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The Importance of Market Research in Your Health Tourism Branding

March 6, 2024
The Importance of Market Research in Your Health Tourism Branding March 6, 2024

“If you don’t know where you’re going, any road will get you there.” – LEWIS CARROLL

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Branding in health tourism, as in every business, is extremely important. Unclear or poorly thought out branding limits success and may lead to failure. Carefully planned and well-executed branding are critical ingredients to success.

Effective branding will help to generate leads, create preference for your destination or your organization, and will help ensure referrals and repeat visitors – customer loyalty.

WHAT DO YOU WANT TO KNOW?

Market research starts with the research question: What do we want to know? If you want to know how many travelers are visiting your destination, this is a question with a numeric answer, so the research is referred to as quantitative. On the other hand, if you want to know why people travel to your location, the answers are motivational and psychological, so the research is referred to as qualitative.

The nature of the research question determines the nature of the answer, as well the method you use to obtain the answers.

HOW WILL YOU FIND THE ANSWER?

How you obtain the answer to the research question is referred to as the research method. There are two main methods of market research: secondary and primary.

SECONDARY RESEARCH

Secondary research looks at information that already exists, such as published tourism data, prior surveys of visitors, collected economic information, and more.

When using secondary sources, it is important to consider:

  • Source relevance is this available information appropriate to my research question?
  • Source reliability is the information from a trustworthy source, and have these results been repeated over time? In the health tourism markets in particular, there are many claims that are very flimsy.
  • Source validity is the information accurate? In market research, we are after the truth, and not just results that will make us feel better or confirm our own opinions!

If you want to know why tourists travel to your location, the only valid source of this information is the tourists themselves (primary research, which if published becomes secondary data). Secondary research in health, dental, and wellness tourism can access a wide array of existing data and information resources (See below on Destination Research). There are many published reports containing quantitative data for health tourism; as with all secondary sources, you must assess relevance, reliability, and validity. The authors have seen many “official” reports that are laden with opinion, bias, and wishful thinking masquerading as fact.

Sample Secondary Sources

  • The International Wellness, Spa and Travel Monitors by Health Tourism Worldwide provide first-hand data and information from hospitality and wellness industry practitioners and operators. See: https://htww.life/references/studies-reports/
  • The Medical Tourism Associations & Clusters Survey by RLA and Laing Buisson collected market intelligence from medical clusters and associations, including insights to the development direction, operational challenges, and intra-organization communication and cooperation among members and partners. See: https:// rlaglobal.com/en/news/medical-survey/ 
  • USA Medical Travel Report 2016 by Irving Stackpole & Elizabeth Ziemba, published by IMTJ summarizes the available data about medical tourism exports from the USA (“outbound”) including volume, valuation, and the role of intermediaries (insurance). See: https://www.imtj.com/resources/usa-outbound-medical-travel-market-2015/ 

APPLES AND ORANGES: HEALTH AND WELLNESS INFORMATION CHALLENGES

The special characteristics of health and wellness markets make data collection and analysis comparatively difficult and complicated.

Destinations may not know which travelers are business vs. leisure vs. friends and family vs. health, and the standards for collecting the information vary widely.

In healthcare, much of the information is personal and/or sensitive, and some of this data is protected by laws and regulations such as Health Insurance Portability and Accountability (HIPAA) and General Data Protection Regulation (GDPR).13 This limits the amount and availability of information.

Also, much of the information about health tourism is considered proprietary, and destinations and providers protect the information rather than release it for analysis.

Many industries have very well-defined boundaries. The automotive industry, for example, includes the design, development, manufacturing, marketing, and sales of vehicles, but does not include fuel supply, filling stations, or repair providers. The production logic and sequence of car manufacturing makes it relatively easy to estimate and measure the performance of this industry. One may argue that cars would not move without fuel, and that therefore fuel is also a component of the automobile industry. Car fuel is, however, considered part of the oil industry or, more widely, the energy sector. If such distinctive boundaries and separating measures did not exist, activities and outputs in the automotive industry would be impossible to compare region to region, and country to country.

PRIMARY RESEARCH

Primary research is the process of producing and/or collecting market information yourself. The simplest example of this is a consumer survey. When you ask customers to complete a survey about their experiences, you are conducting primary research. Examples of primary research include:

  • Direct Observation
  • Surveys / Questionnaires – in- person, internet, mail, phone, or telemetry
  • Interviews – Face-to-Face, telephone, or telemetry
  • Group Interviews / Focus Groups
  • Competitor Observation (Mystery Shopping)
  • The scientific methods of primary research are well developed and go beyond the scope of this Handbook. Those who are eager to learn more can refer to more in-depth resources.

SAMPLING

The first issue in primary research is who, or which group (consumers, customers, prospects, or previous clients – your targets) will you select? This sampling process is important, because if you ask one person, the sample will not be adequate to provide you with helpful information, whereas if you ask thousands of only very happy customers, the results from your sample will be highly biased and your conclusion (“Everyone loves us!”) will not be valid (i.e., it will be wrong).

CUSTOMER SATISFACTION SURVEYS

For health, dental, and wellness providers it is advisable to regularly survey customers, patients, and consumers before, during, and after their experiences. These customer satisfaction surveys will be an important part of your market and marketing research, providing on-going guidance for operations and marketing. In medical settings the customers (patients) are usually not able to evaluate the quality of the surgery or complex procedure, and their ratings will be highly subjective. Survey questions should focus on the patients’ experiences. Many providers use third-party agencies to design, distribute, collect, and report the results of these customer satisfaction surveys.

For destinations, the challenge is different in scale and complexity. See below: Destination Market Research

QUESTIONNAIRE DESIGN: SOME PRINCIPLES

Questionnaires are the most popular choice for data collection from target segments. The creation of a good questionnaire needs to take the following critical characteristics into consideration:

  • What is the business insight we need?
  • How many questions do we include?
  • What kind of scales do we use?
  • How are the questions drafted?

Good questionnaires:

  • Start with easy to answer questions.
  • Contain mostly rating questions, like:

  • Include “open” responses.
  • Organize them the way the customer thinks.

(See: Types of Questions to Avoid.)

The one question most customer surveys should include is “willingness to recommend,” such as:

Responses to “willingness to recommend” questions can be used to create a Net Promoter Score (NPS), which is a sensitive indicator of customer loyalty.

Types of questions to avoid:

  1. Two questions in one: “How did you like the treatment, and would you recommend it to others?”
  2. Impossible to answer: “Would you say that this is the best hospital in the country?”
  3. Unbalanced scales: “Indicate your answer on the scale below.”
  4. Very much
  5. Quite a lot
  6. Somewhat

When reporting survey results, include the number of respondents to the particular question, the average of the rating, as well as the most frequently reported score (the mode). Averages, especially in small response groups, are important but can be misleading.

INTERVIEWS / FOCUS GROUPS

Interviews are structured personal conversations with prospects, customers, clients, patients, or other stakeholders. They uncover how the individual thinks or feels about the destination or the service provider, their motivations, and their experiences and opinions. Customer interviews are particularly valuable to learn what is most attractive about your service, as well as what needs to be improved.

Focus groups are structured conversations conducted with groups as small as 3 and as many as 15. Just as with interviews, focus groups are always structured. Selecting the members of a focus group should be done carefully. And the focus group manager (facilitator) must be skillful at keeping the conversation moving along, avoiding distractions and holding disruptions to a minimum.

MYSTERY SHOPPING

Direct observation in market research often includes observations of the competition. Sometimes referred to as shopping the competition, mystery shopping is used in the service markets to better understand how direct competitors provide services to their clients, customers, consumers, and patients. In recruiting shoppers for this competitive surveillance, it’s important to choose individuals who are the same or similar to actual customers, and who don’t know a tremendous amount about the service being shopped; in other words, not you! Mystery shopping when carried out on your own premises provides useful insights about your own service delivery and approach.

RESEARCH AT DESTINATION LEVEL

Primary research at the destination level is a glaring gap in health tourism. This type of research estimates the economic and social impacts of health tourism. Data collection at the destination level is used for public investment, political, and lobbying purposes and supports cooperation and collaboration in development, e.g., public-private partnerships, support for clusters, and other forms of cooperation. Many government stakeholders have a limited understanding of how to estimate the economic impacts of health tourism. Measuring the impacts of industries is not new. The standards for measuring tourism, for example, are more complex than manufacturing. So-called satellite accounts allow an agreed-upon accounting for something like tourism, without

distorting other measures. For health tourism, satellite accounts strive to measure only the net value added of the activity, therefore preventing double counting. As the OECD’s recommended methodology suggests, the tourism-specific satellite account takes data from the demand-side of the economy (purchases by tourists / visitors) with data from the supply-side (the value of goods and services produced in response to visitors’ expenditures.)

Let’s assume that a guest spends 100 EUR on a massage in a spa (demand-side expenditure). To make this service available, the spa needs to buy materials, hire and train staff, etc. (supply-side expenditure). Assume in our example that the spa’s expenses are 85 EUR. Only the 15 EUR gross profit would be counted as the spa’s added value. The 85 EUR would be distributed and registered at each of the spa suppliers and by the staff.

This allows the estimation of the impacts of wellness or medical activities. This primary research methodology requires the collection of large amounts of data from varied sources. Collecting this information about wellness or medical activities, for example, and the definition of health tourism satellite accounts, is a significant and important undertaking at the local level. The economic impact includes three (3) major benefits:

  • Direct impacts: net tourist expenditures at service providers and facility operators;
  • Indirect impacts: other expenditures at the destination that support the tourists’ activities (e.g., staff salaries at the spa) and spending by the suppliers to the providers in the destination, and;
  • Induced impacts: all other measurable impacts coming from the direct and indirect impacts (e.g., the taxes paid, and money spent by the staff at the spa, the suppliers, and any re-investments by business partners and organizations who share the indirect benefits.)

The key research input for modeling the impact of tourism, and health tourism in particular, at the destination level is how / where money is spent. In the table at right, case #1 suggests relatively high spending on wellness services, case #2 shows a destination with minimal guest spending on wellness interests, and case #3 describes high expenditures in medical tourism.

Mapping these expenditures is not easy. The first challenge is the classification of services. For example, does participating in a yoga class belong to recreation, or sports, or to wellness?

Another of the critical issues is seasonality. Any sound expenditure model would collect spending-related information from guests for a full 12-month cycle.

Systematic data collection benefits destination management organizations, destination councils, clusters, industry associations, as well as individual facility operators. There is significant difference between a health tourist, whose main motivation is defined by the health services s/he purchases and those for whom health is not a main component of the journey. Tourists with incidental health-related spending can become important contributors to the local economy, but they are very different from those whose primary motivations are wellness or medically motivated.

See how a city council and industry association mapped the economic impacts of hot spring-based health tourism here: https://htww.life/references/studies-reports/

SUMMARY

Good market research will help your destination or business maximize its opportunities and minimize risks. Good secondary research will help you understand the size and the scope of the opportunity in the health tourism market segments in which you are interested. Effective primary research like customer surveys, interviews, or focus groups will show you why people selected you, and if your survey segments include prospects who have never been customers, you can find out why those groups did not select you or chose the competition. Mystery shopping will show you how you compare to the competitions, and how you can compete more effectively.

Points to Remember

  • Start with the research question, not with the data collection method.
  • Be focused, selective, and be sure your research offers a return on investment.
  • One form of data collection may not provide the full picture. Consider complementary approaches used in parallel or in sequence.
  • Data and information are collected to answer important questions; make sure that your organization responds accordingly.

 

Irving Stackpole is President of Stackpole & Associates, a marketing, market research and training firm at www.StackpoleAssociates.com. He can be reached for direct consultations at: istackpole@stackpoleassociates.com. Or contact his mobile / WhatsApp:  +1-617-719-9530.

About the Marketing Handbook for Health Tourism 

Health tourism and wellness travel markets are in turmoil. The marketing challenges and opportunities for health tourism destinations and providers of health, wellness, dental and medical services have never been greater – or more complicated! Established destinations and providers of health, wellness, dental and medical tourism are looking for ways to remain competitive, and new entrants to these competitive health, wellness and medical travel markets are looking for the path to success. The Marketing Handbook for Health Tourism offers practical, applicable insights for all these audiences.

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