look at marketing with a similar return-on-investment philosophy, others may argue that marketing is “expensive,” “ineffective,” a “waste of resources,” or even, “beneath us.”

In instances like these, the “marketing-savvy” Davids can handily take lucrative cases from the unwitting Goliaths, without their even knowing it.

I realize that hospital and medical practice politics are complex, but be forewarned: sometimes the little (but business smart) guys win.

 

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Topics: Uncategorized | 1 Comment »

Stupid Administrative Tricks That Drive Away Patients

By Stewart Gandolf | November 30, 2011

At a recent seminar, some of our attendees joined us in a rant about the pitiful customer service endemic at so many hospitals and practices. Some examples:

1. One surgeon shared a story about the time he “went home for Christmas,” but ended up accompanying his very ill and nervous mother to the ER. A staffer called out her name across the room while twirling a clipboard nonchalantly on his finger. Next, the same staffer became noticeably impatient while “mum” slowly gathered her things.

2. An administrator bemoaned her visit to her own OB/GYN, and had to wait while the receptionist giggled on a long personal call.

3. I personally had to ask a lab tech to disinfect and wipe blood off the phlebotomy chair, before I would allow her to draw some of my own.

Everyone has stories like these.

Beyond the HIPAA violations, safety hazards and insulting behavior, these kinds of incidents illustrate an alarming indifference to patients who ate after all, customers.

However, you can’t just blame “bad employees.” Even well-meaning doctors and administrators often design their internal processes around what is efficient for the institution, as opposed to what is right for the patient. For example, think of all those complicated phone trees where, “Sorry, zero is not an option.”

Another example, my mother scheduled an early morning appointment with her cardiologist. He strolled in an hour late to his own office, and then had no idea why she was there (she had spent the weekend at the hospital). He actually admitted that he lets patients stack up so that HE doesn’t ever have to wait.

This kind of indifference is amazing, and almost impossible to find in any other industry. I told my mother we should leave after the twenty minute mark, but she is old school and simply wouldn’t go.  (But she DOES tell her friends about the incident.)

Here’s the news flash: younger upscale patients – the ones you say you want – don’t just “quietly suck it up.” Instead, they increasingly rebel. These patients are not intimidated, recognize that they are in fact a customer, and demand to be treated with respect and dignity.

So take some time to look at your own systems to find out which ones are “patient friendly,” and which ones treat patients like cogs on an assembly line designed for optimal organizational efficiency.

Or if you prefer, do nothing. Life will be so much easier when those pesky patients stop “bothering you.”

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Marketing Lessons From My Favorite Neurobiology Professor

By Stewart Gandolf | October 4, 2011

As Associate Dean of Neurobiology at University of California, Irvine, my good friend Dr. Michael Leon knows a great deal about how the brain works. What’s more, he is as fascinated with marketing’s impact on human behavior as I am.

After a long, fun conversation the other day about taking smart marketing risks, he sent me an email that I think you will find both interesting and useful.

“I don’t know why, but I love this kind of thing. You may also be able to get some mileage out of the story about how Orange County, California, got its name. When it split from LA county, there were many suggestions about what to name to the new county, including Hog County, because there were many grown here. Finally, to evoke the idea that it had a Mediterranean climate, someone suggested that it be called Orange County.

Oranges at that time were a rare commodity that were often given as Christmas presents. The problem was, no orange had ever been grown in the area.

AFTER they named it Orange County, they imported some orange trees from Florida but they all died (the juice oranges needed the plentiful rain that comes down in Florida).

Finally, they tried navel orange trees and the county was soon covered with them. Perhaps the moral is that sometimes you have to have enough confidence in doing something like marketing, even if you’re not sure of the outcome. The ones with the confidence eventually figure it out.”

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The First Step To Dealing With Our “New Normal” Is Acceptance

By Stewart Gandolf | September 30, 2011

Another recession is “unavoidable” according to an article today by Yahoo! Finance. Lakshman Achuthan, co-founder of the Economic Cycle Research Institute (ECRI) went on to elaborate, “You haven’t seen anything yet. It’s going to get a lot worse.”

These comments are significant for two reasons: 1. the whole point of the ECRI is to identify whether or not we are in a recession, and 2. only a month ago Acuthan said the “jury is still out.”

Now, apparently, the jury has returned and the verdict is “guilty.”

Many people would argue that the “old recession” never ended – that this “new recession” is not a double dip but rather the continuation of a very long recession. (Achuthan disputes that.)

Of course, the “Great Recession” was vehemently denied by our government and the media for over a year, until finally in December 2008 the widespread financial panic made further denial impossible. But just four months later, Bernanke already began talking about “green shoots.” Then, in September 2010, the recession was declared to have been over since June 2009!

Talk about the Emperor wearing no clothes!

I have lived through a number of recessions in my lifetime, and I can say with absolute certainty that this recession (oh excuse me, the LAST recession) was the most denied recession I have experienced.

But frankly, the debate of whether we are entering a “double dip” or that the “Great Recession” never ended misses the point.

The fact is, we are now in a “new normal.”

Most people think 2007 was normal, and we just need to get back there.

The trouble is, 2007 was NOT normal. It was a crack high.

The economy was funded by an insane real estate Ponzi Scheme. As real estate values soared, lots of people got rich, and far more THOUGHT they were rich.

Two examples from my own little world:

1. A friend’s cleaning lady asked him for advice about what to do with her THREE investment condos that were all under water. Now I am all for the Great American Dream, but I am not sure a cleaning lady earning $12 an hour should be investing in three condos.

2. A house in my neighborhood was purchased as a rental by a cocky twenty-something sub-prime mortgage broker who drove around in a Bentley. I remember thinking, “Uh oh, this isn’t going to last.” Sure enough, when the music stopped a few months later he lost both the house and the Bentley. He mistook being at the right place at the right time for his own financial genius.

These little anecdotes were repeated across the USA countless times. I am sure you have stories like these too.

But the hangover from a crack binge isn’t the whole story.

While the media rightly talks about the real estate fiasco as a cause of the recession, very few people connect the dots about the larger, structural changes that are taking place at the same time.

As baby boomers age, they will spend much less on big houses and big cars. Younger consumers are both fewer in number and poorer. As someone wrote awhile back, “Who is going to buy and furnish all these 4,000 s.f. mini mansions?” (Harry Dent has been writing about the economic impact of demographics for years.)

Meanwhile, while almost everyone acknowledges demographics make Medicare and Social Security unsustainable in the long run, virtually no one has the political will to do much about it. Just yesterday I saw a commercial from AARP extolling us to protect Social Security and Medicare – which would be great except that we cannot afford to keep funding these” birthrights” like we have in the past.

As if that weren’t enough, official unemployment figures remain close to 10%, and the hard truth is that a lot of jobs aren’t coming back. Culprits include:

1. Many high-paying manufacturing jobs have disappeared overseas, replaced by lower cost workers.

2. Now that many of today’s unemployed have become chronically unemployed, their skills are out of date.

3. In a world where high tech is the future, we are graduating far too few engineers and scientists.

Then on top of all that we have crushing domestic debt, financial crises in Europe and ongoing consumer malaise.

I could go on, but the bigger question is, “What should we do?”

I would argue that it is time to get past the earlier Kübler-Ross stages (denial, anger, bargaining, depression) and finally get straight to “acceptance.”

Only from a perspective of reality will we finally make the necessary decisions we have been putting off.

I remember reading a book by Robert Ringer  in the 1970′s that sums it up nicely:

“Reality isn’t the way you wish things to be, or the way they appear to be, but the way they actually are. You either acknowledge reality and use it to your benefit, or it will automatically work against you.”

So going forward, I advocate preparing for ongoing economic problems and staying flexible in your approach.

I am a Partner in a medical advertising agency, and I think it is a good case study.

Through most of 2008, we (like a lot of companies) had strong sales.

When the bottom fell out in 2009, the phone almost stopped ringing. The doctors, hospitals and manufacturers we serve either froze or panicked. It was really amazing that demand could drop by almost 50% so quickly.

We survived those tough times, though, because our company is “new economy” based. Due to technology, we have very little overhead and most of our costs are variable. When demand slowed, we cut expenses and our costs shrank almost proportionately.

(I cannot tell you how happy I am that we didn’t have all the expenses of a traditional ad agency during that time.)

When the phone started ringing again in 2010, we didn’t see any “green shoots.”

No one was calling because they were optimistic about the economy. Rather, prospective clients told us they simply couldn’t wait any longer for things to get better.

(To this day, I cannot think of a single client who has told us he or she wants to market in order to take advantage of the “better economy.”)

Today, my company is receiving new opportunities from every direction. This is in fact the most exciting time of my professional career.

But despite all the good things that are happening for our team, I still “hope for the best, but prepare for the worst.”

There are fundamental changes going on in the economy (and in healthcare for that matter), and things are going to limp along for a LONG time.

So your job is to accept and deal with that fact.

Let’s rethink, restructure, rebuild, be flexible and especially prepare for our “new normal.”

 

 

 

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Topics: Uncategorized | 10 Comments »

Playing High Stakes Poker is Easy. Winning is Hard.

By Stewart Gandolf | August 31, 2011

One of the analogies I shared with an audience earlier this week resonated with the crowd so well that I decided to share it in today’s blog post. (Those of you who know me personally or have seen me speak know I LOVE using analogies to simplify concepts.)

First, the back story.

After listening intently to the speaker preceding me, an exasperated attendee spoke up:

“Maybe I just am not smart enough, but I have been spending thousands of dollars on this Internet marketing and getting nowhere. Today, after listening to all of these details, it turns out to be even more complicated than I previously thought. Can’t you just do this for us?”

While a cynic would assume his comment was an unsurprising payoff to the vendor/speaker’s evil plan, I can vouch that the speaker was both clear and informative. What’s more, she was definitely not “salesy” in her presentation.

I chimed in when it was my turn to speak.

“Playing high stakes poker is easy. Winning is hard.”

After receiving more than one quizzical look from the audience, I went on to explain my point.

The fact is, many forms of marketing are deceptively simple in concept, but difficult to execute well, especially in a competitive environment.

Now the preceding session was about pay-per-click advertising, and it illustrates my larger point well. (Though this story applies to almost any form of marketing.)

These days almost everyone wants to be at the top of Google. While it can take many months or even years to work your way up the pile organically with search engine optimization (free search), pay-per-click offers advertisers the ability to leap to the top of the search engine results page within minutes.

The trouble is, pay-per-click advertising is such an obvious, popular strategy that the marketplace  often becomes overly competitive. When that happens, bid rates skyrocket for everyone. Experts (and their clients) can still win, but the amateurs are guaranteed to lose. The truly “dumb money” crowd can lose a bundle very, very fast.

Hence the poker analogy.

You can learn to play poker in an evening, but that doesn’t mean you should naively join the high stakes table. Poker has many nuances and requires lots of experience and a very deep understanding of the game. As you would expect, the expert players love it when amateurs try to lock horns with the them.

I speak from experience. I once knew a professional high stakes poker player who was so good that he sometimes would win over a million dollars in a single night from the otherwise smart and successful people who thought they could beat him.

Pay-per-click advertising is similar to poker in that you can open an account with Google and get started in about an hour. That’s where the trouble usually begins.

Many people start with a budget so small (say $200 a month) that their ads generate almost no traffic. Others go out and spend a lot and lose it all. Either way, their results are usually so poor that they give up prematurely.

Their failures are understandable when you consider the number of variables.

What should the ads say, what pages of the website should you send visitors to, what is the offer, how are you going to trap off inquiries, what time of day should the ads run, which days of the week, what geography, which keywords, how much should you bid per keyword, what is your maximum monthly budget, which keywords should you exclude, should you use “broad match,” “phrase match,” or “exact match,” which keywords yield better qualified inquries, how are you going to analyze the data as it comes in, should you consider content, display or text, etc?

So our seminar attendee didn’t lose money because he is stupid (he is actually very smart). He simply never had a chance because he was playing a sophisticated, complex game that seemed simple until he was actually playing (and losing money).

But the real tragedy is, our attendee could have hired an agency at a reasonable rate to create the strategy, do all the work, run the testing and optimize results. It just doesn’t make financial sense to take the risk and spend the time to try and go it alone. Instead of losing his budget, he could have made a lot of money.

(In case you are wondering, I am not “hinting” for you to use our firm. While we do a ton of Internet marketing, there are lots of other people out there you can talk to as well, including the aforementioned speaker.)

There is no reason for you to blow a bunch of cash with hit-and-miss marketing. Find someone qualified to help you.

By the way, if you decide to ignore my advice, be aware that your savviest competitors DO have qualified people helping THEM.

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Is It True That 0nly “Bad Doctors” Market?

By Stewart Gandolf | July 31, 2011

The managing partner of a large, respected group called me recently to find out if my firm could help them answer a rising competitive threat and build volume for their associates. The trouble was, he was very guarded and hesitant.

After a lot of coaxing, he finally blurted out the real reason behind his reservations.

“But don’t only bad doctors have to market?”

Since I have heard countless variations of this theme for years, I thought I would set the record straight in today’s post.

1. Marketing is not the same thing as advertising. Everyone in business markets, whether they know it or not, and whether they are good at it or not. Marketing includes your customer service, how you communicate with referring doctors, how you answer the phone, how good you are at treating patients, etc. However, since advertising is such a visible form of marketing, we’ll focus most of today’s discussion there.

2. Most doctors were told before they got into practice something like, “All you need to do is be a good doctor and everything else will take care of itself.” While this statement is reassuring for young doctors, the problem is it simply isn’t true. I have worked with over 1,000 doctors and hospitals, and I have witnessed countless exceptions to the “rule.” In fact, the Executive Director of a leading medical association recently told me her most respected speaker at the big annual meeting quietly confessed to her about his lack of new patients. It seems while his peers would line up to hear him speak, in his own town he is the “best kept secret.”

3. Doctors and hospitals advertise for many reasons beyond attracting more patients. They may want to build their reputation (brand), answer competition, promote specific service lines, etc.

So clearly advertising is not synonymous with being needy or greedy.

Whatever your own misgivings or attitudes, I can assure you that lots of great doctors and hospitals not only advertise (not to mention market), but do so effectively. In fact, many command the lion’s share of the best cases, while their peers stand idly by and do nothing. But that is a topic for another post.

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Topics: Dental Marketing, Healthcare Marketing, Medical Marketing | 2 Comments »

Have Your Previous Marketing Failures Left You Too Afraid to Try Again?

By Stewart Gandolf | June 30, 2011

I had a call today with a prospective client that followed a theme I have heard at least one hundred times before. Essentially, he and his colleagues said they have “been burned” with their previous marketing efforts and are now “gun shy.” He was understandably very reticent to do anything.

He summarized, “I spent a lot of money with two different firms, and I still have nothing to show for it.”

I totally get it. Sadly, lots of people have been burned in their attempts to market before. But before you rush to the conclusion, “marketing doesn’t work,” hear me out.

1. Don’t give up. Ever see a baby learning how to walk? It’s brutal for them, but they keep at it. How would your life be if at two years old you simply sat on the floor and said to yourself, “I guess walking just isn’t for me. I give up.” Likewise, I don’t know too many married people who never had to deal with a painful rejection or two prior to meeting their mate. (Except for me, of course.)

Same goes for marketing. All of my clients who are now aggressive, successful marketers failed countless times in the past, especially when they were first getting started. What’s more, even today they still have failures, but they enjoy a lot more successes.

2. Mitigate risks. You can’t avoid all risks, or else you’ll stay permanently frozen on the sidelines. However, contrary to popular myth, successful people don’t relish taking risks. Rather, they do everything they can to minimize risk, and then take smart, conservative action.

I advocate a “best practices” approach – in other words, you should use proven direct response principles in combination with lots of real-world experience and data.

Just like in surgery, outcomes usually cannot be guaranteed, but when you build upon the experience of countless others before you, your odds of success greatly improve. Similarly, when you violate best practices, your odds of success plummet to near zero.

3. Understand that there are many kinds of marketers. Many doctors and corporate executives really have no understanding about the marketing world at all. Oftentimes they will spend a lot of money with someone who is great at creating pretty branded materials, clever ads or lots of Facebook followers. While those are all good things, that is not the same thing as delivering return on investment. If your marketing company is talking about advertising awards, creativity or branding, just be aware that they usually are not focused on generating revenue. Heck, a lot of marketing people don’t even talk about getting quantifiable results, let alone deliver them.

So what are you going to do now?

While luck can help, you would be foolish to rely on it. (Do you want your surgeon to rely on luck?)

You’ll need guts, a budget, clear objectives and hiring smarts. You should definitely hire a company with a track record of getting results, preferably with a direct response background. (Simplistically, direct response marketing is designed to get people to call you now, while the more common “general advertising” is about being creative to build awareness and your brand.)

So, yes, marketing failures hurt.

But if you are ever going to get where you want to go, you’ll need to at least start taking “baby steps” again.

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Medical Advertising Lessons From Daniel Boone

By Stewart Gandolf | May 7, 2011

Let’s be honest, some doctors (and executives) are  so risk averse that they are simply not cut out for external advertising.

When we are worried about a potential client, we work extra hard to confirm if they have realistic expectations. Not everyone passes.

As an extreme example, I once had someone ask for a guarantee on one, $500 ad. (Do you think that doctor can guarantee his patients good health for $500?)

In cases like that we politely say something like, “Based upon your level of anxiety and expectations, frankly we think you shouldn’t do advertising.”

That always surprises them, because they expect us to sell them. But not only would “selling them” be unethical, we know from experience that hyper anxious attitudes doom advertising campaigns from the outset.

Besides, there are always more conservative alternatives for these clients to pursue.

But the big “a-ha” for me came from an episode of History Channels’ “America: The Story of Us.”

This episode reminded me that America became America because some people were willing to take (much graver) risks as pioneers.

Sometimes we all think a little small, and it is easy to become paralyzed by even inconsequential risks.

Of course, not everyone in the old days was a pioneer – and some pioneers failed – but there were enough successes that America became the envy of the world.

So the next time you have to decide whether or not you want to take a small marketing risk, I recommend you ask, “What would Daniel Boone do?”

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Insist On A Specialist – 7 Reasons to Choose a Medical Advertising Agency

By Stewart Gandolf | April 30, 2011

Is the following story a case example of “marketing malpractice?”

A few weeks ago I received an email from an employee of a “general” advertising agency that was either pitching or trying to hold on to a healthcare client. (For your sake, I hope the email wasn’t from your ad agency.)

The people at this advertising agency apparently needed to do their homework. They asked us which media are best for healthcare clients, how to get return on investment, when to run, how to buy the media, what makes the phone ring, etc.

Funny thing. While their website  claims healthcare advertising expertise, they are apparently trying to figure these things out as they go. On their client’s dime.

Putting aside the fact that we politely declined to give them a free education (our kids need to eat too after all), there is a larger lesson to be learned from this anecdote.

It turns out many healthcare clients unwittingly settle for an inexperienced marketing or advertising generalist. Sadly, they often choose a firm that is local, has good salespeople and touts itself as being very “creative.”

Now while everyone needs to make a buck these days, and I don’t begrudge general ad agencies, I truly believe medical advertising is so unique that it requires specialized expertise. Here’s why:

1. The culture of healthcare is unique. Hospitals, for example, are run by business people but depend on the cooperation of doctors. Their day-to-day world is rife with political landmines. “Oops, my bad, the entire project just exploded for political reasons I don’t fully understand.”

2. Medical marketing laws and ethics can trip up medical advertising amateurs left and right. (See this recent article for some good insights.)

3. Why would anyone want to reinvent the wheel? Medical advertising is hard enough when you know best practices. Without relevant experience, you are doomed to experiment with hit-and-miss efforts, on the client’s tab.

4. While most advertising agencies try to differentiate themselves by how creative they are, healthcare clients are usually far more interested in tangible results. Hospitals, practices and manufacturers typically don’t want to pay for their ad agency’s creative fulfillment or art awards. Sure we want to be clever and imaginative, but not at the expense of results.

5. Consumers react differently to healthcare offerings than to traditional products or services. The stakes are higher, the consequences of a poor decision are worse, insurance reimbursement completely distorts free market dynamics, reputation is paramount, referral patterns are different and the consumer has no idea what the hell it is that you do. Winging it for a local restaurant is one thing, but to feel your way around healthcare advertising is quite another.

6. Ad agencies typically view their job as ending once the ads are run. What about doctor referral patterns? How do you track? Who is going to answer the phones? What about after hours inquiries? How do you convert visitors into patients? I used to work for one of the world’s leading ad agencies. Problems like those were “client-side.” But in healthcare, there is rarely someone that can handle all those thorny issues internally by themselves.

7. Finally, the marketing people that work for hospitals, practices or manufacturers often feel “all alone.” A true healthcare advertising agency can help internal marketing people finally get buy off from “higher ups.”

Of course you could argue, “Naturally you advocate these things so well, after all, you own a medical advertising agency.”

Fair enough.

But no one said you have to hire our firm.

Whomever you hire, just make sure they truly have medical advertising expertise and can bring added value based on real world experiences.

After all medical advertising is hard enough when you know what you are doing.

Trying to figure it out along the way is just to brutal to contemplate.

 

 

 

 

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Shrugging Off Unhappy Customers Can Be Hazardous – Just Ask United Airlines

By Stewart Gandolf | March 31, 2011

I still remember the day early in my career when an “old hat” at the company I worked for pulled me aside and confided, “While other companies give lip service to customer service, we don’t even do that here.”

Now, of course, that was an atrocious attitude, though he turned out to be correct. (I left shortly thereafter.)

However, in the age of the Internet and social media, such corporate indifference could be hazardous to your bottom line.

I will write soon about patient ratings (you may well be surprised by my views), but in the meantime I want to share a story starring United Airlines.

Dave Carroll, a musician, watched helplessly as his expensive Taylor guitar was dropped and broken by United’s baggage handlers. After a long and frustrating process, United refused to  reimburse him for the repairs. It felt like a slap in the face, so he told the representative, “I am a musician and I am going to create three videos about my experiences with United.”

It must have caused quite a whirlwind at United’s corporate offices when Carroll’s humorous first video, “United Breaks Guitars,” appeared YouTube. The PR folks tried to intervene, but by then the damage was done. Carroll refused to back down and later created the second and third videos as well.

Take  moment to watch the first video – just like 10,000,000 people already have. That’s 10 MILLION. What a debacle.

But the story continues. Last year I was stranded in Denver at a United Airlines customer service line for over 2 hours, with about a dozen other travelers. The one indifferent clerk would disappear for long stretches at a time. Worse, she never apologized, got help or even looked up at us. By then our little group had developed the cynical camaraderie common to situations like these, and I happened to mention the United Breaks Guitars video. But if only I could show it to them…

Ah, but then I remembered I could. So I pulled out my iPhone, and for a moment my fellow travelers enjoyed a vengeful laugh at United’s expense.

What do you think happened to those weary travelers when they (finally) got home? Think any of them posted their travel story on Facebook, along with the aforementioned video link?

The viral aspect of the video is easy to understand. Everyone has had the experience of feeling powerless when dealing with an indifferent corporation. (United isn’t alone, of course.) The video struck a nerve, clearly.

So what does this mean to you? Well, if you are in healthcare, whether you like it or not, your patients are now empowered. And, as they get used to technology, they are going to use it a lot more than they do now.

Most patients will forgive your organization for slights if someone apologizes, shows sincerity and handles the problem. But if all patients get is an indifferent runaround, look out. Someone is going to want to get even online.

By the way, if you  are ever standing in an endless line, feeling slighted by a certain airline, you now have a good story and video to share…

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Topics: Uncategorized | 3 Comments »


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