So, it's been a little while since I last wrote (I blame lapse on Twitter, but that's a different post for an upcoming day). And while this is supposed to be a marketing blog, I wanted to get some general thoughts out about healthcare reform.
Overall, I think that anything that leads to more Americans being insured is a great thing for all of us. Right now 20% of all emergency room admittees are uninsured. But, the hospital has to treat them anyway. Additionally the number of people on Medicare and Medicaid is increasing, and we know that the government doesn't pay the same as the private payors. So, where do hospitals make up the difference? And what does this do to your standard of care? Think about it. The less money hospitals are reimbursed, the less they have to invest in necessary technology and improvements, to pay nurses and physicians, and even in some cases to continue operating.
I think most people are in agreement there. The issue tends to arise when we look at where the money is going to come from to pay for all of this. One of the areas that is quickly pointed to is medical imaging. Granted, the amount spent on medical imaging is rising every year. However, it is important to look at how imaging, when used properly (more on this in a minute) can actually save money in the long term. For example, let's assume that it costs $1,000 to do a Coronary CTA exam of a patient that presents with some basic risk factors. From there, the physician can assess any treatments that might be needed. Let's say these cost $5,000. Sounds pricey, right? Consider the alternative. The patient never gets scanned. Two weeks later he suffers a massive heart attack. He is then rushed to the hospital and has to undergo surgery. He is then in the hospital for a week to recover. I'd venture to guess that this proposition is not only less appealing to the gentleman that suffers the heart attack, but also that it is going to cost much more than the imaging and prescribed treatments.
That's the one aspect that seems to get missed the most. Medical Imaging, when used in the proper instances (those developed by physicians as generally accepted standards of care), is a very effective screening and prevention tool. If we look at costs in medicine, the majority are on the treatment side. Any time a disease or condition is caught in its early state, it costs much less to treat. If the focus is on prevention and screening, I would anticipate a long term savings in overall health care costs. Of course I'm not an economist, statisitican or anyone else that actually crunches the numbers, but...
(note: I'm not advocating the willy nilly use of imaging because there is always the real risks of overexposure. Thus the emphasis on proper usage).
Reform is definitely needed, and it's going to be expensive to do. I didn't really offer any solutions other than provide a focus on preventative care and screening, whatever that's worth. Just some thoughts as I'm trying to follow the process. I'm intersted to see where it will go, and ultimately how it will affect me both professionally and personally. It could generate a real marketing challenge, or it could generate a real marketing opportunity. At this point, it's hard to tell.
Thursday, July 23, 2009
Wednesday, July 1, 2009
Is penetration pricing a lost art?
Maybe this one is a little more of a personal gripe and it doesn't happen to everyone, but in my world, it's something that's bugging me, so I'm going to write about it.
Any marketing text will tell you that there are two primary strategies when introducing a new product, penetration pricing and prestige pricing. Each of these has its place. For prestige pricing, a company needs to have an established brand, a loyal fan base, and a true differentiator of a product. The best example of this is Apple with the iPhone. They launched the thing at $400-$500 a pop and were selling out of them left and right. They were the most expensive phone and people paid. Since then, the price has come down as the masses have joined the early adopters. This is classic prestige pricing.
On the flip side is penetration pricing. This tends to be used by companies that are introducing more of a "me-too" type product, or ones that don't have quite the established brand. It's designed to quickly take market share away and validate your product. The early purcahsers get a "deal" because they assume the risk of a new company or new product when the established players already have something. Then as they validate, the price creeps up as more customers are willing to give it a try (actually in today's markets this seems to be more that the new player sets the new price and others come down, but...). You tend to see this played out in the auto industry.
Now, my gripe. If you are introducing a me-too product, you better have one helluva brand reputation if you are going to use prestige pricing. And if you don't have that brand reputation, don't expect to get premium pricing! If there is a company that has 6,000 pieces of equipment installed, and you are trying to get your first, why would anyone pay more?
By demanding a higher price for a me-too product, validation is delayed, the competition has more time to build a story against you, and the sales team feels an incredible amount of pressure. It usually ends in deep discounting, one off price reductions, and totally erratic behavior (at least in my cases).
Overall, it seems that there are many more examples of prestige pricing than penetration pricing. Sometimes prestige works, sometimes it doesn't, but it seems to be the preferred method (of course I could be in a bubble that doesn't see pricing in the rest of the industries throughout the world).
I could go on and on about pricing and theory and execution, but if you are still reading this, I don't want to bore you any further. I'll wait for another post where I can look at pricing with regards to the technology adoption curve. Then there is the whole market pricing vs. "I just need to cover my costs, market be damned" pricing argument. Or the one-of-a-kind pricing phenomenon.
But in the end, just remember, have you earned the right to prestigously price your product, or would it be better to gain users quickly to help validate?
Any marketing text will tell you that there are two primary strategies when introducing a new product, penetration pricing and prestige pricing. Each of these has its place. For prestige pricing, a company needs to have an established brand, a loyal fan base, and a true differentiator of a product. The best example of this is Apple with the iPhone. They launched the thing at $400-$500 a pop and were selling out of them left and right. They were the most expensive phone and people paid. Since then, the price has come down as the masses have joined the early adopters. This is classic prestige pricing.
On the flip side is penetration pricing. This tends to be used by companies that are introducing more of a "me-too" type product, or ones that don't have quite the established brand. It's designed to quickly take market share away and validate your product. The early purcahsers get a "deal" because they assume the risk of a new company or new product when the established players already have something. Then as they validate, the price creeps up as more customers are willing to give it a try (actually in today's markets this seems to be more that the new player sets the new price and others come down, but...). You tend to see this played out in the auto industry.
Now, my gripe. If you are introducing a me-too product, you better have one helluva brand reputation if you are going to use prestige pricing. And if you don't have that brand reputation, don't expect to get premium pricing! If there is a company that has 6,000 pieces of equipment installed, and you are trying to get your first, why would anyone pay more?
By demanding a higher price for a me-too product, validation is delayed, the competition has more time to build a story against you, and the sales team feels an incredible amount of pressure. It usually ends in deep discounting, one off price reductions, and totally erratic behavior (at least in my cases).
Overall, it seems that there are many more examples of prestige pricing than penetration pricing. Sometimes prestige works, sometimes it doesn't, but it seems to be the preferred method (of course I could be in a bubble that doesn't see pricing in the rest of the industries throughout the world).
I could go on and on about pricing and theory and execution, but if you are still reading this, I don't want to bore you any further. I'll wait for another post where I can look at pricing with regards to the technology adoption curve. Then there is the whole market pricing vs. "I just need to cover my costs, market be damned" pricing argument. Or the one-of-a-kind pricing phenomenon.
But in the end, just remember, have you earned the right to prestigously price your product, or would it be better to gain users quickly to help validate?
Wednesday, June 24, 2009
Ivory Tower Marketing
In the hussle and bustle of trying to close out a quarter, I've been distracted from my posting. I know, terrible excuse, but it is what it is (check back next month for the lastest excuse for not posting...)
Anyway, something that one of my specialists mentioned the other day really kind of piqued my attention. We were talking about our factory and he said "It's like they try to market from an ivory tower." I wonder how many other businesses fall into this trap.
As marketers, we have to remember who we are marketing to. If we stay inside, behind a desk and computer, and rely on a couple market reports to try and understand what is going on, we will struggle to be successful. One of the biggest complaints that I hear is "how do they know without asking?"
Anecdotally we have a person that just started in a new position. He has been there three days and has already commented that the field doesn't know what they are doing or how to sell. I found this to be amazing insight from someone that has never spoken to anyone in the field, let alone a customer.
Ideally, a marketer needs to be out meeting customers, gaining insights, understanding what is wrong and how to fix it. We need to leave the ivory towers that we work in (ok, the carpet lined cubes, but whatever) and interact. Worst case we need to talk to the salespeople, the individuals that have developed relationships with customers.
Anyway, something that one of my specialists mentioned the other day really kind of piqued my attention. We were talking about our factory and he said "It's like they try to market from an ivory tower." I wonder how many other businesses fall into this trap.
As marketers, we have to remember who we are marketing to. If we stay inside, behind a desk and computer, and rely on a couple market reports to try and understand what is going on, we will struggle to be successful. One of the biggest complaints that I hear is "how do they know without asking?"
Anecdotally we have a person that just started in a new position. He has been there three days and has already commented that the field doesn't know what they are doing or how to sell. I found this to be amazing insight from someone that has never spoken to anyone in the field, let alone a customer.
Ideally, a marketer needs to be out meeting customers, gaining insights, understanding what is wrong and how to fix it. We need to leave the ivory towers that we work in (ok, the carpet lined cubes, but whatever) and interact. Worst case we need to talk to the salespeople, the individuals that have developed relationships with customers.
Tuesday, June 16, 2009
What's with Bing?
Ok, so granted I've only seen a couple commercials and read one article, but I'm already annoyed by Bing. Two reasons. One, the commercial doesn't make sense, you don't know what it's for, and it is borderline obnoxious. Thank goodness for Tivo. And two, what is Microsoft thinking? Rumor has it that they are going to drop $100 million on promoting this (rumor also has it that BING means Beacause It's Not Google). That's a lot of money to be the next best thing since Google, especially since Google didn't go anywhere.
Here's the thing, and I don't think Microsoft is alone. But how much sense does it make to be "as good as" the best? As a customer, if you have a choice between someone who is as good as the best or the best, what are you going to choose? As a company, if your goal is to be as good as the best or leader, then you have already failed. Because while you are working at being as good as the best, they are working at being better (and if they aren't well, that's a whole other story).
It's something that I see here every now and then. Aspirations to be 2nd best, or developing products to meet a current need as opposed to a future need. It's frustrating, and one thing that we aspire to push beyond.
There's no point in trying to be second best, or trying to be as good as the leader. The goal should always be the best. Two cliches, but the work... 1.) To be the best you have to beat (not tie) the best. 2.) Second place is the first loser.
Here's the thing, and I don't think Microsoft is alone. But how much sense does it make to be "as good as" the best? As a customer, if you have a choice between someone who is as good as the best or the best, what are you going to choose? As a company, if your goal is to be as good as the best or leader, then you have already failed. Because while you are working at being as good as the best, they are working at being better (and if they aren't well, that's a whole other story).
It's something that I see here every now and then. Aspirations to be 2nd best, or developing products to meet a current need as opposed to a future need. It's frustrating, and one thing that we aspire to push beyond.
There's no point in trying to be second best, or trying to be as good as the leader. The goal should always be the best. Two cliches, but the work... 1.) To be the best you have to beat (not tie) the best. 2.) Second place is the first loser.
Wednesday, June 10, 2009
Who can help me?
I'm stuck in quite the predicament with my internet provider, Clearwire right now. When I first made the switch from Comcast, I was excited about the new technology, and very optimistic. When the issues started, I was patient, trying to work through the glitches. Now, the problems have continued, the customer support has been terrible, and I've completely soured on Clearwire.
I've run through all of the troubleshooting steps at least five times because every time I chat or call, I get told to do the same thing (maybe they should consider keeping a record of things I've tried). Last time I was asked to try the modem in every room in the house, even though the nearest tower is to the SE and when in the second story SE window, I get virtually no signal. Putting it in the garage was a real good use of my time. So now, I want to cancel. I've been fighting for a year, and I'm tired of it. Unfortunately, I am locked into a two year contract. My opinion is that since Clearwire has failed miserably to uphold their service promise, and I have continually jumped through hoops to try and make it work, they should waive the termination fee. But who can actually help me with this?
When I ask the online chat person, they aren't able to do anything, and I have to call. When I try to send an e-mail because it is after the appropriate calling hours, I get a response that says I have to use the online chat. When I finally take time during my day to get ahold of someone on the phone, I have to do phone troubleshooting steps (this is challenging given the fact that I am at work during the day and can't troubleshoot my internet). Assuming I can ever get through those steps, I must then have a technician come out and look at my modem (apparently I'm uncapable of pointing it in SE direction, and am just making up problems because I get kicks out of talking to customer service and not being able to use my own internet). The technician though is only available from 9-4 Monday - Thursday (I'm not kidding, won't come early, won't come late because that might inconvenience the tech). This means I have to miss a half day of work because I have to wait for a tech, and I can't actually work at home because of the whole internet problem. So, do I horribly inconvenience myself to have a tech show up to tell me that it's not that bad for the five minutes that he is there, or do I pay an unrealistic cancellation fee to save myself the headache of continuing to have a modem that is as effective as a paperweight?
Why do companies do this? Rather than me being able to part ways, and chalk it up to it just didn't work for me, I am now so upset that I am telling everyone I know to stay away from Clearwire at all costs. Why is customer service so difficult? And it's not just Clearwire.
Companies spend so much time and effort on acquiring the customer that they have nothing left for their current customers. Current customers are a source of revenue and dollars. Non-customers are a source of expenses. Customer complaints should not be discouraged, dismissed, or thought of as frustrating. In fact, customer complaints should be seen as a great marketing opportunity. Handling a current customer's issue quickly and effectively is some of the best PR possible. All consumers know that there will be issues, nothing is perfect. It's how those issues are handled that really reflects on a company.
I've run through all of the troubleshooting steps at least five times because every time I chat or call, I get told to do the same thing (maybe they should consider keeping a record of things I've tried). Last time I was asked to try the modem in every room in the house, even though the nearest tower is to the SE and when in the second story SE window, I get virtually no signal. Putting it in the garage was a real good use of my time. So now, I want to cancel. I've been fighting for a year, and I'm tired of it. Unfortunately, I am locked into a two year contract. My opinion is that since Clearwire has failed miserably to uphold their service promise, and I have continually jumped through hoops to try and make it work, they should waive the termination fee. But who can actually help me with this?
When I ask the online chat person, they aren't able to do anything, and I have to call. When I try to send an e-mail because it is after the appropriate calling hours, I get a response that says I have to use the online chat. When I finally take time during my day to get ahold of someone on the phone, I have to do phone troubleshooting steps (this is challenging given the fact that I am at work during the day and can't troubleshoot my internet). Assuming I can ever get through those steps, I must then have a technician come out and look at my modem (apparently I'm uncapable of pointing it in SE direction, and am just making up problems because I get kicks out of talking to customer service and not being able to use my own internet). The technician though is only available from 9-4 Monday - Thursday (I'm not kidding, won't come early, won't come late because that might inconvenience the tech). This means I have to miss a half day of work because I have to wait for a tech, and I can't actually work at home because of the whole internet problem. So, do I horribly inconvenience myself to have a tech show up to tell me that it's not that bad for the five minutes that he is there, or do I pay an unrealistic cancellation fee to save myself the headache of continuing to have a modem that is as effective as a paperweight?
Why do companies do this? Rather than me being able to part ways, and chalk it up to it just didn't work for me, I am now so upset that I am telling everyone I know to stay away from Clearwire at all costs. Why is customer service so difficult? And it's not just Clearwire.
Companies spend so much time and effort on acquiring the customer that they have nothing left for their current customers. Current customers are a source of revenue and dollars. Non-customers are a source of expenses. Customer complaints should not be discouraged, dismissed, or thought of as frustrating. In fact, customer complaints should be seen as a great marketing opportunity. Handling a current customer's issue quickly and effectively is some of the best PR possible. All consumers know that there will be issues, nothing is perfect. It's how those issues are handled that really reflects on a company.
Monday, June 1, 2009
Marketing Budget Slashed? Time to get creative!
It's a fact that in the current business climate marketing budgets are getting slashed left and right. But there are two things one can do. Either complain, panic, fret, and ultimately just do less of what you usually do, or find creative new ways to market.
At one of my former employers, a reduced budget was a cause for panic. Whatever to do!? Rather than send a direct mail letter twice a month to every household in the state, they only send to 80% of the households. Rather than run an ad in the Sunday paper every weekend, they would run them only two weekends. Etc. etc. with all of the traditional marketing. And what happens? Overall response go down, they struggle to make their numbers, and then they ask for more money to send more mail. There are no thoughts about how to reach customers in a different way (and I'm not even touching on newspaper advertising in this post).
The current climate allows a marketer to explore so many different delivery vehicles, and be creative in how to reach a customer. Blogs, Facebook and even Twitter allow you a way to update your customers on what is going on at little to know costs. Podcasts are a unique and inexpensive way to provide short presentations to your customers and clients (by the way both of these can work for B2B and B2C businesses of all sizes). Limited budgets force marketers to be more targeted with messages in an effort to go after those potential customers that can buy. Messages need to be more tailored, more specific, and more unique.
Overall, I think that one of the best things to come out of this down turn will be a different type of marketing. A creative marketing, a more targeted marketing in general. Marketers have less money to get people that have less money to spend it. Those that are successful will really stand apart once we get through this downturn and move to the next profitable cycle.
Those marketers that throw up their hands and simply do less are missing a golden opportunity to try new and creative approaches.
At one of my former employers, a reduced budget was a cause for panic. Whatever to do!? Rather than send a direct mail letter twice a month to every household in the state, they only send to 80% of the households. Rather than run an ad in the Sunday paper every weekend, they would run them only two weekends. Etc. etc. with all of the traditional marketing. And what happens? Overall response go down, they struggle to make their numbers, and then they ask for more money to send more mail. There are no thoughts about how to reach customers in a different way (and I'm not even touching on newspaper advertising in this post).
The current climate allows a marketer to explore so many different delivery vehicles, and be creative in how to reach a customer. Blogs, Facebook and even Twitter allow you a way to update your customers on what is going on at little to know costs. Podcasts are a unique and inexpensive way to provide short presentations to your customers and clients (by the way both of these can work for B2B and B2C businesses of all sizes). Limited budgets force marketers to be more targeted with messages in an effort to go after those potential customers that can buy. Messages need to be more tailored, more specific, and more unique.
Overall, I think that one of the best things to come out of this down turn will be a different type of marketing. A creative marketing, a more targeted marketing in general. Marketers have less money to get people that have less money to spend it. Those that are successful will really stand apart once we get through this downturn and move to the next profitable cycle.
Those marketers that throw up their hands and simply do less are missing a golden opportunity to try new and creative approaches.
Friday, May 29, 2009
Insufficient Evidence?
I found this newsletter to be interesting. In the first article, the discussion is about how great it is that CMS denied coverage for CTC (see earlier posts to learn what this is). The very next article on the very same day shows that through Early Detection (read: screening), we show declines in cancer rates. Yet there was insufficient evidence to support the CMS decision. Some days it is absolutely fascinating to see our government in action.
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