I am as frugal as the next guy, but in competitive markets, doing things on the cheap is not only ill advised, it can be downright dangerous.
A doctor called us the other day, saying that he wants to expand into a new line of business, despite entrenched competition. Now this a really nice guy who enjoys a good reputation, but he has never had to deal with ANY competition before. Since things have always been easy for him, he assumes that it will be a “walk in the park” to get referrals for his new business from area doctors.
That’s a big assumption. If he is right, great, but if not, the consequences could be dire.
It seems our doctor spent a lot of money getting his new center up and running. So much so in fact, that he has no money left over to market his new business. I explained that is like buying an expensive racehorse, but then being unable or unwilling to feed it.
His plan is to send an employee (who has never sold anything in her life) out into the market to win doctor referrals, using some “home-grown” marketing brochures and a website.
To prevent a potential debacle, I introduced him to one of the professional physician liaisons work with. Also known as physician relations, business development, practice reps, etc., physician liaisons are on-the-ground experts at generating referrals from doctors.
This particular liaison shared some interesting insights, based upon his experience personally walking into hundreds of doctors offices.
1. Referring doctors are used to seeing state-of-the-art marketing materials from pharmaceuticals, manufacturers, hospitals and competing groups. Home grown marketing materials always look amateurish. You wouldn’t think that would matter, but it does.
2. If his employee has a talent for sales (we don’t know that yet), she may be successful. However, if she doesn’t have any talent, she will fail. And even if she does have talent, her going out into the market without being appropriately trained, managed and compensated will probably result in failure as well.
3. This is a rural area, so if his new business gets started on the wrong foot, it may never recover. In small towns, good reputations take forever to build, but long-lasting bad ones can be created in an instant.
4. Given the big money at stake, the existing competitors will probably not take this encroachment on their turf lightly. Therefore, the level of competition is sure to increase, and an “arms race” may well ensue. Our doctor needs to be ready for a much more aggressive situation than the one he is walking into.
This doctor is a good guy, but he will greatly improve his odds of success if he finds the money to 1. train his rep, 2. get some decent marketing materials, and then 3. market appropriately.
In any event, I urge you to avoid painting yourself into a similar corner.
Whenever you start or own a business, your business plan needs to account for marketing too, not just the lease, build-out and employees. And, be ready for competition that turns out to be much stronger than you would hope for.
I recommend you look at your marketing dollars as an insurance policy to mitigate the risk of a painful misstep.
After all, a financial fall will leave you badly bruised for a long time.
I’ll write in the future about how to use Facebook for business, but in the meantime, I want to share a great article about privacy settings that a good friend forwarded to me.
I am a partner in a medical advertising agency, and something very intriguing has happened for us during the first two weeks of this year….
Our inquiry rate from doctors, hospitals, manufacturers and other potential health care clients has tripled over what we are used to.
Now, we expect a small bump due to New Years resolutions, and we’ve also made a few tweaks to our marketing efforts.
But I think the real cause of this explosion of interest is that doctors and health care organizations have finally given up on passively waiting for the recession to end.
For two years, I have exhorted readers, audiences and prospective clients to continue marketing despite the recession. Now, apparently, at least some people are fed up with waiting.
I want to make an important distinction here.
I didn’t say that our prospective clients are excited about the recovery we are alleged to be in the middle of. In fact, quite the opposite.
Out of the dozens of inquiries my partner and I have been fielding lately, not one person has mentioned any evidence of a recovery in his or her business. (I wrote in recent post about how I often get laughter from doctors and healthcare professionals whenever I mention our “recovery.”)
Which by the way, don’t even get me started. On January 14, CNBC reported that, “Retail sales unexpectedly fell in December, leaving 2009 with the biggest yearly drop on record.” What’s more, the same article reported unemployment was up. Again.
Yet the stock market that same day saw gains. Clearly there is a disconnect between Wall Street and Main Street. (Note: the economists I follow say it will take years before we see good economic times again.)
In any event, true to American spirit, at least some people appear to be dusting themselves off and taking matters into their own hands. They realize that hope is not a strategy, and waiting for things to get better could take a really long time.