Healthcare’s Most Ignored Value Driver: Brand Strategy

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By Todd Lunsford, Fractional CMO, Chief Outsiders

Healthcare leaders have long neglected branding as a key business driver, typically spending far less than most service industries on advertising and often even leaving it out of their growth plans entirely. In particular, the provider side of the healthcare industry—namely hospitals, physician practices, and specialty clinics—have shied away from aggressive consumer branding to attract patients and instead continue to rely on traditional referral networks and locally-based sales strategies. 

But as consumer tastes evolve to demand a more satisfying patient experience from their healthcare providers, there are signs that the future will favor the bold and the branded. Focused startups and franchisors are proliferating and aggressively taking market share by going straight to consumers with crisp, differentiated stories. So, is now the time for a broader swath of healthcare companies to give branding strategy its day in the sun?

Consumers Embrace A New Paradigm

For generations, healthcare was largely regional in nature. Doctors were considered pillars of their local communities and consumers exclusively sought recommendations from friends, family and primary care physicians. So, to the extent that healthcare leaders thought about branding at all, they operated on several key assumptions:

• Individual doctors are the brand that matters
• Healthcare providers grow primarily through capturing segments of local referral networks, not through marketing or advertising
• Aggressive national or regional branding is fraught with risk

It’s understandable that this mindset has lingered in the industry given the persistence of local networks, the very personal and emotional nature of healthcare decisions and a few highly publicized re-branding debacles in the hospital sector. 

But now, new market forces are impacting the industry and challenging the old paradigm. Consumers are struggling with the rapidly rising burden of out-of-pocket healthcare spending, the digital world offers better tools for comparing providers and accessing services, and in particular, the younger demographic segments are embracing a very different provider selection process or “buyer’s journey.” As a Business Insider Intelligence study recently found, nearly half of millennials don’t even have a primary care physician, largely due to providers’ failure to create a consumer-oriented healthcare experience that meets their needs. Since the primary care physician has long been the linchpin of local referral networks, this trend has enormous implications for how all healthcare provider organizations deliver services and grow.

When providers are able to zero in on healthcare solutions that resonate with very specific consumer needs and deliver patient experiences that more closely mimic the rest of the convenience-driven services sector, an aggressive consumer branding strategy can often help these solutions proliferate and gain market acceptance faster. The stalwarts of traditional healthcare would be wise to study several emerging models, and their corresponding consumer-focused market entry and growth strategies.

Three Models For Consumer Branding In Healthcare, One Core Theme 

Three different models have recently highlighted the use of targeted consumer branding to gain a foothold and grow market share vs. traditional healthcare practices and organizations. As it turns out, they all leverage a core theme – the ability to differentiate their brands based upon a superior patient experience. The models can be summarized as follows:

Model	Essence of Strategy	Sectors	Examples
Innovative Delivery	Re-engineer end-to-end delivery and patient experience for a historically expensive or highly complex / inconvenient service	Orthodontics / Dental	SmileDirect ClubClearChoice (Implants)
Focused Entry	Serve very narrow product / service set with low prices and convenient digital delivery, expand relationships over time	Men’s health	RomanHimss
Franchise	Leverage brand to consolidate a fragmented mom and pop industry	Home health care	Visiting AngelsBrightstar

What might come as a surprise is that none of these companies, which have recently amassed hundreds of $ millions in funding and new revenue, have actually discovered anything new from a clinical standpoint—they’re simply reconfiguring the patient experience away from the old primary care physician (or dentist) centric model, branding it, and using that as a platform for relationship expansion. And though they’re serving relatively simple, narrow consumer needs right now, there’s no reason to think that SmileDirectClub can’t someday expand its offering into wire braces, Roman can’t address a wider range of men’s health services, or home healthcare franchisors can’t extend their offerings into home-based primary or specialty care. It’s already happening.

Strong local and regional brands, and individual providers with outstanding clinical reputations, aren’t going away. But they will face growing competition from companies who know how to differentiate through price, the convenience of delivery methods, and most importantly, branded patient experience. 

COVID-19 Serves As Accelerator 

These emerging brands are all attempting to capitalize on both increasing consumer utilization of the internet for provider selection and increasing acceptance of remote interaction for clinical delivery (telehealth.) These trends were well underway long before March 2020; however, COVID-19 sent telehealth into overdrive as relaxed state regulations, rapidly improving video conference technology and forced consumer acceptance of remote interaction with providers created a “perfect storm” of accelerating, highly complementary trends.

Because of these game-changing developments, now is the time for leaders of healthcare provider organizations to ask fundamental questions about their value propositions and the investments required to bring them to life in the minds of consumers. Is your overall patient experience distinctive enough? Are you investing enough in marketing and advertising to be recognized for it? And what will it mean if your target customers continue to migrate away from traditional referral networks? Are you investing enough to compete with the startup or franchised competitors gaining a foothold with self-directed consumers in your space? 

Healthcare organizations that realize the increasing value of a strong brand identity—and are willing to invest in it accordingly—will be better positioned to gain market share and drive growth in this brave new world. In other words: to win. 

Todd Lunsford is a CMO with Chief Outsiders, the nation’s fastest growing executive-as-a-service company.