Update: We recorded a very informative podcast where Damjan and I talk at some length about my experiences in the China home healthcare space. We’re told it’s good.
Marketing Strategy Should Be an Early Step
I have a very strong bias relative to the topic of today’s home healthcare in China column: in my experience, foreign companies working in China’s senior care, home healthcare and hospital markets wait much, much too long to develop their marketing strategy. Why is this?
My answer goes back to one of the basic misconceptions, what I call a “China trope” in Rubicon’s executive-level China immersion training that westerners make. Specifically, someone around the table jumps up and says something along the following lines: “I am on the same page as you are about our need to address licensing strategies, human resource development, and training, but when you ask us to already be thinking about marketing I feel like we’re getting ahead of ourselves … after all, this is a HUGE MARKET – can’t we afford to wait until later to start working on a marketing plan?”
This is the “China’s 1.3 billion consumer” error, and it prevents most companies from doing the up-front work on marketing that they should. If you read through some of the recent really well done journalism about the senior care sector in China (Wall Street Journal and Financial Times as just two examples), you can hear in the quotes they grab from western operators a recognition that facility and service utilization is, broadly speaking, running under their projections.
I want to point back to something Jim Biggs said in the great interview he did with us recently. When talking about what had surprised him relative to the challenges of opening a dementia-specific assisted living facility in China, one of the points he emphasized was waiting too long to start a marketing plan. His point is worth re-iterating: this whole class of services is entirely new to the Chinese consumer – they have nothing to compare it against. What this means to western operators in the home health market is they cannot afford to wait, or to under-estimate the complexity and resource needs around educating and selling to the Chinese consumer. There is a regulatory component to this in the sense that if you have pursued one of the available licensing types for home healthcare in China, you are more reliant on referral source development and marketing than other potential types of home healthcare providers in China who would have, as a part of their license and likely JV partner, a captive flow of potential patients.
Let’s break this topic into smaller, more manageable pieces as follows: finding your target customers, identifying the best ways to communicate with them, developing an effective strategy to educate your customers about senior care, and anticipating push-back regarding the need for, and cost of, your services. The first piece, finding your target customers, is so important it is going to be handled as its own column later this week; however, the other three will be the emphasis of today’s column.
Finding Target Customers
A successful foreign home healthcare provider will have thought about not only where they are going to find their target customers, but also how to most effectively talk to them. This inevitably brings forward the idea of social media, which while important, also can obscure an even simpler first step; namely, answering the question of who your target customers trust the most when it comes to big decisions. Yes, about healthcare matters, but healthcare in China is such a fragmented and disquieting topic that your success talking to your customers through their trusted healthcare provider may not be that beneficial. Why? Because they may not have what we would consider a “trusted” healthcare provider – the idea of a family doctor isn’t one that has a ton of traction in China. We’ll talk more about this topic later this week, but the closest you can get in China is talking to consumers through a key opinion leader or well-placed stakeholder within the healthcare system, and on that front you have to be very honest with yourself about the likelihood of that to be a scalable marketing tactic.
Where does trust in China exist between your target market and a professional service provider? Well, here’s a small hint: think about where they go to get financial advice. Go ahead, laugh, but if you were to take your limited market budget and focus it on places where the consumer is most likely to be engaged in sensitive discussions that involve lots of trust, you will be hard pressed to find a more powerful voice than the person dispensing financial advice to a wealthy or upper-middle class Chinese family.
Identifying How to Communicate With Your Customers
Once you have horned your way into that relationship, you have to be able to educate the consumer. And, in a new sector like senior care services in China, that is going to take longer and require more resources than you have anticipated. I promise. A well-rounded educational marketing strategy has five distinct steps that build on one another: acknowledging the signs (that both you and your loved one need help), erasing the stigma (both of your need to get care for your loved one and the cultural stigma around issues such as dementia), illustrating outcomes (showing how western clinically designed interventions can improve your and your loved one’s quality of life), differentiating from the ubiquitous ayi (how your care is more advanced than simple companionship services an ayi service can provide), and normalizing (showing that other people in your situation have had to do this, struggled with the decision, and have found it to be the best decision for them and their loved ones). I won’t go into detail on how to build the infrastructure beneath each of these decisions as that is one of the services we offer as a firm.
During this process, you are going to get a lot of pushback, some of which is going to be all about cost, and more that is going to go unsaid, in an active of almost passive resistance that you, as a western care provider, need to anticipate. What this means is leaving with potential clients materials that are designed to educate them at their own volition and pace. As things deteriorate with their loved one, we as westerners assume they will get to a point as a family unit where they will break and reach out for assistance. I have said more times than I can count to western senior care providers, “do not underestimate the ability of the Chinese family in general, and this current generation of elderly Chinese, to suffer.”
Without going into too much detail, you want to design a marketing collateral strategy around the recognition that as things get worse, the family is likely to turn more inwards than outwards. With that process in mind, you want to be a key resource they have on-hand to educate themselves about what is happening to their loved one, the disease process’ typical advancement and complications to their loved one as well as the family unit as a whole, and how incremental interventions can better the quality of life for everyone.
This is all important and helpful, but it does leave the question of cost as one unresolved and disconcerting point that western senior care operators need to wrestle with preemptively. Since the purpose of this series is primarily home healthcare, I will limit my points to only how to answer the question of cost for a western home healthcare provider.
First, rather than run away from the likelihood that a Chinese family is going to initially try to deeply rationalize care they deem as expensive by help from other family members (if they even exist), and their in-house ayi, embrace this part of how Chinese households are run.
Second, make your service prices clear, easy to understand, and even easier to understand and schedule. Paying for services in China is something of a challenge as the country’s consumers vastly prefer to pay for tangible goods. Consequently, make sure your prices don’t have a lot of strings attached to them, and that you are very clear what someone gets when they purchase from you.
Third, make sure you have a really tight feedback loop between your interventions in the home and the family as a unit (the people who absolutely nailed this have been United Family’s home health business headed up by Josh Kurtzig).
What you are attempting to do in these three steps is initially allow the family to have a sense of control over cost by being up-front about fees and embracing their desire to rationalize care in the early stages of their loved one’s need for assistance, as you build trust with them and gradually show yourself to be worth the expenditure by clearly and consistently communicating with them about services delivered, outcomes, and issues they need to be aware of. Overall, the point of all this is to emphasize one simple point: do not wait for too long to hire your marketing team, and view the marketing position in your company as one of the keys to success, not something that can afford to get pushed down the road until you are “ready” to really sell. This is an entirely new field for the Chinese consumer, and as such, you will need good market intelligence, a lot of trial and error about what works and what doesn’t. You do not want to wait until you have a completed facility to find out that the Chinese consumer isn’t exactly beating a path to your door.
Up next, developing a human resource strategy for home healthcare providers in China. Where does talent exist for home healthcare providers? What are the concerns this group has working for a new foreign company? How can you build recruitment and retention programs with this workforce in mind?