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McDonald’s and Delivering Medical Group Value


Value is what’s important to your customer. Not to you.

In October, McDonald’s reported that their third quarter 2014 profits are down 30% from last year.

McDonald’s head of U.S. operations announced the “fix” for the sales slump: “We must and will win with our food.” He said that McDonald’s wants to be more “culinary-inspired.”

But is it actually the food that is important to a McDonald’s customer?

From an economics viewpoint, value is receiving more than what is given up in exchange. That’s why a customer or a client or a patient buys.

And, of course, from the seller’s viewpoint, what it delivers has to be of lesser worth to it than the price received — that’s the seller’s value.

But there’s no “chicken or the egg?” question here. No matter what the seller thinks of the value proposition offered (the food, the level of service, the packaging, etc.) there’s not going to be any exchange unless the customer first perceives value from the buyer’s perspective and buys.

So, what’s this have to do with you?

You’re selling medical services and despite the involvement of government payment programs, insurers and ACOs, you’ve got one or more customers and they’re all looking for value.

Medical groups lose contracts because they focus on what’s important to them before they focus on what’s important to the customer, be it the hospital, the referring physician or the patient.

I see this all the time.

A group’s exclusive contract relationship with some hospital is in trouble, but it claims that it delivers the world’s best medical care. The problem in that in the context of the contract, the customer is the hospital, not the patient. So while the quality of the care is important, so too are many other aspects, from stipend support, to referring physician satisfaction, to, well, the list goes on and on.

That’s why at McDonald’s the food is only a part, and I’d say a very small part, of the customer’s value equation. Speed of delivery, price, cleanliness, and friendliness of the employees are all very important pieces of the puzzle.

After all, if what I want is really good hamburger, I go someplace else.

McDonald’s isn’t selling hamburgers, it’s selling their version of a hamburger and their other offerings wrapped in a larger experience. If that value proposition is attractive to me … I have to get off the freeway, eat something fast and get back on my way…then I’m a customer. That has little to do with the food.

You can swear all day long that your medical group is now the equivalent of “culinary-focused,” that is, quality focused, but if the value to your customer lies somewhere else, your meat will just be getting cold as the hospital or referring physician or patient goes somewhere else for what’s important to them.

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