Starting a business or practice doesn’t start with hanging out “The Shingle.” It begins with market research and planning. While far from popular, the two activities are critical to success.
And it doesn’t make a difference if you’re starting a practice or getting ready to expand. Researching your market must always be part of the process.
So today, we’ll take a closer look at what it means to research your market. The primary objective is identifying both your customers and your competitors.
But before we go much further, let’s clarify what market research is.
Market research is the process of collecting information about your customers and competitors so that you can determine if your business idea, product, or service is viable.
After all, who wants to start a business if it doesn’t stand a chance to thrive? While researching your market is not an automatic guarantee for success, it will stack the odds on your side.
Most likely, you already know what type of practice you want to launch, or what additional service you want to add. But have you given adequate attention to the needs of your customers, your patients?
Have you thought about the people who are going to purchase your product or service? How can you be sure of what they want or need? And how do you know if your product or service is right for them?
Your Customers, Your Patients
Once you know the type of practice you want to start, it’s time to think about the people who would want and need what you will be offering. Who would most likely be interested in your services, and how would they benefit from them?
Depending on the type of practice you’ll be starting, this may be straight forward. Some businesses, however, may have to do a bit more digging before finding the answers.
For example, if you’re starting a practice serving people with diabetes, it’s clear cut. Unless you want to narrow your focus, anyone with diabetes might be a potential patient for you.
Compare this to starting a dermatology practice. Your focus might be on medical, cosmetic, restorative, or any combination thereof. Yet, depending on your focus, the demographics of your customer base, along with their needs, maybe be different and require tailored marketing messages.
Your Ideal Patient
You also want to think about the type of people you like to work with. Is there a specific group of people you enjoy working with most?
While most providers don’t limit themselves to work with a set group of people, it doesn’t have to keep you from compiling an image of your “ideal patient.”
- Perhaps you’ve noticed that you attract people who are pro-active with their health.
- Or maybe, people who pay attention to their diet seem to flock to your practice.
- Or, perhaps people who want a bit more hand-holding are attracted to your office.
Whatever it may be, most providers find they enjoy working with a particular type of patient. They feel energized by and look forward to seeing them, which is the opposite of working with patients that seem to drain them.
Who Are Your Patients?
Here are a few things you’ll want to know about your future patients.
What are the demographics?
- Predominately male or female?
- What is the age-group?
- Are they part of an ethnic group?
- Do they speak a different language?
- What are income and education levels?
- Do patients live within a certain radius?
- Are they urban or rural?
- Will you treat in your office or a facility?
- Do they share special needs?
- Do they share a particular illness?
Where are they?
- Where are your patients, where can you find them so you can talk with them?
- How can you reach them with your marketing message? Through social media, email, yellow page ads, newspapers…?
- Who else involved in their healthcare could you include in your marketing? Primary care providers, specialists, community organizations?
To do your research, you may utilize resources from the bureau of labor statistics, your local library, or the department of health and economic development council.
You may reach out to the local health department, to hospitals, community organizations, and check with your local library. You may also contact other clinics and providers in your market area.
Last but not least, perhaps there is a local Nurse Practitioner group where you could gain valuable insights about the community and available healthcare services.
Here are a few links to help you get started:
- https://data.census.gov
- https://www.data.gov/local/
- https://www.census.gov/topics/business-economy.html
How much research you will need depends on:
- Your marketing goals
- Your familiarity with the demographics of the market
- Existing healthcare services in the market
Once you have identified your target market and your ideal customer, ask yourself if their expectations are in line with what you can do for them. Will you be offering the types of services they are looking for?
As a side note… if you find successful practices that offer the same service you want to offer, you may assume that there exists some level of demand in your market.
Your Competition
Don’t let the term competition” derail you. Every business has competition, including healthcare. And while there seems to be an endless flood of patients, clinics and providers must still compete for them.
Competition does not refer to cut-throat practices or price wars. You simply want to know who else is in your market area, and what kind of services they offer.
Your goal is to understand how you and your services differ from the competition. Once you know what sets you apart, you can craft a clear and unique message that informs your market about the products and services that make you unique.
Ask yourself, “If every clinic in town would offer similar services, with similar rates and office hours, how would I choose? What would make me choose one clinic over another?”
What’s that one thing you would look for to make your decision? And while no one is likely to come out and ask you, it will be in the back of their mind… “why should I see you over the clinic down the street? What makes you different, and why should it matter to me?”
The challenge is to give your patients a reason compelling enough, so they choose you over any other office. But the only way you can do this is by knowing who your competition is and what services they offer.
Analyze The Competition
Start with an analysis of your competition. Because unless you know who your competitors are, what they do and offer, you can’t set yourself apart, nor stand out from the crowd.
Get an overview of the general healthcare services available in your community by utilizing the government resources listed earlier.
Then, get more granular about specific clinics and healthcare providers in your community. For more information, contact your local Chamber of Commerce, Department of Health, Hospitals, and Social Service Agencies.
Also, get in touch with your professional organization and educational institutions to get more insights about healthcare in the area. And once you have a good feel for what’s available, it’s time to do more detailed research.
Narrow your focus on a specific geographic area and identify the health care offices you might be competing with.
If you are in practice already, you have a good idea of who they are. But if you’re just starting, or are new to the area, you will need to do a bit more leg work.
Create a list of parameters to help you identify competing clinics, include:
- Location/address
- Specialty and size of the clinic
- Insurances accepted
- Hours of operation
- Promotional strategies used
- Anything else you that might help you with the task
Grab a copy of the local phone book or go online to create your list of clinics. Keep in mind, not all clinics close by will be competitors. Most likely, some will offer other services from you or serve a different population than you do.
Direct vs. Indirect Competitors
Direct competitors: they offer the same service as you, to the same target market.
For example, let’s assume you work with geriatrics. A direct competitor would be a clinic that works directly with the geriatric population in the same geographic area.
Indirect competitors: A clinic offers identical services to yours, but they serve a different target market.
An example would be a clinic offering primary care services to families. As part of their services, they also work with some geriatric clients; but it is not their exclusive focus.
Once you have identified “true competitors,” dig a little deeper.
Get more information about who they are, what services and products they offer, their pricing structure, and how they market their services.
How do you do that? Two primary
Go online and start searching. However, you could also call or get someone to call up the offices and get the information first hand. An added benefit gained from calling is that you’ll experience how the office presents itself to the public. It’s an excellent opportunity to discover if and how you could provide a better customer experience in your office.
What Sets You Apart?
Do you have any…?
- Special training
- Better communication skills
- Friendlier staff
- Better customer service
- More services on site
- More convenient office hours
- Better access to public transportation
- More than adequate parking
- Or whatever it may be…
After you’ve collected all this information, you will know what makes you and your office different from everyone else, your competition.
And please, understand that the thing that makes you different could be as simple as offering weekend clinic hours to patients. It doesn’t have to be something extraordinary.
It could be as simple as:
- You or someone on your staff speak another language.
- Perhaps you offer an add-on service in your office that translates into convenience for your patients.
- Or maybe, you’re proud to have friendly and helpful staff.
Coincidentally, once you’ve identified what makes you different from your competition, you’ve also identified your competitive advantage. It will form the cornerstone of your marketing.
In Summary…
Before you start a practice or work on expanding your current practice, take time to research your market.
Make sure you understand who your customers and what their needs are. Evaluate your service offering to ensure it is in alignment with what your market wants.
While forgoing market research may be tempting, you could run into problems later when you’re getting ready to start or expand your practice.
We want to know what you think; what are your thoughts about market research? Let us know by sharing your comment below…
By Johanna Hofmann, MBA, MAc., EAMP; regular contributor to the NPBusiness blog and author of “Smart Business Planning for Clinicians.”