Private Duty Home Care
Marketplace Myths
When it comes to promotion as a limiting factor I hear
several excuses frequently. I want to put a few myths to bed once
and for all.
- Myth #1: Your
market is saturated.
- Myth #2: Your
market has too much competition.
- Myth #3: The
economy is hurting you.
Market
Saturation: Market
saturation occurs when supply and demand are balanced. This means
that every person who needs a given product is able to purchase it, and
the companies who supply the products are able to maintain inventory of
the exact amount needed. The only way for these companies to
continue growth is to capture market share or identify new markets.
An
example of this would be the breakfast cereal industry in
America. Three major companies, Post, Kellogg's, and General
Mills control this industry. The number of people in America who
eat cereal for breakfast is probably not likely to increase or decrease
dramatically. The growth is limited to the growth in overall
population. Therefore, the only way for these companies to
dramatically increase revenues in cereal is to steal market share from
their competitors. For this reason advertising is heavy and
competition is fierce.
Market
saturation has not occurred in the home care industry. First,
demand is increasing heavily. The American population is growing older
every day, furthermore, this population is getting more comfortable
being cared for by organizations rather than family members. It's
unlikely that market saturation will occur until this trend
stops. The data tells us that our population should continue
aging until at least 2030. Don't worry, if this happens 22 years
from now, you'll read about it first in Private Duty Today.
Increased
Competition: Yes,
competition is increasing. This, however, is a bad excuse for
your poor marketing performance. If you've been in business 10
years, and last year 10 new companies were launched, shouldn't you have
already established a strong marketing position. Even if all
marketing was equal, you should still experience growth proportional to
the demand. If your growth has slowed or stopped, it's not
because of your competition. Demand for your business is
increasing, and your competitors have less experience than you
do. If you're losing market share it's because your competitors
are beating you in the marketplace. If you're simply maintaining
market share, your business would still be growing because demand is
growing.
The
Economy is Bad, but Not for You: If you haven't
noticed, the economy needs stimulus. President Bush and Congress
are writing us checks and telling us not to put them in the bank.
This
brings me to our third myth, "My private duty business is slowing
because the economy is slowing."
I'm
going to tell you this as delicately as I can put it. Your
economy has not slowed. Gasoline prices are up. This drives
the food prices. This makes us purchase fewer automobiles, build
fewer homes, and take shorter vacations. Outside of tourism, the
service industry usually trails the economy. Here's why.
Your
workers are less likely to quit. They know that jobs are a little
more difficult to find. Currently, however the unemployment rate
is about 5%, this means that 19 out of every 20 people that want a job
have one. This one person in 20 probably works for an automotive
company, a transportation company, a housing manufacturer or
construction company. They didn't work for the local hospital,
nursing home, or other service provider. People aren't yet going
without essential services; they are saving money in other ways.
They are spending less discretionary income.
The
private pay home care economy may actually be growing!
What
we know about private pay home care is that this is an essential
service for people who can afford the luxury. Wealthy families
are less impacted by high gas prices, at least proportionately to their
income. A smaller percentage of their income is spent on
gasoline, utilities, and food. The impact on their personal
economy is lessened.
Furthermore,
let's examine the sources of their income. Many of these
individuals are small business owners. Small business owners have
a tendency to work more, not less, during a slow economy. Before
your local construction company owner gets laid off, he/she are laying
off workers. Personally, they are working more hours than ever
because their income depends on getting more contracts.
When
small business owners are forced to work harder for their money, this
is good for the private pay home care industry. Their parents and
disabled children still need care, and when your local housing
contractor is working 16 hour days they are more likely to spend money
on home care.
The
primary market for private pay home care are families who have large
incomes that depend on a highly paid professional. These highly
paid professionals, physicians, attorneys, business owners and
accountants recognize that paying for family care allows them to work
more hours. Even if their personal economy is threatened, they
are more likely to increase their own workload than cut back on
essential expenses.
No
more excuses,
you must take personal responsibility for improving your
promotion. In the next issue of Private Duty Today we will
focus on when, and how, to stimulate your marketing.
|
