When Experience Turns Into Complacency, Watch Out

A few days ago I was traveling with my family, en route to South America. Having logged over 2 million miles (I am “Platinum for life” on American Airlines), I know my way around airports as much as George Clooney’s character Ryan Bingham in the movie, “Up In the Air.”

Knowing that our gate was only a few feet from the Grand Hyatt at DFW where we were staying, I told my wife and kids to take their time. The trouble was, when we finally made it to security, we discovered the entrance was closed (it was 5 am). By the time we finally found an open security entrance and made into the terminal, the departure gate had changed to the opposite side of DFW.

My wife and two school-aged daughters kept up valiantly as I led the way, vaulting up the escalator to the train, then dashing through the airport until we arrived in our seats with only a couple of minutes to spare.

So, because of my vast experience and assumptions about what to expect, we almost missed our flight.

Of course, sometimes complacency leads to far more severe consequences. The Titanic’s Captain Edward John Smith is said to have ignored warnings about icebergs in part because he had never experienced any problems before during his 40-year + career. In the book, “The Checklist Manifesto,” Dr. Atul Gawande recounts many examples of disasters and near disasters in the operating room due to stupid, avoidable mistakes.

What does all this have to do with healthcare marketing?

A lot.

We meet new healthcare clients all the time who are very confident because their business, hospital or practice is doing “fine.” The trouble is, once we look a little deeper, at least half of them turn out to be wrong.

For example, almost every day we get a call from a hospital, group or practice that has been taking its referring doctor base for granted, but now is suffering from defections due to new competitors, mergers and/or alliances.

Worse, big problems like those are typically very difficult to fix after the fact.

So today, stop and take a few minutes to identify where YOU might be overly complacent because of your past successes.

Are you taking care of doctors who refer to you? Are your new patient counts going in the right direction? Are you wasting significant portions of your marketing budget? Are serious new competitors emerging? Are you vulnerable to broader changes in healthcare reimbursement?

By doing some homework and being proactive rather than reactive, you have a much greater chance of ongoing success, now and in the future.

Billionaire’s Advice: Take Perceived Risks – Not Actual Risks

I saw billionaire Wilbur Ross, Jr. on Charlie Rose tonight, and something he said struck me like a thunder bolt. He talked about how his holding company bought bankrupt Cleveland steelmaker LTV for cents on a dollar, and later sold it for billions in profits.

He shared his secrets during the interview:

“We’re in the business not so much of being contrarians, deliberately, but rather we’d like to take perceived risks instead of actual risks. And what I mean by that is that you get paid for taking the risk that people think is risky. You don’t particularly get paid for taking actual risks… We basically spent $90 million for assets on which LTV had spent $2.5 billion in the prior 5 years. And our assessment of the values was that if worse came to worse we could knock it down and sell it to the Chinese. Then we also bought accounts receivable and inventory for 50 cents on the dollar. So between the combination of things, we frankly felt we had no risk…The joke was right when everybody was saying  this was too risky,  it will never work, the big debate within our shop was should we just liquidate it and take the profit, or should we try to start it up. That’s how sure we were that we weren’t actually taking risk.”

What does this have to do with marketing success? Well, too often people assume that successful people take big risks. Actually, more often they do everything they can to mitigate unnecessary risk. Then, once they have done everything they can to cut their risks, they are willing to step up to the plate and try.

That is why direct response marketing principles appeal so much to me. Start with an honest assessment, learn from the experience of others before you, invest a limited amount, test, track and adjust, and then roll out if your marketing hypothesis turns out to be correct. If you guessed wrong, cut your losses, regroup, and try something else. Eventually, you’ll find a formula for success.

I remember being in Las Vegas with a now deceased friend of mine who was a high stakes poker player and businessman. He put down $15,000 to open in blackjack, while I put down $250. He had money to burn so for him it was fun.

However, for me, I told him that while I am happy to invest thousands on a marketing idea that can work, I can’t do it while gambling. The difference is that even if he had a good night, the next night he would still have to start at zero.

On the other hand, once I invest in a marketing strategy, it will either work or not. If not, I stop right away. But if it does work, it will bear fruit oftentimes for years, sometimes for decades.

So as you think about marketing, remember to follow the principles of learning from the experience of others before you, invest a little after you have done everything you can to mitigate risks, then “double down” if successful.

So let the other guy either freeze out of fear about marketing or blow it all in risky endeavors.

Your goal will be to take risks that are either zero or limited – and capitalize big time when your assumptions turn out to be right.