Your business, whether healthcare which is our focus, or any other form of business is an intention craft. Or at least that is how we are going to look at it for the next few minutes.
Everyone understands the concept of a ladder. You start at the bottom and work you way up, rung by rung to reach your goal. That might be a light bulb that needs replacing, a bookshelf that needs reaching or (horror of horrors) a gutter that needs cleaning. There is another kind of ladder though. If you haven’t heard of the concept of the customer benefit ladder then you are about to learn something useful.
What is the customer benefit ladder?
The customer benefit ladder captures the concept of raising the perceived value of a product by describing it in a range of different ways. Each way of describing your product represents a rung on the ladder. As you move towards the top you are seeking to add more perceived value.
Let’s get one thing straight right from the beginning. This is not about describing your product inaccurately or deceiving your customer. That is no good for anyone, especially your brand. It is about understanding what customer need you are meeting and the different levels within that need.
There are a range of versions of the ladder which all have some characteristics in common.
- Towards the bottom the focus is on the product, how you would describe it physically (rung one) and how you would describe it’s features (rung two).
- In the middle it starts to focus on the benefits is can provide. Product benefits first (rung three) and then customer benefits (rung four).
- Finally at the top it focusses on emotional benefits (rung five).
Here is an example describing our brand identity work.
A professional service during which you will meet with the provider, answer some questions, review some presentations and receive some digital files.
A fast, responsive service during which you will meet with our qualified designers, explore your brand strategy, review a range of creative design solutions and receive a full range of digital files for use across all of your customer touchpoints.
Delivered by talented, experienced designers who understand brand strategy, our brand identity work consistently provides distinct, highly memorable visual identity systems that quickly become associated with their brand and add tangible value for their owners.
Working with an expert team of designers who take the time to get to know you and understand your business, you can be assured of a professional brand identity service which will deliver top quality work on time with minimum fuss.
Work with us and we’ll help you bring your dreams to life with brand identity based on robust strategy. Be confident that your brand identity engages your customers, communicates your messages and doesn’t get lost amongst your competitors. Know that your business doesn’t just look good it performs beautifully too.
This is just an example and not a carefully crafted end result but can you see how the language changes and how that affects you while you are reading? Useful.
How could you apply this to your latest business or product?
Keep it simple
As always. Keep it simple. Try answering each of the questions below and you should have the five rungs of the ladder in a neat line. Which works best with ladders.
What is is? What does it do? How does it help? How will it help your customer? How will that make your customer feel?
Which you choose to use at various points in your marketing communications and at different touchpoints will depend on your specific marketing goal and where the customer is in the funnel. That’s something for another day…
Positioning is at the heart of marketing and is a key driver for the decisions you make about how how to design, deliver and promote your products. Pretty important then. Whether you are a pharmacist, optician, dentist or any other kind of healthcare professional thinking about developing your next clinical service or you provide products and services for healthcare professionals, get your positioning right and you have a solid foundation.
Getting it right
Positioning is what you want to stand for in the minds of your customers. It is deciding what two, three or four key associations (mental links) you want people to have when they think about (or feel) of your pharmacy. A small number of simple associations works best because they are hard to build (and maintain) and people are busy. You might want people to associate your particular healthcare service with ‘speed’, ‘convenience’ and ‘value’ or perhaps ‘quality’, ‘product availability’ and ‘professionalism’. The choice is yours but don’t underestimate the effect it will have on your customers and well, everything you do.
It’s a balance
There are three areas to think about when positioning. Working through the options to select the associations with the right balance is the skill. Start with your customer, then your competitor and finish with your company. It is possible to get this totally wrong and set yourself up to fail. Many healthcare professionals suffer from this to some extent. For example as a profession, pharmacy is closely associated with free NHS services. That is generally good for them. However it can make it challenging to begin charging for private services. The beloved public have a strong association (mental link) between pharmacy and free healthcare. They expect it to be free. Around 90% of pharmacy services are. The pharmacy profession did a good job of reinforcing those association with free prescription collection and delivery and so on. That is positioning working against pharmacy.
Now, positioning starts with and builds on targeting, segmentation and research, all of which take your initial idea and explore who will be most interested in paying you for it. You can’t position your business, product, idea or anything else for that matter without deciding on who you are positioning it to. Define your target market first. When defining your target segment you will think in detail about who the actual people in that segment are. What are their attitudes, beliefs and behaviours. During targeting it is common ot write a profile or description of those people. This is where that profile starts to come in handy. Look at the profile and identify what matters most and position based on that. Start your list of associations.
After thinking about your customer (always customer first) think about your competitors. List them and take a look at how they operate, what they offer and how they promote it. After a bit of practice you’ll be able to spot any planned associations very easily and also when there aren’t any at all! If you competitor is positioning on ‘lowest cost’ consider positioning on ’highest quality’. That is, somewhere towards the opposite. The aim is to establish a distinctive position that ensures customers don’t get you mixed up with your competitors and that they can choose you when they need help. Customer trumps competitor though so don’t immediately throw away your initial list of associations based on your customer. This is where the balance comes in. Develop your list of associations.
Let’s be clear about something. Positioning is not posturing. The latter deals with the aim of impressing others but often comes with a veil of deceit. Posturing involves misleading those your are posturing to. Humans hate being mislead. Positioning is not that. At all. In any way. You can’t promise what you can’t deliver and expect people to trust you. If you promise an apple and deliver an orange expect the road to be bumpy at best and most likely very short too. Make sure that you review your final list of associations to make sure you can consistently deliver what you claim to the standard expected. If ‘speed’ is your thing make sure you can and do deliver. Protect that capability. Associations take a long time to build and only a short while to break.
The implementation of your marketing strategy through the seven Ps to your brand experience should all be considered through the lens of your positioning.
Unless you have limitless resources targeting is critical. Selecting which market segments you will choose to focus on initially is an important step and one that enables you to maximise return on your investment. Targeting is a little like the application of topical treatments. No, it is, really. Stick with me on this one.
Targeting relies on good segmentation
You have completed a good segmentation of your market based on factors that are meaningful and you have a set of segments that you are able to reach. Good work. Targeting is the active decision about which segments to invest in marketing to and which to ignore. Yes, that’s right. You are going to ignore some of your market. Here is why…
Imagine you have one 50 gram tube of cream to be applied topically for the treatment of X,Y,Z skin condition. The 50 gram tube represents your total resources for the foreseeable future due to the cream being in short supply. Your goal is to treat the condition as effectively as possible. You would apply the cream to the affected area and ignore unaffected areas without a second thought. You wouldn’t start at the top of the body and move downwards towards the feet. You would quickly run out of cream before you covered the whole body and you may or may not treat the affected area. This approach would clearly not be the most effective.
It may seem like an outlandish example and to an extent it is, however imagine your total market was the body and your target segment was the area affected by the skin condition. You might waste a huge amount of resources by applying them too thinly, everywhere they could be applied, rather than where they will have their optimum effect. This, in a nutshell is targeted marketing and is one of the most important steps in developing your marketing strategy
We’ve looked at optimising use of resources as one of the main reasons to take a targeted approach to marketing. How do you know which segment to target? If your segmentation is good you can fairly rapidly develop and understanding of which segments may be most attractive to you. Do some maths. Quantity the value of each segment by multiplying the population by the average monetary value of each member. Adjust for available market share (customers you aren’t already serving), a sensible timeframe and any other relevant factors and you will have a single number that tells you what that segment might be worth to you.
There are of course other factors that may be relevant such as how challenging it may be to reach and convert members of a particular segment, so include these in your thinking and it should become clear which segments to focus on first. Which it is important to note. Focusing on one segment now does not prevent your from focusing on another in due course. Targeting is about optimising use of resources.
Another reason to target particular segments is that you can tailor your product and how you market it to appeal more intensely to a particular segment. If you try and appeal to every segment of the market you risk only being generally appealing. Nobody wants to be generally appealing.
Equally if you market to all segments then you have to compete with other providers in all of those segments. Which makes things more complicated and costly. Target specific segments and you will only have to compete with providers also focusing on those segments. You may find a segment without any competitors!
Describe your segments
When you have chosen which segments to target and which to ignore, work on a description of the people in the segment. They should all be very similar if you’ve done your segmentation right! Include who they are, what they think, what they do and how they behave. It’s worth putting in some real thought as this description or profile is very useful during the latter stages of the marketing process.
Whether you busy yourself delivering healthcare services directly to patients or you sell products or services to the people who do, you will be thinking about market segmentation. Market segmentation is the process of separating the total market for your product into groups that are homogeneous within and heterogeneous without. That is, the same within and different without. There. Glad we got that out of the way. Now, what does it really mean and is it useful to you?
Where did the idea come form?
Back at the beginning of marketing, companies seeking to sell something used an approach called mass marketing. This is based on selling a product to a single type of customer using just one approach. One size fits all you might say. Around 30 years ago it dawned on marketers as a species that there may, just possibly, be more than one type of customer for their product. This seemed to pass the common sense test that people are all different and hence it must be true. Following on from the common sense test, academics like Wendell R Smith and others sought evidence and concluded that this was indeed the case. They called the different groups of people who might want to buy a specific product, market segments. Segmentation, the activity, came soon afterwards.
Segmentation has become a corner stone of marketing strategy in recent decades and while academic theories continue to develop, many companies are getting on with using segmentation to help them sell their products.
The reported advantages of segmentation also seem like common sense. People are different so they might buy products for different reasons. Surely not everyone who buys paracetamol, purchases it for the same reasons. Some might keep it in case they have the odd headache. Some might use it to manage pain associated with a long term medical condition. Some might use it for pain following sports training. We could go on but let’s stop there.
Market segmentation, and the value therein, relies on these differences being significant in one important respect. They affect purchasing behaviour and are something that companies can use to their advantage when selling. If you produce a paracetamol advert with a 30 year old rugby player as the star, that sort of person may well pay more attention to your product that if they were not represented. That’s the theory.
Segmentation helps you understand and characterise the market for your product in more detail.
This allows you to be more granular and specific when marketing and tailor your content and activity.
This in turn produces more effective marketing and higher sales.
You can only averagely appeal to an average customer. Segmentation removes the idea of an average customer and replaces that with different, specific groups who can be described and whose behaviour can be measured.
Same within, different without
For a segment to be useful in characterising a group of people, that group has to be different from the other groups you have identified. If it is the same as any other group then it’s not a separate segment. Combine them. All of the individuals in a segment have to be the same. That’s what makes them a segment. If they are not then it’s not a single segment. Split them.
Correctly identifying a segment enables you to write a segment profile or description. How does this help you may wonder? Well, if you have a reasonably accurate description of your customer (demographics, beliefs, attitudes and behaviours) you have a useful tool to support marketing decisions therafter.
You can, of course, segment in a huge range of ways but here is a starter towards making a good segmentation.
Category | Start with the broadest group who demonstrate a need for your product.
Function | Move onto look at whether there are any functional segments. E.g. Solid formulations for adults and liquid for children. Same need, different delivery based on the groups characteristics.
Personality | Finally, take a look at whether there are any groups who have the same functional needs who differ in personality. E.g. Their personal attitudes, beliefs and behaviours. Headaches, LTCs and rugby players etc.
Don’t get distracted
It is very easy to get tied up in segmentation and lose sight of the overall purpose. You are trying to identify market characteristics that affect one, key outcome. Buying! The only point in segmentation is to assist you in approaching your marketing in a manner that will maximise sales. Let’s remember too, that when we say marketing we aren’t just talking about communications here, we are talking about the strategic process and the subsequent tactical delivery.
While segmenting, ask yourself one key question. Does this apparent characteristic that I am investigating have any real affect on buying and is it something that I can influence?
So what if your segment description says your perfect customer likes spending the weekend throwing an egg shaped ball backwards? If it doesn’t influence purchasing decisions it doesn’t matter. Get rid of it. In the case of paracetamol, and in my experience, egg shaped balls might be something you could use but that is a specific case…
How do you make decisions in your business? What do you base decisions on? If you really analyse yourself you might find that you base your decisions, some of them pretty important, even fundamental ones on a range of beliefs and attitudes driven by past experience, stories you’ve heard and things you’ve read (like this article). We have no other choice really but it is the quality and reliability of that experience that can make a big difference. If you are basing decision making on beliefs founded on limited personal experience, limited group experience or third hand experiences you are missing the real opportunity to learn from the people who have the answers, your customers.
Ask your customers
Is the way we are doing this right? Does doing it at all make sense? How will people respond to my new service idea? How much should I charge for this? If these are questions that run through your mind then don’t forget that you are allowed to ask your customers. There are no rules against it.
When you have liberated yourself by adopting a market orientation and managed to point your organisation in the same direction you may find yourself with a new issue to overcome. Having previously made decisions based purely on experience and your assumptions about what customers want you are left in the dark. All is not lost. In fact you are about to gain a great deal. Replace the beliefs you had in the past about what your customers want with evidence based on actually asking them. It sounds too simple. It must be a trick right?! It’s not a trick. However, it isn’t as easy as it sounds to get it right and there are ways that work better and ways that don’t but when done well, market research provides a lot of answers that will help you build your marketing strategy, design your product and at times dodge the bullet of a great idea that won’t work in reality.
The truth about pharmacy
It is timely that this article has come about. We are in the middle of some market research at the moment for a pharmacy client that is looking at a specific idea they have had and how the market might respond to it. We are helping them understand that response, shape their idea and eventually their new product (a national first as far as we know) with real data gathered from real customers. Obviously there are limitations to any research and every technique has it’s downsides but being aware of those helps to mitigate them and doing some research is a far more robust way to make decisions that not doing some research.
We can’t share what we’ve learnt about the specific product but we can share a couple of fundamentals that we have learnt or re-learnt about pharmacy. Some qualitative truths (albeit based on a small sample size) that surprised us all.
People who use medicines trust pharmacists to provide reliable advice and really value that advice – Restricted access to other sources of advice, confusing messages in the media and trust in the pharmacist all combine to make the seemingly simple service pharmacists provide really important to people.
In a world where access to healthcare is becoming ever more pressured the immediate access via pharmacy is still widely appreciated and so is the immediate response they deliver. It is an idea that is wheeled out whenever anyone asks ‘What’s special about pharmacy?’ but one that the profession seem to be unable to harness to their benefit in a tangible way. People value not just immediate access but immediate response which really is rare in healthcare. Whether immediate access actually does the pharmacy profession damage in the long run and causes people to devalue that which they can get hold of easily is different question for a different day.
How did we find these answers?
Market research is not rocket science although you do need to think carefully about what you want to know and aim to avoid prejudicing the outcomes by the way in which you enquire. Research can be split firstly into Primary and Secondary. Start with secondary, that is rapidly gathering publicly available information about your line of enquiry that will give you a broad steer about whether your idea has legs or not. In pharmacy you might look at the Joint Strategic Needs Assessment or Health and Wellbeing Board Strategy for example. Using this approach you can assess whether it is worth the time and effort of primary research over a period of hours. In other healthcare professions there are similar sources of secondary evidence.
Move onto primary research and start by gathering qualitative data by speaking to a smaller sample of people directly. You could hold a focus group with your customers and perhaps speak to other stakeholders who may have an interest in your idea. This will give you some understanding of what issues matter to people. Your next step is to delve deeper by gathering quantitative data from a larger sample of people. This can be done in a number of ways, the simplest of which is a survey. The tools are there and user friendly so get going.
The real challenge is what to ask. This will tax you if you do it properly. Start with what you need to know and work backwards to determine the questions that will give you the answers. Consider which people have the answers. There may be some that have very different views that are also useful.
There are a lot of demands on your time. Market research will seem like the long way round to some. To others is will seem essential to help them make better decisions. You can often gather a lot of information that is useful in developing your marketing strategy.