By Scott Andrews
Most of us can probably recall a time not so long ago when we would run to Blockbuster to rent a movie or two for the weekend. It wasn’t that big of a deal to pop into a store and pick up the latest release, as they were often located in the same strip mall as your dry cleaner, grocery store, or favorite takeout pizza restaurant. All were typically within a few miles of most homes. It was a Friday night ritual for many of us.
At its pinnacle, Blockbuster had over 9,000 locations and revenues of nearly 6 billion. They were on top of the world and a retail darling. However, they didn’t react to the changing desires of consumers or utilize the internet to evolve their business model quickly enough. Sure, they tried to eliminate late fees (these accounted for nearly 20% of their revenue) – but would later reverse that decision – mail movies directly to you, and even flirted with streaming, but they were fundamentally a brick and mortar company. They couldn’t react to the changing times fast enough and ultimately Netflix drove them out of business.
So, what can health systems learn from Blockbuster’s experience? Adapt or die! They need to focus on customers’ needs and tastes or risk losing business to the competition. After all, whether healthcare wants to admit it yet or not, they are in the customer satisfaction business. They need to think about customer convenience, customer cost, and the quality of the experience they provide. They need to use tried and true measures like the lifetime value of a customer, customer acquisition, and customer retention models to better understand where to invest and how to attract customers.[Read more…] about What Can Healthcare Learn from Blockbuster?