"Then the Grasshopper knew...it is best to prepare for the days of necessity."
Generally speaking,the last few years have been very good for fertility clinics. We seem to be in a time of abundance. So I write this article now, to reference when the time comes. A mediocre patient experience or sub-par marketing presence may suffice for the moment, but now would be the time to begin improvements to avoid increased vulnerability during any potential drop in IVF cycles.
lean economic times expose the mediocre
David Kiley of Bloomberg Business argues that "weak brands" are exposed during a recession. During the Great Recession of 2009, brands like KB Toys, Circuit City, and Linens'n Things were forced to close their doors after decades in business. Stronger brands in their respective categories such as Toys "R" Us, Best Buy, and Bed, Bath and Beyond, offset the decline in the overall market with the gained market share of their vanquished competitors. Meanwhile, certain brands with low price points (Dollar Tree), easier points of sale (Amazon) and a unique customer experience (Apple) experienced accelerated growth though the weakest economy of their corporate existence.
Fertility treatment could be considered "recession-resistant" (I don't believe in such a thing as "recession proof"). There has never been a decline in the number of IVF cycles performed in the U.S. over the last decade. According to SART data, the slowest growth in IVF cycles overt the last fifteen years was in 2009, with still more than 1,400 cycles than the year before. Post recession growth has resumed to 8,000-10,000 year-to-year increases. Still, many clinics throughout the country reported a sharp decline during 2009 and 2010. I have spoken with others in the southern United States and in western Canada who have been effected by regional recessions caused by the decline in the price of oil.
hope for the best, prepare for the worst
I don't own a crystal ball. I can't say when the next economic downturn will come nor how strong it will be, and I am wary of those who tell us they can. We've heard for some time that the market will implode or the value of the US dollar will fall to zero. We're still waiting. Nonetheless, it would be reckless to assume that another sharp decline in the global economy will never affect fertility practices. It would be equally irresponsible to take for granted that IVF cycles will increase forever, even though current medical and social trends don't show any sign that they will decrease in the near future.
I will be eager to capitalize on the opportunities that present themselves. I am not concerned about an economic downturn. I prepare so that I don't have to be concerned. Neither should you be worried about the future of your practice. The point is not that you fret over potential upswings or drops in the market. The point is that you focus on providing a unique patient experience and leverage it to win market share from competing fertility centers.
Winning share of IVF cycles is the best hedge against a downturn
According to Fast Company, "market share is the most important metric because it is a relative measurement against external benchmarks." In other words, increased market share is your buffer heading into a recession. If the total number of IVF cycles decrease in a given area, you can mitigate the decline with an increase in the share of IVF cycles that your clinic performs. Rather than scramble to grow market share at the onset of a recession, we can begin to take measures now that will blunt the losses we might have otherwise incurred. We may even be able to use a weak economy as an opportunity for growth. Research from the Harvard Business Review shows that 9% of companies emerged from the Great Recession, performing better on key financial parameters than they had before, due to a combination of strategic cuts and investments in marketing and new assets. These are six measures fertility centers can take to win market share and prepare for a recession:
- Pay attention to other fertility centers' reviews to inform your competitive analysis. Monitoring sites like RateMDs, Yelp, Vitals, Facebook, ZocDoc, and Fertility Authority, allows you to see what patients like and dislike about other fertility specialists in your area, so you can assess your competitive strengths and weaknesses. Read all of the reviews that you can find of every fertility doctor/clinic in your area including your own. Example: you read several complaints that another reproductive endocrinologist (RE) was very inaccessible, while your reviewers laud you for the time you spend with your patients. Your "time with patient" is a competitive strength. If other practices have very few complaints about billing, but almost all of your negative reviews involve your billing office, your billing process is a competitive disadvantage that has to be corrected.
- Track all of your marketing efforts. In a recent blog post, I talk about the importance of closely monitoring key performance indicators (KPI) at your practice. You can't nurture relationships with your top five referring OBs if you don't know who they are. You can't cut the expenses of your three least effective marketing ventures if you don't quantify what results they produce. Start tracking your marketing effectiveness now so that you have a finely tuned system in place when going into an economic slow down.
- Expand your "word of mouth" referral system by over 600% with social media. Most fertility practices I have spoken to put their "word of mouth" referrals and those who report having found the practice through the internet at a combined fifty percent of new patients. Internet and word of mouth aren't entirely distinguishable from one another, due to the prevalence of social media. Data from Statista shows that on Facebook alone, your patients have an average of 360 friends. Meanwhile, according to the Social Brain Hypothesis, on average, people have a social circle of fifty friends and fifteen in whom they "can confide in about most things". So if you don't effectively leverage social media, you forfeit sixty to ninety six percent of the word of mouth social network that would otherwise be at your disposal. Use social media as both outbound distribution of patient recommendations and a source of inbound feedback to continually monitor the patient experience. Amplify your word of mouth referral network as much as you can by engaging your community on social media.
- Strengthen your MD referral relationships. Word of mouth is king. Internet presence is paramount. Still, referrals from OB offices play a hugely important role in new patient acquisition. Most clinics report half of their new patients coming from referring MD offices. One practice in the southern United States increased OB referrals from less than 40% of all new patient visits to 60%, citing physician lunches "as their single biggest marketing return by far". Your REs are extremely busy; taking them to an OB's office for an informational lunch might seem like an inefficient use of time, but with relationships with referring doctors yielding such high returns, it's wise to nurture these relationships before you need them the most.
- Test other markets. If you live in a more sparsely populated area, it may be that no amount of marketing or exceptional patient experience will yield you enough new patients. There are various ways for fertility centers to enter new markets. First, you can check Google Analytics to see if people are looking at your fertility center from other markets. If you live in an area with a low cost of living index, within a short flight of an area with a much higher cost of living, it could be that your IVF pricing is much more affordable than clinics in that area. Further data from the Harvard Business Review supports that drawing patients from remote markets is a way of increasing your market "headroom". If pricing is equal, and you can't find other strong competitive advantages to why someone would come to you from out of town, your only option for growth may to be open an office in a new market.
- Increase your role in support. Connecting people to support is part of the patient care experience. As part of the standard of care, people should be informed of resources for both professional and peer support. Support groups, by default, then become referral networks. Like online reputation and social media, this is why effective marketing inherently depends on outstanding patient attention. Patients use their support groups to solicit and make recommendations of fertility centers. By supporting organizations like RESOLVE, and Fertility Matters, and informing patients of other support resources online and in their area, you give patients the confidence to recommend you to others in their support networks.
Organize, don't agonize
There's no way to be certain if the next recession will come in twenty days or twenty years. We don't want to worry about how we will operate during a recession, we want to operate in a way so we don't have to worry. If the trend in IVF cycles ever stops its nationwide increase, you will be well-served from having won market share from other clinics. Gaining market share is the greatest hedge against an economic downturn because it mitigates the overall decrease in IVF cycles. We can increase market share by expanding our "word of mouth" systems, nurturing referral relationships, empowering support networks, testing new markets, and tracking everything we do to bring in new patients. By preparing for a downturn in IVF cycles while conditions are strong, your fertility center will be well poised to flourish and grow.
win share of ivf cycles from other clinics to hedge against a downturn! download my absolutely free e-book "Digital Marketing for fertility centers: how to use digital media to acquire new ivf patients in 2016".