Get the Inside Scoop on Your Market Through a Competitor Analysis

predictPerforming a competitor analysis is key to helping an urgent care business achieve success in what is considered to be a saturated market.  Examining competition location, practices, and patient volume is a good way for an owner to know what works and apply it to their own business in order to remain on top in their community.

Nathan Palmer, Vice President of National UC Realty says that in such a competitive market, now is the best time to create a competitor analysis to help better position one’s urgent care business.

“Whether you are looking at opening up or you exist, I think it is important to understand the competition of the marketplace and understand how they compete relative to your service offering.  Obviously there is a lot of versions of urgent care and what type of complimentary services different companies have, but I think it is always important to know and always important to stay updated with it.  This means constantly being aware of what is changing in the marketplace and ultimately how that is effecting patient flow and things like that,” Palmer says.

Alan Ayers, Vice President of Strategic Initiatives with Practice Velocity  stresses the importance of creating a competitor analysis and says that in some areas of the country, namely the affluent suburbs of major cities like Dallas, Washington DC and Chicago, urgent care has become “overbuilt” meaning new entrants must take market share from existing players and existing operators must maintain a loyal patient base in the face of this new competition.  In addition, Ayers adds that urgent care has become somewhat of a “commodity” offering; meaning few urgent care centers have really differentiated their brands and service experiences and that consumers tend to see all urgent care centers as being equal in quality and service.

“This is very different than in retail, in which retailers differentiate from one another through everything from their facility design, to products and pricing, to customer-facing technology, to policies/procedures and customer service philosophy.  While consumers can readily describe the differences between Walmart and Target, between McDonald’s and Chick-fil-a, and between the Apple Store and Best Buy…few patients can really differentiate most urgent care centers.  If urgent care is to create a brand and patient experience that stands out in this “sea of sameness,” it must understand what its competitors are offering.  That starts with a competitive analysis,” Ayers says.

What to Examine 

According to Palmer, a large part of the beginnings of a competitor analysis is verifying the type of urgent care.

“Is it a full on competitor of what you do, is it some type of health group that also does urgent care but maybe doesn’t have evening or weekend hours.  There are a lot of different classifications.  For example, a CVS or Walgreens will have similar hours like an urgent care but no X Ray or really only able to handle minor issues and not be able to do most of what an urgent care will do,” he says.

Ayers confirms that urgent care is a consumer-driven delivery channel for episodic health care services.

“Urgent care differs from primary care and the emergency room in that it seeks neighborhood locations near patient homes and places of work, it offers extended night/weekend hours that align with patient’s busy schedules, it offers walk-in convenience with short wait times, and it should have hassle-free registration and billing processes,” Ayers says.

“Because how urgent care interacts with the consumer is what differentiates it from other health care delivery channels, competitive analysis should focus on how a center interacts with the end consumer.  For example, how convenient and visible is the location to commuting traffic patterns, how accessible is the center in terms of operating hours, how long are patient waits and throughput times, how much is a cash pay visit and what are the front-end collections policies as far as co-pays and co-insurance?  In order to win patients, create loyal fans, and spur positive word of mouth…every way that the urgent care interacts with patients should be considered relative to competitors.”

Palmer explains that location matters and  understanding the saturation of the space relative to population density is a factor to look out for.  Another component is looking at the overall healthcare access, not just urgent care but also the relative density to a potential location’s general practices, primary, internal type physicians.

“Many years ago when this was just starting there was a lot of blue ocean type space.  A lot of areas with good density, good income, good insurance mixes and no competition.  In today’s world, most of that doesn’t exist, and now what people are really evaluating is who and how competitors operate in the areas they are interested in,” Palmer says.

“Now, what is super relevant is location positioning and how competitors are located in the trade areas.  We have worked with many groups who, if looking at an area and competitors aren’t in the retail corridors, near a major grocery anchor or with good visibility, signage, traffic, they will go ahead and get a center down in immediate proximity to a competitor they could potentially out position.”

William Williams, COO at 7 Day Clinic adds that position when examining a competitive market is a key area to focus on because a successful center can attract positive patient traffic due to the ease of location.

“I think they appreciate that from the time they take the few steps from their car to our front door. Convenience is very important,” Williams says.

“Location does matter.  It needs to be associated not only with residential property, but with commercial property.  But, if it’s directly in a commercial setting, I think that is more of a challenge.  It needs to be close to homes as well.”

Ayers supports Williams’ comment by stating that before starting an urgent care center, there should be a complete assessment of the environment.

“This usually takes the form of a SWOT analysis—strengths, weaknesses, opportunities, and threats.  If a market is over-built and/or there is an extraordinarily strong competitor in the market, an entrepreneur might want to consider a different market because it may be difficult to attract loyal patients away from a practice who is doing everything well.  On the other hand, if the competition is weak or inept, it shouldn’t be a deterrent to being in a market—the attitude should be to do things better and to “win.”” Ayers says.

“Analysis of the competitive environment should be constant and ongoing.  An urgent care operator should be constantly on the lookout for changes and innovations made by competitors and then figure out if those things fit with their practice.  It’s not necessary to always be the first to introduce something new to a community—let the competitor take the risk and spend advertising dollars to educate the public—but if the competitors doing something that works and you’re not…it can cost you business long-term.”

How to Complete a Competitor Analysis

Ayers says an analysis is performed by first defining the criteria by which the owner is going to evaluate the competitor.

“These criteria should be things that are important to the patient.  Sometimes what’s important to an urgent care operator may not necessarily be important to consumers.  For example, evaluating whether a competitor has a CLIA-waived or COLA-certified lab…patients most likely don’t understand or care about those details.  But a patient does care whether you can treat their condition and whether you’ll get them in-and-out quickly,” Ayers says.

“Information may be gathered by looking at publicly available materials, such as their website and advertising collateral, by conducting focus groups of consumers from the community, by polling your own employees, by interviewing their employees who apply for open positions, and by secret shopping the competitor as a patient.  Secret shopping is probably the most insightful because you get a complete view of the patient experience, from the end user’s perspective.  You can learn the competitor’s registration processes, understand their financial policies, see the flow in their clinic, evaluate the condition and upkeep of their physical facility, evaluate how well their systems support the patient encounter, and you get a first hand glimpse of their culture, training, and customer service orientation.  If presenting for a legitimate medical concern—such as sinusitis or allergic rhinitis—you can also get an understanding of the competence and detail of the medical staff by the thoroughness of the history and physical conducted and the accuracy of their diagnosis and treatment plan.”

Ayers warns that if competitors catch on that they are being analyzed, they may act defensively.  When calling to inquire about specific services, pricing, hours, etc. Ayers says it may be wise to use a cell phone  as opposed to the office land line due to caller ID.

“If it’s a local competitor, it’s probably best that a principal or leader not secret shop the clinic but instead send a friend or family member.  A competitor may act defensively if they see you take photos or if you ask too many questions or seek details beyond what the typical patient would ask.  So discretion is required.  Also keep in mind your competitors are also checking you out,” he says.

If you have an interest in learning more about the subject matter covered in this article, the M&A process or desire to discuss your current situation, please contact Blayne Rush, Investment Banker at 469-385-7792 or Blayne@AmbulatoryAlliances.com.

 

 

 

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