A plastic surgeon from Beverly Hills called me last week and told me that he wanted to rank number one on Google for all of his procedures.
This happens a lot.
I responded the same way as I always do:
“Why?”
Silence.
“What’s your strategic position?”
Silence.
“How do you compete differently than your competitors?”
More silence.
I’ve tasted this silence before. It’s bitter and stale, but all too common.
Like our plastic surgeon in Beverly Hills, most doctors don’t have a strategic position- you don’t compete differently at all. Or, worse, you’re not familiar with the true nature of competition in elective medicine.
Instead, you’re in a race with each other that no one can win:
- You add the same new products and treatments as each other, regardless of profitability or competition.
- You unwittingly adopt the same tactical strategies (SEO,content marketing,social media) as each other out of fear that your rivals know something you don’t.
- You match the same prices, promotions, and offerings as each other without giving a thought as to what your patients truly value.
Little by little, you compromise your strategic positions by venturing into markets where you lack uniqueness.
Everyone’s advantage dissolves.
Today, that ends.
Today, I’m going to show you what real marketing strategy looks like for doctors and medical practices.
Today, I’m going to show you how to create a sustainable competitive advantage in three simple steps using strategic positioning.
Let’s get started.
What is Strategic Positioning?
In a word, your strategic position is your “advantage.”
Or, as marketing strategist Michael E. Porter 0f Harvard Business School contends:
“Strategic positioning attempts to achieve sustainable competitive advantage by preserving what is distinctive about a company. It means performing different activities from rivals, or performing similar activities in different ways.”
Your strategic position is your practice’s competitive strategy:
- It diagnosis your most critical challenges and opportunities
- It defines how you will and won’t compete
- It carves out a unique position in your market by coordinating action in a way not easily replicable by your competitors.
- For example, Ikea’s strategic position is to focus resources on serving the broad furniture needs of a narrowly defined customer segment (price-conscious young adults).
To maintain profitability while meeting the unique needs of their target audience, Ikea strategically coordinates their actions to keep costs low and convenience high: open late, daycare for young parents, no sales assistants or third-party designers to increase costs, immediate pickup of purchases, self-service model with floor displays, and easy furniture assembly.
Like with Ikea, a well-developed strategic position stimulates all successful businesses.
How Do You Develop a Strategic Position for Your Medical Practice?
The nuances of strategic positioning will vary between people and predicament. But all successful competitive strategies incorporate three core steps, as championed by Richard Rumelt in his book Good Strategy/Bad Strategy:
1. Diagnosis
Before your doctor can prescribe a remedy for your ailment, first he needs to diagnose your symptoms, right?
The same goes for your medical practice.
Before you can develop a strategic position within your market, first you need to diagnose the structure of your challenges and define the domain in which you’ll compete.
What’s wrong to begin with, and why?
According to Rumelt,
“A good diagnosis simplifies the often overwhelming complexity of reality by identifying certain aspects of the situation as critical.”
Your diagnosis doesn’t explicitly define how you’ll approach your challenges or what you’ll do to overcome them—that comes later. It merely identifies which of your challenges, when pursued, will provide the most favorable outcomes.
Maybe you’ve defined your audience, but you struggle to meet their needs because of poor management. In which case your diagnosis is purely organizational (internal).
Or maybe increased competition has gradually eroded your competitive advantage, and it’s time to refocus your energy on an underserved market. In which case your diagnosis is dealing with competition (external).
Amassing a list of obstacles that stand between you and more patients is the easy part. But narrowing that list to one or a few critical barriers is what separates good strategy from bad strategy.
Thinking allowed: Focus
If you serve the broad needs of everyone, then you don’t have a strategy. In its marrow, strategy is as much about what you don’t pursue as it is about what you do pursue.
To execute a strategic position, first you need to learn how to say no.
Focus your resources on one or a few critical aspects of your business that will give you an advantage. And say no to the rest. Then concentrate energy towards deepening those advantages, not broadening them.
2. Guiding Policy
After simplifying the complexity of your situation by diagnosing your most critical challenges, develop an approach that will help you overcome impending obstacles: your guiding policy.
As Rumelt contends,
“Like the guardrails on a highway, your guiding policy directs and constrains action without fully defining its content.”
Your guiding policy is neither a long list of lofty goals nor a grandiose vision or mission statement.
Simply, it identifies how you will compete: it sets boundaries and establishes rules that will guide every business decision you make, and it systematically drives a wedge between your practice and homogeneity by exploiting your strengths and your competitors’ weaknesses.
More specifically, your guiding policy determines what you will and won’t do, how you’ll focus your resources, and which trade-offs you’ll make by choosing one way of competing over another.
Thinking Allowed: Difference
Developing a strategic position is neither easy nor obvious. It requires imagination, industriousness, and a prescient understanding of your patients’ needs. Above all, it requires that you deliberately approach your business differently than your competitors approach theirs.
Find an underserved customer segment and tailor your activities to fit their needs in a way no one else has done yet.
Use creativity and ingenuity to think like a new business and discover an overlooked position within your market. Then occupy it.
Embrace change: leverage your patients’ fickleness to carve out a new way of competing.
Be different.
3. Coherent Actions
Without action, you have no strategy.
By mutually supporting one another, your coherent actions focus resources on accomplishing the strategic approach specified by your guiding policy— they define what you’ll do.
Your diagnosis and guiding policy will help ensure that you’re pursuing the actions most critical to your success, but the absence of coordinated execution will drive a stake through the middle of your strategy’s heart.
As Rumelt succinctly expresses,
“The kernel of strategy must contain action… the coordination of action provides the most basic source of leverage or advantage available in strategy.”
For example, it might seem like Wal-Mart maintains its advantage strictly by offering every day low prices. However, when you take a closer look, you’ll discover that every activity Wal-Mart initiates works interdependently to keep costs low, from shipping inventory to managing its network of locations.
If it weren’t for their deliberate and coherent actions, they wouldn’t be able to offer every day low prices while earning a profit. Competitors can replicate Wal-Mart’s low prices, but they can’t replicate the coordinated actions that maintain their profitability.
In this final stage of strategy, decide which priorities will take precedence, and develop the interdependent tactical strategies (e.g. SEO, content marketing, social media, email, paid) that will help accomplish your guiding policy.
More specifically, after you determine which activities you’ll pursue, decide how they’ll interact with one another to create a competitive advantage not easily replicable by your competitors.
Thinking Allowed: Trade-offs
Life is full of compromises: less spending, more money; fewer calories, leaner waist; more work, less free time.
In either scenario, you can’t have both:
More spending = more money? I wish.
More calories = leaner waist? Nope.
More work = more free time? Hah.
Strategy is full of compromises, too.
Doing business one way as oppose to another requires that you make trade-offs in the market.
For example, a plastic surgeon who chooses to meet the unique needs of an underserved senior citizen community carves out a competitive advantage by coordinating his actions to better convenience elders. Any attempt to address the needs of price-conscious patients, for example, using the same set of coordinated actions would prove fruitless since they require a different set of tailored activities.
Trying to compete in two different ways (e.g. attempting to meet the different needs of different customer segments using the same set of coherent actions) will erode your competitive advantage.
Don’t do it.
The Three Distinct Sources That Shape Strategic Positioning
While accomplishing any competitive strategy still requires coordinated action, a deep understanding of the three most common sources of strategic positioning will help you formulate your unique approach.
Strategic positioning, as Porter advocates in his article, “What is Strategy?” emerges from an overlap of three distinct sources: variety, needs, and access.
1. The Few Needs of Many
Many businesses choose to offer only a subset of products or services, regardless of who will buy them. Porter calls this approach Variety-based positioning because it focuses on the choice of product or service (what variety you will and won’t offer), not customer segments.
Businesses that adopt this strategic position ignore the most nuanced needs of niche audiences, and instead cater to a wide array of customers.
For example, a plastic surgeon that chooses to specialize exclusively in facial plastic surgery offers a subset of the total procedures sought by all patients, thereby adopting a variety-based strategic position.
In doing so, the surgeon deepens her strategic position by focusing resources on specialization, not generalization.
And patients who opt to choose her over a full-body plastic surgeon do so because they value her superior expertise- so much so that her patients will split their purchases and go elsewhere for the procedures she doesn’t offer.
2. The Broad Needs of Few
More commonly, businesses will choose to solve all the needs of a hyper-targeted audience. Porter calls this approach Needs-based positioning because it focuses on the broad needs of the customer, not the choice of product or service.
Businesses that adopt this strategic position select segments of customers with different needs, and tailor their coherent actions to fit those needs.
Using our plastic surgeon who caters to elders, by offering comprehensive services exclusively to senior citizens, our surgeon meets the broad needs of an underserved group of patients (elders), thereby adopting a needs-based strategic position.
Because senior citizens require more support, service, and education than you or me, our dentist can deepen his strategic position by concentrating resources on longer consultations, shorter wait times, different payment options, geriatric-trained employees, and handicap accessibility.
Another customer segment might include price-conscious patients (like Ikea). By choosing a needs-based strategic position that targets the price-conscious customer segment, our surgeon would need to coordinate a different set of actions than he would if he were targeting senior citizens (trade-offs).
For example, instead of allocating money towards safer, more accessible accommodations for elders, he’ll likely forgo differentiation of any sort and opt to be the low-cost leader in his market.
To deepen his strategic position, he’ll work tirelessly to reduce his fixed costs as well as his patients’ perceived costs. And all of his coherent actions will support that approach.
3. The Broad Needs of Many in a Narrow Market
Typically, businesses that choose to meet the broad needs of many do so in a narrow market (e.g. markets with small populations). Porter calls this approach Access-based positioning because it focuses on “segmenting customers that are accessible in different ways.”
Perhaps the most creative example of an access-based strategic position in medical is Studio Dental, a full-service mobile dentist that serves the broad dental needs of San Francisco’s burgeoning tech startups. They’re the Uber of dentistry, and their patients include members of Google, Twitter, Dropbox, and Square.
Since San Francisco’s busiest executives often work 80-hour weeks, dentist appointments get shuffled to the bottom of their priority list.
But busy executives have the same dental needs as everyone else, regardless of their busy schedules, right?
Of course.
Studio Dental found a better way to access and accommodate those needs: door-to-door service.
Studio Dental has deepened their competitive advantage by using a unique and valuable set of coherent actions, including streamlined appointment setting on their website and the use of the first “dentist chair on wheels” (aside from the sound of bustling cars, you would never know you were in a trailer).
Who wants to bet that Studio Dental commands a much higher premium for their services than your typical dentist visit?
Conclusion
You can use Rumelt’s and Porter’s respective approaches to strategy for every decision you make in life: marketing, coaching, making coffee, or charades.
And you should.
But now that you understand the mechanics of competitive strategy, I hope that you’ll feel compelled to deepen your medical practice’s strategic position by concentrating resources on what makes you distinct from your competitors.
Instead of falling victim to the deceptive prospects of manufactured growth, exercise discipline and do the hard work of competing differently.
In a word: Focus.
Sources:
Good Strategy/Bad Strategy by Richard Rumelt.
What is Strategy? by Michael E. Porter
Erving
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