How to Measure, Win and Improve Patient Loyalty

Patient loyalty is immensely valuable to healthcare organizations. But it’s also exceedingly difficult to measure and secure. Brian Wynne, VP and general manager at NRC Health, explores why many organizations struggle to keep healthcare customers coming back — and he reveals some strategies to help earn customer loyalty.

Q: Are healthcare customers loyal?

BW: Speaking to the majority, the short answer is, “No.”

Individuals switch healthcare providers about as often as wireless customers change cellphone carriers. Should one feel trapped or unaware of alternative care options, a return customer is likely — but we should not confuse this with loyalty. NRC Health research has found that convenience factors alone are enough to motivate 80% of patients to switch providers.

This creates a challenge for healthcare organizations that have historically considered convenience to be an internal perk. Organizations must redefine and redesign what convenient care looks like for the physical and virtual customer.

New players are entering the healthcare marketplace, startups and government initiatives aim to enable transparent price-shopping and quality outcomes are increasingly inclusive of the holistic patient journey. Patients now have a better idea of the value they can get, and they are more willing to branch out and find a new provider if their current one disappoints.

Q: Why does this matter? Why is patient loyalty so important?

BW: First, it’s enormously valuable to retain existing customers. A study from Bain found that a 5% increase in customer loyalty makes any business 25% more profitable.

Much of this profit boost comes from realizing a customer’s lifetime expenditure. In healthcare, this amounts to $1.4 million per individual, or $4.3 million per family of four.

Loyal customers also decrease the costs of service. Returning patients require less onboarding time, fewer redundant tests or screenings and less time getting up to speed on any individual health status. This can translate to more streamlined and efficient care.

“Thirteen percent of patients wanted to choose a different provider, but they couldn’t because their health plans restricted their choices. These patients might keep coming back to their providers — but you couldn’t really call them loyal.”

The impact on care quality is even more important. When patients stay within one health system, there’s less chance for their care needs to slip through the cracks. Miscommunication is kept to a minimum and continuity of care is preserved. That leads to better patient outcomes and increased satisfaction along the patient journey.

Q: Why do some organizations struggle with patient loyalty?

BW: Loyalty is multifaceted and complex.

Many health systems carefully track their retention rates, but retention alone does not tell a complete story. Customer churn rates measure consumer behavior effectively but do not capture customer attitudes or preferences. It’s very possible that a customer offers repeat business without feeling particularly attached to a brand.

It’s a phenomenon called spurious loyalty, and the healthcare marketplace is rife with it. A Health Affairs survey found that 13% of patients wanted to choose a different provider, but they couldn’t because their health plans restricted their choices. These patients might keep coming back to their providers — but you couldn’t really call them loyal.

This spurious loyalty shows why organizations can’t rely on strictly behavioral measures. They need to take stock of loyalty’s emotional and attitudinal components as well.

Q: If behavioral metrics don’t work, how can organizations measure loyalty effectively?

BW: It’s important to understand that loyalty is about relationships. It stems from feelings of familiarity and trust that are built up over a long period of time. Of course, an important part of that is providing positive care experiences. Those are necessary — although not sufficient — for building loyalty with a patient.

The deeper challenge is to understand how individuals feel about every interaction with a healthcare brand. This includes ancillary moments like ease of access, appointment setting and managing their bills. It also encompasses more indirect brand exposure, such as community engagement and word of mouth among friends, family and online social outlets.

Any complete measure of a patient’s relationship with a health brand will have to assess these subjective building blocks of loyalty.

Q: Once they measure it, how can organizations improve patient loyalty?

BW: As with anything else an organization hopes to improve, it must commit to the task. Loyalty should become part of the lexicon of the entire organization, starting with C-suite leaders. Healthcare organizations need a well-defined set of goals and execution strategy to be able to identify success with building customer loyalty.

Regardless of the specific tactics chosen, prioritizing customer relationships will always carry the day. This means reaching beyond the hospital walls to maximize the potential of every touch point. Intentional, thoughtful engagement will deliver on brand promise, help define value for today’s healthcare customer and ultimately earn loyalty.

About the Author | NRC Health

NRC Health helps healthcare organizations better understand the people they care for and design experiences that inspire loyalty.