The Case For Experience Design
Designing unique patient—or customer —experiences has become a top strategic priority for many healthcare institutions and service-based organizations that operate in a vast sea of sameness.
While this need is broadly recognized with plenty of nodding heads in senior leadership meetings, it’s also true that securing necessary resources to achieve it is often an uphill battle. It’s quite common to run into savvy, results-minded leaders such as chief financial officers, facilities managers, or chief clinicians who challenge the financial soundness of investing in experience design.
Such concerns are important. After all, the customer experience is just one of many competing business priorities. Every dollar invested in improving the current customer experience is a dollar taken away from other important areas, such as adding new technologies in clinical treatment or funding for research. It’s hard to argue against this reality.
Today, healthcare systems evaluate customer insights using data sources such as patient satisfaction scores, market surveys on brand awareness, and complaints or compliments filed with a patient relations department. While these methods are certainly useful for identifying where to focus, they don’t truly indicate (1) how experience is impacting business or (2) how to generate holistic solutions that will improve experience.
Without results tied to tangible business goals, the investment needed to enhance the customer experience will inevitably make its way down the priority list. But evidence shows that, when properly implemented, a differentiated customer experience can have a tremendous pay-off and also mitigate business risks.
A multi-industry customer experience study by Watermark Consulting in 2015 measured the eight-year performance of companies included in the Forrester’s Customer Experience Index, an annual benchmark of customer experience quality. Even considering the impact of recession years, companies that were considered leaders in customer experience outperformed the broader market, generating a total return that was 35 points higher than the S&P 500 Index.
Healthcare is intrinsically an experiential business. People walk in expecting clinical excellence from their providers, but what they mostly remember after they walk out is the service provided. Hence, the quality of the experience is a tangible differentiator for many consumers who can’t discern differences in clinical acumen.
Customer Lifetime Value
Customer Lifetime Value (CLV) is an important metric traditionally used in consumer-facing industries, because it measures how much customers spend over the span of their relationship with an organization. Acquiring new customers is more expensive than retaining them. The quality of an experience has a major impact on driving loyalty and revenues. In fact, according to a study from customer experience management company Medallia Inc., published by Harvard Business Review in 2014, customer experience is a major driver of future revenue and loyalty.
The unique nature of the healthcare business means that insurance networks, physician referrals, and specialists will drive much of the business, regardless of experience. Still, even if that’s how a patient found a provider in the first place, that doesn’t mean that they’ll continue to seek care there indefinitely or seek out additional service offerings that go above and beyond the most critical needs.
A favorable experience will create an opportunity for a bidirectional relationship between the organization and the patient and immediate family that could extend to relatives, friends, and, in some cases, to future generations. In other words, it pays to create a customer experience that will drive an enduring relationship.
In the business of healthcare, the best marketing is word-of-mouth stories and explicit referrals. It’s said that people tell, on average, seven family members or friends about their best or worst experiences. In today’s social media-driven world, this number increases significantly. And, aside from building an institution’s prestige, investments in improved experiences actually reduce the overall cost of serving customers. Correcting service mistakes, winning back upset patients and families, and responding to bad publicity are expensive and time-consuming.
The Millennial factor
Millennials are the largest generation in U.S. history, and they make decisions differently than previous generations. Millennials are alpha-influencers across generations who don’t hesitate to share information about a good or bad experience. They expect everything about a brand—from the app interface to the design of the physical space to the end result—to reflect its values.
According to a survey conducted by Harris Poll for Eventbrite in 2014, 72 percent of millennials prefer to spend money on holistic experiences rather than things or discrete events or transactions. Given all of this, many industries and companies are paying close attention to creating positive, millennial-oriented experiences. Healthcare should, too. For example, ease anxiety without being condescending, communicate early and often, and provide the opportunity to choose from options throughout a journey so it’s personalized.
Talent and funding
From a talent acquisition perspective, it’s important to remember that millennials value personal alignment with brands as much as monetary incentives, if not more, when it comes to choosing their employers. Being part of an organization that sparks positive emotions among customers via holistic experiences makes any employee proud and offers motivation to put one’s best foot forward. Philanthropy works similarly, as great experiences can lead to better narratives about why an organization is special, which can lead to an easier time securing dollars from donors.
High-quality experiences can give healthcare organizations a competitive edge, and it’s critical to start measuring new customer data points and addressing opportunities concurrently. Evidence shows that thoughtfully designed experiences also drive brand preference, loyalty, and customer willingness to spend, thus impacting the lifetime value of customer relationships.
In the digital age, word of mouth can be a major asset in promoting a brand or an expensive liability if appeasing unhappy customers or recovering from widespread bad publicity. Remarkable customer experiences help mitigate these risks. For these reasons, investing in experience design should be considered as a smart financial decision and important piece of an overall market strategy.