The healthcare industry is huge, but it’s not comprised of a single type of entity. There are multiple communities within the healthcare industry—providers, payers, policymakers and patients, just to name a few. I recently spoke with Mike Morgan, CEO of Updox, a Web-based communications platform for independent physician practices to help them eliminate fax costs, reduce administrative time, improve patient engagement and get paid faster from self-payers. We discussed what it’s like to market to the healthcare industry and how it can be different from other markets.

What does Updox do for healthcare providers?

Morgan: We solve a very specific problem that causes a practice a lot of pain: We cut down on administrative costs and waste while improving the way they communicate. The average number of faxes per year per physician is around 12,000-15,000 pages of records, prescriptions and forms. We take away the paper and replace it with simplified, Web-based tools to automate the way they interact with other providers and their patients.

How do you begin when targeting healthcare customers?

Morgan: We start by recognizing that healthcare is not a single market; there are many micro-markets within the industry. You have physicians, hospitals, specialists, labs, etc. You need to look at these micro-markets when targeting your customer. For example, our micro-market is the individual physician. In some practices there can be as few as one to three, but others are as big as 20. These are independent doctors who are not tied to a group.

How is targeting the healthcare industry different from targeting other industries?

Morgan: When you speak with someone in healthcare, you need to talk through their requirements to get down to a finite, granular level to prove you understand their industry. And you need to be super specific about what different types of healthcare organizations do and what the people within those organizations do. They are in a very complex world and you need to make your product or service simple to understand. If they need to take too much time to understand what you are doing, then you will have lost them and the sale.

What do healthcare providers expect their vendors to know and understand?

Morgan: The healthcare industry deals with changing regulatory requirements, insurance companies, government incentives, HIPAA, Medicare/Medicaid and more. Your customers will expect you to understand regulatory and payment requirements. They expect you to know how they run the practice and the workflows within their practice. You must be flexible enough to plug into the different workflows that they have. For example, each practice divides duties within their practice in different ways: front desk, nursing, physicians, back office etc. The division of labor may be different among practices. You can have groups of people that don’t want to change. It could be an admin or it could be the physicians. You need to understand this going in.

So how do you capture their attention, prove you understand their needs and that the change you are offering is small but worthwhile?

Morgan: Can you tell a story in five minutes that they will totally understand? Can you take only 10 minutes to show them how you can save them time and money? If you can’t do that you cannot sell to small practices.

How do you market to them?

Morgan: We start by making it really easy to sign up—no long term contracts. We make sure that what we do doesn’t impact their workflow. Then we show the benefits: particularly how the solutions help them save money and time. Automation of routine work makes an impact too. We start by solving something easy that doesn’t impact other areas of the practice. By starting with one specific problem—making the administrative people happier and more efficient, for example. We are then able to layer new things onto this base, like a new online scheduling program. Baby steps make a difference.

What are some of the changes going on in healthcare that are changing the way small practices operate moving forward?

Morgan: You’ve got requirements like HIPAA and general regulatory compliance, issues like affordable care and a focus on readmissions, plus trends like e-prescribing and telehealth. All of these are impacting the industry and thus the way we need to talk to healthcare industry leaders when marketing to them. All these changes are forcing the medical practices to begin looking at their practices as businesses and their patients as customers. Physicians will need to think about new revenue streams going forward. They are asking questions of themselves and their vendors: How am I reducing cost? What is my customer service like?

And patients are making choices based on whether they can email their doctor or receive a same-day appointment. It’s estimated that 44 million new patients will come into the healthcare system as a result of the Affordable Care Act. The providers know they need to be ready for this.

What should marketers targeting the healthcare industry consider when they are developing programs?

Morgan: Remember that you’re dealing with a complex, resource-strapped world. There is a lack of tolerance for jargon. You need to be super crisp and clear. You can’t be too theoretical. Instead you need to be practical. Use words they understand and show you understand their problems.

When marketing to healthcare, especially the small practices, we start with a quick statement. We make the approach easy; we let them try it before they buy it. We have had success running actual price promotions; people will move for a small perceived price discount because they are trying to save every dollar.

What about referral marketing?

Morgan: Email and case studies don’t have a big impact, they just want to see it and how it works. But in person and at regional conferences, they definitely refer to their colleagues. They have active user groups and they are very open about sharing ideas with each other. Healthcare is a great industry for sharing. So we offer a referral program where both the referrer and the one receiving the referral each receive a free month of service. This has made a big impact for us.

Lisa Dreher is VP-marketing and business development with Logicalis Inc. (www.logicalis.com). She can be reached at [email protected], or via Twitter at @LisaDreher.