Webinar

What AMC's Can Learn from Luxury Brands

Many AMCs are going through a profound change in their business model, expanding their offerings and value beyond their sweet spot of high acuity, complex care. But in the process, they are encountering a wicked branding challenge: How do you expand your brand positioning to capture broader value without diluting your core differentiation? Interestingly, AMCs can be seen as the luxury brand in their respective markets, and there’s much we can learn from how luxury brands have tried to expand their brands to mass market audiences to help AMCs tackle this difficult challenge.

This webinar will be hosted by Chris Bevolo, thought-leader and author of “Joe Public Doesn’t Care About Your Hospital,” and Christian Barnett, a brand strategist who’s worked with Davidorff, Remy Martin and Coutts.

 


Transcript:

Chris Belovo: All right. Thank you, Chase. Welcome everybody. Thanks for joining Christian and I, we're very excited to have you today. We think this is a really interesting topic and we're really excited to come at it from the angle we're going to. Which is, thinking about one of the significant challenges that those who are responsible for branding AMCs face through the lens of luxury brand. So, as the title of the Webinar says, this is what AMCs can learn from luxury brands. You're going to hear us talk primarily about Academic Medical Centers and Academic Health Systems, and we'll use AMC as shorthand for those. But we think there's also lessons in here for any other hospital or health system that occupies the position as the premier brand and its market, so a lot of times that can be a children's hospital, sometimes that can be a non AMC.

Anybody who is seen as the health system or hospital in a market where you'd want to go for the most complex, difficult care. Now, anytime that there's an AMC in a market usually it is the AMC, so that's how we're focused on those folks today. But for those of you from other systems that fit that bill you're going to find some lessons in here as well. What we're going to do is we're going to spend a few minutes just kind of setting the stage with the issue that we want to talk about, and I think that's going to be familiar to most of you. And then Christian is going to give us some background on luxury branding, just to kind of set the stage. And then walk us through three ways that he and I think we can learn from luxury brands in order to address this issue that we're going to dive in today for AMCs. And then as Chase said, we should have time for Q&A at the end, and we also have kind of a neat little offer at the end if you want to take us up on it. So, that's how we're going to spend the next hour, glad you're with us and let's dive in.

The Classic AMC Brand Position

We really want to start with kind of the foundation for all of this which is the classic brand position that most AMCs find themselves in and have been in for years, and years, and years. And that is, again, not in every case, but in most cases, AMCs occupy that position in their market as the place to go for the most difficult, complex care. Because when you're talking about healthcare, and you're talking about the most difficult complex, that really is in many cases the premier brand position in any given healthcare market. So, AMCs are given credit for having the best specialty care, particularly in areas like Oncology, or Cardiology, or Neurology. They are typically given credit for having the best doctors. We know that they are innovators in research. They're typically given credit, and again, this is based on consumer research that we've seen over, and over, and over, for having the most innovative technology, the most advanced technology.

So all of those things bundled up really are what make AMC's special, it's what makes AMCs unique, and it has been how AMCs have primarily positioned themselves understandably over time. What we're looking at though, is a real shift in the industry over the last five or 10 years that's causing a significant threat to the business model of the AMC. A lot of that is based on the dampening of inpatient care that we've seen for all kinds of reasons. You see a statistic down here, that's from 2014, we know that this trend is continuing. We're seeing care move out of the hospital setting and into the doctor's office, into outpatient settings, into retail settings, and actually in home care, and we see that trend continuing. This makes things particularly difficult for AMCs which traditionally have been overly dependent on inpatient care. Again, when you think about what they're known for, that high-level complex care, most AMCs especially over time, basically consisted of the Academic Medical Center itself. Oftentimes, a Cancer Institute and a children's hospital, all very inpatient focused facilities.

Obviously, as we're going to talk about some of them expanded beyond that, and that's part of the challenge we're going to look at. You also see a threat to the financial model based on reimbursement squeezes, we see AMCs typically have been reimbursed at a higher rate for a lot of the things they do, and that still continues today. But we're seeing pressure on that from the government, we're seeing pressure on that from private payers, and we see the pressure on hospitals overall from sectors in the healthcare industry such as Bio, or Pharma, or Med Tech, all of whom have as their mission try to keep a lot of the hospital with their products. You've got accountable care, population health, all of these things kind of combining to threaten the business model of the AMC to the point that we had a client CEO once say, "Hey, if we're not careful, we're just going to end up as a giant ICU."

Now, we're always going to need ICUs, we're always going to need that kind of care. Don't think that's going to go away anytime in our lifetimes, but obviously it becoming simply an ICU and not doing anything else, or being valued for anything else, would have a real dampening effect on the growth goals and success goals for both AMCs. So, to combat this many AMCs had been shifting their business model over the last five plus years, and you're going to hear us talk about the Acuity Model a lot here. When you think about the Acuity funnel, so it's a classic funnel, at the top of the funnel is how people typically enter the health care system. Top of the funnel is primary care, urgent care, virtual care, retail care, even just preventative issues, health issues, that type of thing. As you move down the funnel, you get into specialty care, surgical care, then you get into tertiary care and quaternary care.

AMCs are valued and really stand out at the bottom of the funnel delivery. Specialty care, tertiary care and quaternary care, which only AMCs deliver. What we're seeing is because of the threat to that business at that end of the funnel, the expansion of the business model, the expansion of the value proposition by AMCs up funnel. And there's a number of ways that they're going about this. As an example of Vanderbilt University Medical Center, one of the significant ways that they've sought to diversify their value proposition so they're not so overly dependent on that complex bottom of the funnel care is by creating a multi-state, regional really CIN. So, Clinically Integrated Network, where they are partnering with dozens of other providers ranging from small physician practices, to larger hospitals and even health systems in other states, so they can deliver their care through those providers. That's how Vanderbilt is trying to diversify by offering more top of the funnel access points through other partners. They're doing other things as well, but that's a significant way that you can move beyond that high-level complex care.

Penn State Health is another example in Pennsylvania where they have partnered with Highmark, which is the largest insurer in Pennsylvania, and together they have committed to investing $1 billion in the expansion of Penn State Health in many ways. Some of that is geographic expansion, so building community hospitals. A lot of it though is that top of the funnel expansion, whether that is acquiring small physician practices, opening up urgent cares, Micro-hospitals, Freestanding EDs. Another way that we see AMCs trying to diversify and expand their value proposition. And then finally to have a system like Stanford Medicine, that is doing many of the same things or has been that Penn State health is planning on doing, but has done a lot of that organically. So again, expanding geographically, acquiring physician practices, opening specialty centers, outpatient centers, clinics, and so on.

All three of these are kind of different approaches to solving the same problem, which is this threat to that high-level bottom of the funnel complex care. Understandably, we see these AMCs wanting to continue to thrive, but in doing this it introduces the problem that we're going to talk about today.

How do you build brand without diluting your core differentiation?

And that's a problem for those of you in Marketing, Communications, anybody who's responsible for building that brand at an AMC. And the problem is this, how do you continue to build and expand your brand value without diluting your core differentiation? So, if you're an AMC and you have traditionally been known and valued for that high-end complex care. And now that you are moving outward, you're expanding to that top of the funnel offering, so retail care, urgent care, primary care, all those things, how do you then get credit for those services because you desperately want people to come to you for those services? How do you get credit for that when you're known for the opposite of that, which is high level complex care?

And then you can flip it around and see the challenge from the other way too. You have to be careful that if you move too far up funnel and try to get credit from a brand standpoint for those top of the funnel services, could you dilute the very thing that's made you special and unique all of these years, which is being valued for that complex care? So it's a real conundrum for AMCs, and that's really where we kind of turned to the luxury brand model. I think what's great about this is, Christian joined our firm last year, and he's kind of the Ying to my Yang. I have spent the last 20 years focused only on hospitals and health systems, so I have seen this issue, I have worked with many AMCs, I've studied it, we've helped AMCs with this issue. I've dove maybe a mile deep into this kind of issue. And then Christian comes in from outside of healthcare and you heard all of the brands that he's worked with. We're huge advocates for both having that deep expertise that you need to understand the business challenge, but also trying to bring in fresh thinking.

This is a perfect example of that because Christian and I were talking about one of our clients in regards to this issue and he just said kind of out of the blue, "This sounds an awful lot like how luxury brands have to deal with expanding their market without diluting what makes them special." And I said, "Yeah, that's exactly what this is like." And I don't think I've ever heard anybody talk about AMCs in the same context as the luxury brands. We dug in and really learned a few ways you're going to hear today about how luxury brands go about expanding their market and their revenue and all those things without diluting the brand. And there's a lot of these things we can learn and apply to the AMC situation we just described. I'm going to turn it over to Christian, he's going to give you some background on luxury brands and we're going to dive into those three ways that we talked about. Christian?

A short introduction to luxury branding

Christian Barnett Thanks very much. Hello everybody. And I like being the ying to Chris's yang, it's like Ernie and Bert stuff. Before we really look at the specific learnings, might be worth just taking a step back and doing a kind of very short introduction to luxury branding and what that's all about. And then we'll start applying that to that to the question for today. I love working with luxury brands, they're really interesting. Brand theory says that in markets where we can exercise any degree of choice, that choice says something about the person making the choice. So decisions we make in choice situation say something about us, whether it's buying a car, or buying a phone, or a health plan, or a hospital, or laundry detergent. That's kind of one of the underlying kind of tenons of this. How we choose top-end brands, products or services, luxury premium brands is particularly interesting. Because it's when, quite frankly, humans are at their most emotional and their most irrational.

And if we think about some of the brands we're going to be talking about today, alcohol, or perfumes, or even water brands, the cost of goods, the cost of production, is actually very low, but the cost of sale is exponentially high. So what is being sold? What's being sold is something which happens in our minds and our hearts which we project onto the things that we buy. And I just think it's fascinating. Some of these products which are genuinely the best, but the price that we can charge for them and the price that we pay to make them are so different but people are prepared to pay them. There's something going on in the psychology of humans and it's deeply embedded, which is about emotion and not always making the right rational choices. If you can abide that notion of how brands and choice in market's worth, then let's go onto the next little bit.

I'm going to talk a little bit about surface and substance. Luxury brands are not all about surface, they have intrinsic qualities. But let's talk a little bit about the surface, first of all. The surface is a look, it's a logo, it's a feel, it's a way of showing up and presenting. Think about the Burberry pattern and then think about it in kind of strange places, like think about it on the front of a refrigerator, or perhaps on a glass, or on a shampoo. And what would that do to your perception of that product? It's interesting to think about that. Whether it's the Louis Vuitton pattern or the CC of Coco Chanel, or even the Tiffany color, think about what that does, what it connotes, and think about it in strange places and think what that does to get your perception of it. That's the surface, the substance, now, the substance is really interesting. Often these luxury brands come from somewhere which has got deep craftsmanship or deep stories, whether it's the founder, or the ingredients, or the process.

But it's the thing that enables them to be luxury, and it's often the story that people rationalize to themselves for purchase or tell to other people. You can imagine yourself in a cocktail bar having ordered the latest botanically-rich foreign gin, exotic gin from juniper berries and explaining that to your fellow drinkers, and them all looking at use as though you know more than that they do about the particular sector. It's a way of demonstrating your status, not to yourself, but also to others. So here's a couple of great stories, I like these back stories so much. I don't if you've seen in the news recently, but people are shooting at icebergs. And the reason they're shooting icebergs, it's because in the icebergs is deemed to be the purest glacial water which has been in the icebergs for thousands of years. And in that way, it's the purest water on earth and it's bottled, it's sold by iceberg water for $12 a bottle.

It's interesting. I was looking at coffee brands, the most expensive and exclusive coffee brand in the world is called Black Ivory coffee, retails and more than $500 a pound. It's from Thailand. The coffee beans are fed to elephants who digest and excrete for a more robust flavor. What do you do? But it may be a fantastic flavor, it may be the best flavor on the planet. Some people think it's worth that much, I guess it's like buying art. The price is what people put on it, not necessarily what it's actually worth to everybody. And I think things like Chivas, they talk about their icon which has been found in ghost distilleries, distilleries which have been closed down, but the product are there. So it's a limited edition, limited is ... we'll come onto that in a minute. And things I know, another favorite of mine is Philippe Patek ... sorry, Patek Philippe, whose watches if you've seen those advertised, the advertising, is not owned by you, is merely to be held for the next generation. That's a lovely little story that really works in a certain way.

When you think about luxury brands, it's not just the logo and the pattern on the surface, it's also the substance and the story behind that. So one last little intro for this little one-on-one on luxury and then we'll go back to the subject at hand. I think luxury has been really interesting because it too has faced challenges and it too has had to adapt over the last century and a half. I guess luxury didn't really exist a couple of centuries ago, but it's really had to adapt to changing market conditions. On the left hand side, let's look at a couple of things. Old luxury, scarcity, scarcity of ingredients, scarcity of product, scarcity of production because it just wasn't possible to produce at scale. Because a lot of these products were handcrafted by real skilled people, it was specialists, and now ... We'll contrast that with now, but for example, MA’s made originally harnesses and saddles for horses. Burberry, was originally just an officers trench coat in the First World War. Montblanc just made pens.

So old luxury was very much about specialism, and we've seen this is where it starts to become germane to AMCs as luxury brands have had to look for market share elsewhere. Where have they gone to find that? It was also rarefied in terms of price, it was expensive if you paid a premium. Often it's not the price specifically that matters, it's what the price stands for. Luxury nowadays, new luxury you might call it, it's kind of there's the artificial scarcity. I've come across stories of limited ... where you will see limited editions and exclusive runs or additions because there's a real premium on trying to create exclusivity or limited edition. You sometimes hear of people holding product back to create artificial demand to make it more exclusive. As I said a minute ago, often luxury brands nowadays are more lifestyle brands.

They may have started in one place, but they looked to expand and create market share in sibling or adjacent categories. So if Hermes was really about leather craft, well, can you leather craft the horses , whereas can you apply that leather craft, purses, shoes, other clothes, belts, et cetera, et cetera. So there a natural places to go to. And lastly, luxury is heavily segmented. Nowadays as luxury brands look to get more people in their franchise, they not only look for other siblings or adjacent territories or sectors, they look for ways to bring people into the luxury funnel in ways as well. And we'll come and talk about those in a minute or two. There's my little introduction, one-on-one to luxury.

Three ways luxury thinking can help AMCs

Now let's switch a little bit to how does that affect, what are the implications for our thinking around AMCs? We'll talk a little bit about partnerships and collaboration, we'll talk a little bit about what we've called a vertical extension, which is really about making the brands more accessible through that funnel or something like that. And we'll talk about horizontal extension, which is really about going to other sectors and other places of competence and where that can be done.

Partnerships and collaboration

Why don't we start off with this one, which is a partnerships and collaboration. Now, the slide here you can see is a celebration of Louis Vuitton's artistic collaborations, and one exhibition is on right now. So if you hot foot it over to Los Angeles, you might see it. It's got a month to run. And that's really where Louis Vuitton celebrates all the collaborations that they have done over the last 160 years. And they have collaborated with famous designers like Vivian Westwood, or Frank Gehry, or Karl Lagerfeld, or Christian Louboutin. So that's one way that collaborations work. Louis Vuitton have also collaborated kind of high out of sector, a good example is a great collaboration with BMW. A really high-end BMW car retailing for about $150,000, you can buy it with a $20,000 worth of Louis Vuitton, perfectly-sized luggage to go into the truck.

So that's a great example where the two brands work together and the trick here for these sorts of partnerships and collaborations is that both sides get something out of it. And we think about some other interesting collaborations like a Target and the collaborations they've made. Target gets the aura or the halo of design around it and the designers themselves get a greater X, they get great access to a greater size market and get a little bit more awareness and knowledge for them. So that's how that works, that first one. And I'll flip it to my Yang here, and Chris will talk a little bit about the implications for AMC.

Chris Belovo: So where do we see this idea of partners and collaborations come up in the way that Christian was talking about? I think a great example is one we've already mentioned which is Vanderbilt and what they did with the Vanderbilt Health Affiliated Network. So many similarities between what they've done in what Christian described with Target, I'm based in Minneapolis, so Target is founded here, we get to see ... they are founded here so we get to see a lot of these things come through before the rest of the country does. And I remember, I don't know how long ago, it was maybe a decade ago when they first started this with Michael Graves. So again, Michael Graves now gets his elite design given access to the masses at Target, and Target gets a cachet of that elite brand. Exactly what Vanderbilt's doing here.

Instead of expanding itself and all the capital costs and other risks that that entails, Vanderbilt is expanding their market by partnering through the CIN, by partnering through Vanderbilt Health Affiliated Network, to get greater access to more people particularly at the top of the funnel. They're also doing some things locally and we'll talk about that in a little bit, but this is a great way that they've expanded. On the flip side, their partners, those provider groups, the hospitals and health systems, are getting the affiliation with the Premier Vanderbilt brand. So that's how Vanderbilt can expand a market without diluting that brand. Another way we see this happen in the health system space is through partnerships that you've seen like from Cleveland Clinic, or Johns Hopkins, or Mayo Clinic, where they are partnering with community hospitals in different states across the country to license essentially the Cleveland Clinic brand and all that entails in areas like cardiac care.

So if you're at a community hospital somewhere, say in Florida, and you partner with Cleveland Clinic, you're allowed to say you are part of the Cleveland Clinic Heart Care, your heart center's part of Cleveland Clinic. That of course entails different protocols, a high level of quality, collaboration between your physicians and the Cleveland clinic physicians, but it also entails leveraging the cachet of the Cleveland Clinic brand. So that community hospital's benefiting, while Cleveland Clinic is broadening the access to their brand across the country by these partnerships. And once again, doing it in a way that doesn't dilute what made them special in the first place. This is something that typically isn't driven by marketers, but something that's important to capitalize on whenever you can. Or even raise it to your leadership if they're considering how to go ahead and expand, this is obviously a way that we see health systems going about it. Let's go to idea number two, vertical extension.

Vertical extension

Christian Barnett: Okay. Thanks Yang. This is where a luxury brand creates a strategy to drive accessibility, which in some ways is about access, price points and how to get people into the franchise. So a number of ways of doing it. One of my favorites, and it's really about taking the core of the brand and presenting it in a way which makes sense to people. It doesn't really dilute that kind of core concentrate or DNA at the center of the brand, just makes it more available. So one of my favorite examples is Bang and Olufsen, Scandinavian high, high, level design around sound and televisions. They have these gorgeous, beautifully designed, sound systems for upwards of $3,000, $4,000, $5,000. And yet recently, they've designed these beautiful little things that are about $200. They're beautifully designed, little portable speakers, and they're a way that normal people can ... normal people, can access the B&O brand, the Bang and Olufsen brand, but at a fraction of the price that you would have to have done in the past.

So I can carry around ... I should have brought it in actually, I can carry around my little B&O speaker, feel cool, look at it and say, that's a beautiful ... it's a beautiful object, but I can get into that brand. It's my start point into that brand. There'd be other examples, there's lots of other examples, Nordstrom and Nordstrom Rack is a good one. BMW series, it's not just a 7- Series and a 5-Series, there's also the more accessible 3-Series and now has a 1-Series. So that's really about making the brand ... kind of the brand showing up in a more accessible, perhaps lower-price point way. There are other smart things that brands do. I love what higher-end spirits do, where you get a starter tasting kit, say for bourbons or for whiskers.

So a brand, they'll take Remy Martin, for example, will have a number of different kind of products in that franchise. Some are very old, some are much newer, some are richer, some are lighter. But by giving a starter kit, one, you can create these little miniatures, five or six miniatures, like a little flight.And what it does, it does two things. One, it gives people an entry point, but it also starts to make them feel like a bit of a connoisseur. Because with tasting notes and if you share it with your friends, then you start a conversation about which ones taste nicer, why does it taste nicer? Which one's are more exclusive, which ones are more expensive? It's a really smart way at an affordable price of getting people into the franchise.

And then the last one I want to mention is where a company will produce slightly different products to get people into a franchise. We'll take Kate Spade known for handbags, but if they can apply their design ethos and their leatherwork ethos and produce a little notebook or a journal or something like that at a fraction of the price of a high-end handbag, you can walk around with a Kate Spade accessory. It's just not the $3,000 or $4,000 handbag top-end one, it's a phone case or it's a notebook. And those things are very much public. You put your phone down, you put it the right way around, it's got a Kate Spade logo on. You use your notebook in a meeting, it's got a Kate Spade logo on. And these things are ways to not only demonstrate you and your taste and who you are, but also ways to start to get you into that franchise and move you through that franchise, a bit like a coming in the funnel that Chris was talking about. That's way number two, we call it vertical extension. Think about that funnel.

Chris Belovo: This is a good place to kind of insert what we probably should have covered earlier which is, anytime you draw an analogy or metaphor to kind of make your point, you're always risking somebody saying, "Well, you can't really compare X and Y because of these reasons." And so that they try to undercut all of the points you're trying to make. And so obviously when you think about luxury brands and the way we're talking about Louis Vuitton or Kate Spade and Academic Medical Centers, there's a lot of ways that these two areas aren't the same. A perfect example to bring up here is, many times in the luxury brand market, one of the reasons people buy a luxury brand is the association with the price tag of that brand. So if you're of a certain economic demographic, the more expensive something is, the higher the price tag is, the more prestige there is assigned to that brand oftentimes.

That's obviously not really the case with hospitals and health systems, nobody's out there seeking the most expensive heart surgery intentionally. One place you do see that show up a little bit of healthcare might be with those certain kinds of specialists, like you can imagine a cosmetic surgeon in Manhattan who has a reputation as being the nose guy. So if you're again of a certain kind of economic subset in Manhattan and you want to get your cosmetic surgery, you want to get your nose done, well then you've got to go to Dr. Barnett because he's the only guy that you go to and he doesn't even publish his prices, he's so darn expensive. And even saying that to your friends at the country club is part of the cache of that whole brand. What we're suggesting here is not that you're looking for ways to offer a cheaper version of heart surgery. The learning here really is, how can you think about the things that you are really well known for, so let's call them products just to keep the analogy the same. Let's think of Cardiology, Oncology, Neurology, those specialty care areas that you are most known for, but again, at the high-level, at the complex level, and how can you make those more accessible to people?

That's really what we're trying to learn here with this vertical extension, and the Apple Watch is a great way to think about it. Few years ago, Ochsner Health in New Orleans started giving their heart patients Apple watches so they could better monitor their heart rate and their blood pressure. And now, of course there's EKG capabilities, we see Stanford Medicine, we see University of Michigan, both running studies using the Apple Watch. An example of high-end expert cardiology care using something that's accessible to far more people. But you don't have to just use the Apple Watch as an example, a great example of doing this would be having an online heart risk assessment, which is something that we're all familiar with. If you are an Academic Medical Center and you're already given credit for the place to go for heart surgery, offering an online heart risk assessment is a way to bring your brand down vertically. Take advantage, leverage that value that you get at the high-level, but make it more accessible to far more people. Because obviously, there are far more people that need to learn and understand heart disease than there are those at any given moment who need heart surgery.

At the same time, if I'm in a market where there's an AMC and there are other hospitals in the market and you're offering online risk assessment and somebody else is, if I understand and believe that you are of higher value for heart care, for heart surgery, I'm more likely to come to you for that heart risk assessment because it's associated vertically with what you're known for up here. So that's really an example of how you can leverage the vertical extension, again, to extend your brand to more people without diluting that core differentiation that you're known for. All right, we're ready for the final one. The big shebang, the grand finale, horizontal extension.

The big shebang is horizontal extension. I like that notion.

Horizontal Extension

Christian Barnett: This is number three and before I go any further, I ought to explain the picture. I guess it looks like ... it could almost be a caption competition, couldn't it? What's the man putting in the big bin, or the big can? Vertical extension is about how do we play up and down that funnel? Horizontal extension is almost about how do we create adjacent, or sibling, or new funnels? So it's different ways in. And the most extreme example that I could find of this was Hermes who are now saying they will make anything for you. Anything. And this is their bespoke service. So I guess if any of you out there want to challenge them, you can ask them to make something for you and it will be your personal Hermes thing. It might cost an arm and a leg, but it will be yours, and it will be personal, and it'll be made by Hermes. Just one interesting point, when you start to look at the language they're using, the bespoke service settles up and Hermes takes the reins, that really is a direct link to their origin as an equestrian saddle manufacturer. So even though they're offering you anything you want from them to you, they are still pulling it all back to that core story, the substance behind the surface.

It's interesting how not everyone who comes to that site may know that, but that's what they're doing. They're reinforcing that substance at every opportunity. Some other examples which are a little less extreme, I didn't know this until recently, but I didn't know that Tiffany's in 1837 started as a stationary and fancy goods emporium. And during the civil war, they made swords, and flags, and surgical implements. That's a long way from high, high-end jewelry diamonds. So, I guess the reason why Tiffany's is still in existence and is thriving is because they've realized they have to extend in other ways. They have to find sectors, new sectors, where their competencies probably around craftsmanship and working with metal and stones and other materials, can extend in where there's a market to enter into. And a lot of the luxury brands, I think, are stories of amazing survival and adaptation, even though we think about them in that kind of on top of the pedestal. It's because they're wonderfully adept and nimble at saying, where can we steal some more share? Where can we find some revenue, where's an opportunity?

I love that Dunhill, gentleman's lifestyle brand, now it's all about some clothes and shoes, started as a motorcar accessories company. Back in the 19 0’ somethings or 1910s, they were making goggles for motorists. And over time, they've realized that there's a market for more and more gentleman's accessories. As we were doing this ... preparing for this Webinar, I mentioned that the Michelin Restaurant Guide, the five-star Michelin, is the same brand as the tires. And it's because back in the day, back in the early days, if it was a three-star restaurant restaurant, it was worth driving to. So there's this association, it's a very smart way to get people to use tires and ask Michelin to link the two brands together. We've mentioned Kate Spade and Dunhill, we've mentioned Burberry's trench coat for officers. Imagine officers nowadays wearing some of those kind of nice, elegant patterns in the muddy fields at the First World War, strange notion.

But Burberry has really done a great job at becoming vibrant, and young, and reinventing itself again, and again, and again, for different audiences in different sectors. Montblanc pens is another one. Montblanc started as a pen company, and now makes all manner of stationary, luggage, backpacks and so on and so forth. What they've done, and it's not random, it's deliberate and it's hard work, it's rigorous work to work out which sectors their core competencies, their brand truths, and their DNA can work into most seamlessly and profitably. Profitably, not just money-wise, but in terms of equity, and brands, and audience and just spreading that business to make it safe, secure for the future and profitable. So that's number three, the horizontal extension. And Chris is now going to talk about what that means in the world of AMCs.

Chris Belovo: Thank you. This really strikes at the heart of this conundrum that we're talking about because as AMCs expand their value proposition to the top of the funnel as they add urgent care and primary care and all of these things that we're talking about to diversify the challenges, those are the opposite of what you're known for. So how do you extend your brand positioning down there? And there's just so much that we can learn from this example of luxury brands. When you think of somebody like Kate Spade who when they started was known for handbags, that is what Kate Spade is. But to Christian's point is, they want to expand their market, expand the revenue, expand in other products, they had to figure out what was in the DNA of the Kate Spade handbag that could be carried through their other products. For them it was their style, their sense of style. Another example of that that we didn't mention here but I think it's perfect, is BMW. So Christian taught me, I didn't know this, but BMW started by making airline engines.

Here's a company that's known for airline engines and decides it wants to make cars because it sees the opportunity in cars. So, it can't really leverage the airline engine expertise in cars, what is it about their airline engines? It isn't about how they make them that does extend, it's their engineering prowess, it's their engineering expertise. And that is the thread that is pulled through. That is the lesson for AMCs because up until this time Academic Medical Centers, Academic Health Systems, most of them have built their brands around the fact that they are an AMC. That is their brand position. They have research, they have education that other health systems don't have, but most importantly, they offer that high level complex care. Going forward, you can't use that message when you're talking about urgent care because it's really hard for people to understand, how does research and education apply to something like a broken arm? And more importantly, a broken arm is the opposite of complex care. It's a commodity. Anybody can fix a broken arm, Christian can fix a broken arm. He does amazing things.

This is how we have to figure it out, and I think the work we've done with Penn State health is a perfect example of this. Because Penn State Health, Academic Medical Center, Central Pennsylvania for years its brand was we are an AMC. Understandably, because that differentiated itself and for most of its history, that's all it did was it had the Academic Medical Center, it had the Cancer Institute and the Children's Hospital. But as we mentioned, they've gone into a partnership with Highmark and are expanding to top of the funnel services. Also at the same time, they are experiencing a significant incursion from two other AMCs in Pennsylvania into their market. And so if you're Penn State Health, you have to say to yourself, well, we can no longer just hang our hat on our AMC status as our differentiator. Doesn't mean it goes away, it's still an important part of who they are, but again, what is it in their DNA that they can carry through that speaks to urgent care, that speaks to community practice, all of those things?

For Penn state, what we worked on them to uncover was it is their investment in the community. Everything that they've done, everything that they are doing, everything that they plan to do, is about investing in the health of their community. So that is their DNA, that is their secret sauce. Two benefits of that. First of all, it differentiates them from the other AMCs who coming from outside the market, can't speak the community investment the way they can because they're from there. But also, that is a thread that pulls through all the way from the highest level of complex care. If you're buying new robotic surgery, that's an investment in community health. If you are opening an urgent care, or primary care, or anything you're doing in a surrounding community, however you're doing it, that's also an investment in the community's health. So a perfect example of finding that secret sauce, that DNA, that thread that can be pulled through, that allows them to still expand in the way they want to without diluting their brand. Because they're not speaking against the complex care that we talked about.

Another example of this is Vanderbilt Health. We already mentioned how one of their strategies is building the Vanderbilt Health Affiliated Network. But they also were expanding to top of the funnel services in the Nashville market where they are based. And so their thread that, that we helped them pull through, was personalized care. So as an AMC that had primarily meant precision medicine, that had primarily meant genomics and cancer care, all the things associated with complex care. But personalized care means a lot of different things to consumers, and if you can show how you deliver individualized care, which is the primary component that most consumers think about when you say personalized care, all the way through the continuum, you have your thread. So it's not just an inpatient care, it's how people show up in the primary care doctor's office. It's how they show up an urgent care. It's even how you go out with population health.

For example, definitely we can argue that if you're out there trying to prevent the spread of diabetes, the more individualized you can make your communications and your messages and your support to each individual in the community, the more success you're going to have with helping people prevent diabetes. Given socioeconomic determinants of health and all the other things that make us all different. That thread, that message, that positioning of personalized care pulls all the way through. This probably is the most important of the three, and we're going to hit that here at the end, we're almost done. What can we take away from this? So, first of all, as we said, luxury brands are different. We understand that, but hopefully as we've shown you, there's a lot we can learn from the luxury industry. In fact, we would really encourage you to spend some time doing research on luxury brands, how they market in brand. They really of all the product and service sectors out there maybe understand consumer psychology better than anybody. Because to Christian's point, if you can get somebody to pay $5 for a bottle of water there costs 3 cents, you understand the consumer dynamic.

And so there's a lot that can be learned in terms of how do you capture the value of the prestige you have as an AMC, how do you tap into emotion? Part of the problem with where AMCs have been in talking about themselves, in terms of research, the education, as those are self-directed brand positions. They're promotional, they're all about what we do as AMCs, and it's hard to translate the value of that to the consumer. Luxury brands are magnificent about pulling out whatever they can in terms of value and maximizing that. And then finally if you remember anything from this, is how do you find your brand thread? We would argue that for most health systems of an academic nature, they're going to have to move beyond a brand positioning that only relies on their AMC status. That does not mean that they should stop talking about the great things they do as an AMC, they should not stop talking about their research, their education, their proficiency with high-level complex care. But again, if you want to get equity for the top of the funnel services, you're going to have to find a way to pull something else through, pull something else forward, to give people reason to believe that they should walk in for a broken arm.

That's our story, we're happy to tell it. A few things here that we would like to offer you and then we'll get to some questions. We're right on time in terms of questions. First of all, having done this any number of times for AMCs and having studied the market, we've kind of developed a way that we can look at an Academic Medical Center and Academic Health System from the outside and pretty quickly diagnose where they are in terms of this issue. And so if you're interested in having us do that for you, we can deliver a report card that looks at five different criteria, for example, brand messaging, shift in revenue, organizational strategy. All things that we can kind of look at from the outside and give you some feedback on where we think you are in terms of this challenge, both as an organization that's expanding its value proposition and as a brand that's capturing that value. Obviously that's a diagnostic tool, you would need to dig much deeper once you got that. But you can look at that report card as a way to kind of diagnose, boy, there's something here we should be doing different or better. And we can help you compare yourself to other AMCs and where they're at.

So, we have a poll that should be coming up, there it is. If you would like that, just select that box and we'll get your information and we'll follow up with you. There is some limited availability of that because we have paying clients so we can't do 20 of these if we get 20 requests, but we'll just put them first come, first serve, doesn't take us that long to do it. So, we'll let you know as soon as you select that. Also like to tell you about the Joe Public retreat if you're not familiar, it's a really unique experience that we've offered now for seven years running. We invite the top minds in the health care marketing industry to come in for two days, roll up their sleeves and have basically a two-day conversation about the significant issues and trends that we're seeing. It's not like HCI, it's not like SHSMD, not a lot of PowerPoint presentations.

Essentially a two-day round table with some of the smartest minds from health systems tackling the most significant issues. So, check that box, we can send you more information or there's also a website on your screen. And then finally, if you're interested in hearing more from us about how we work with AMCs on this issue or other branding and marketing challenges, you've got my email there or select the box and we'll get back to you. So with that, we've got about five more minutes left. Let's look at some of the questions, just forgive me while I pull them on my screen here. Let's see, we've got about five or six of them here, I'm going to try to take them in order in relevancy. And then, Christian I'll take the first stab and see if you have anything to add on some of these.

Christian Barnett: Absolutely, yeah.

Q&A

Chris Belovo: The first one says, what if your AMC hasn't taken steps to expand its offerings to things like primary care or urgent care? Okay, so what if you haven't expanded your value proposition? I guess there's good news and bad news in that. The good news is you don't have to worry about this problem because you're not trying to capture value at top of the funnel. You're not trying to capture brand value in a way that's contradictory to who you are, because all you have to say is we're an AMC and we offer this complex level of care. The bad news is that puts you behind most of the industry. You're really going be up against it in terms of the business trends we're seeing. In terms of your ability to sustain growth and continue to pull people through as you see the continued pressure on inpatient care reimbursement, those types of things. So, I would say the bad news there far outweighs the good news. And if you're in that situation, you ought to wave a big giant red flag in front of your leadership and say, "Hey, we, we may need to be doing something more significant than we have planned." Christian, anything you want to add to that one?

Yeah, the only add I've got, Chris, is sometimes ... actually not sometimes, always, having a really secure and ideally inspirational value proposition galvanizes all the staff. So often what we see is silos and siloed organizations where different people are pulling in different directions, justifiably so, chasing different audiences and different conditions. But having something which is really secure, cohesive, and inspirational, can really work as a galvanizing rod for the organization itself. And then in a way, all the employees are like little advocates out in the markets, that employees are a fantastic source of stories and so on and so forth. So just to add that on top, Chris.

Chris Belovo: Okay. Cool. Here's a awesome question. What about the challenge of convincing consumers that the experience in these new top of the funnel types of offerings is positive given that many consumers associated negative experience overall with many AMCs? That's certainly reflects what we've seen, it's kind of a double-edged sword of the Academic Medical Center brand. So again, we've been talking about the positive aspect of the traditional brand position, the accolades for a high-level complex care, best doctors, innovative technology research. The flip side of that is usually AMCs have negative perceptions when it comes to the experience of healthcare, so they're difficult to navigate, parking can be tough. A lot of times AMCs have these giant complexes that are hard to navigate. Because they deal in very high-level specialty care, it can take a long time to get in to see a certain specialist. So, how do you deal with that if you're now offering services at the top of the funnel where those very attributes are core to why consumers choose urgent care, virtual care?

That's a real trick because you need to make sure that folks won't go ... Why in the world would go to an urgent care from ABC AMC? It took me six months to get in to see my specialist, and it takes me 20 minutes to park, I don't want that experience with an urgent care. But obviously the benefit for you is most of the time AMCs in these expansions, they're building and offering these services off their primary campus. So there's a geographic expansion, clinics, outpatient centers, surgical centers, specialty centers, whatever, virtual care, do not require people to go into the belly of that complex beast. So this is an opportunity to actually show people that you do offer a positive experience. If you can get them into your urgent care where they can drive right up and park, they don't have to pay. It takes them two minutes to walk in the door, takes them five minutes to wait, that can help shape the overall experience that people see for your brand. There's actually an opportunity in doing that assuming that you're able to deliver those positive experiences or benefits at the top of the funnel. Christian, anything to add to that one?

Christian Barnett: I've only got one thing to add, which is the next time you're near a luxury retail, go in and feel the experience. So much of this is not ... I spoke earlier about style and substance, just go and be a mystery shopper. Pretend you're going to buy a fat diamond ring and just feel how Tiffany's treat you. It's incredible, you feel absolutely wonderful and special. And even taking a small percentage of that and applying it to that situation will do an awful lot of good.

Chris Belovo: Yeah, for sure. Luxury brands have just figured the experience out, that's just a huge part. And sometimes it's not even the physical experience, the in-store experience is the tactile experience. Apple is so famous for you buy their products and it's like opening a little gift, beautifully designed boxes. That's just Apple. Tiffany's obviously famous for its boxes. You showed like the Hermes picture before, Christian, where it's in the nice bag and they're putting it in the super cool canister. So even the tactile experience with some of that stuff.

Christian Barnett: And do you know what, for my money, they're relatively ... in the great scheme of things, they're relatively small and they're relatively inexpensive to do but they mean a lot. That whole unpackaging of an Apple product, so many ... there was a fetish around that on YouTube, wasn't there, just people just unpacking their boxes because they are like a self gift. And that's just fantastically thoughtful and detailed, luxury is so good at the detail because the detail matters so much as a sign of quality.

Chris Belovo: That actually reminds me of, one of the most successful marketing initiatives that I was involved in happened 15 years ago and it was the opening of a heart center. One of the ideas we had was to create a personalized, we called it my heart book. It was a hard-bound book that 95% of the content was stock content about how to live a healthier life to make sure that your heart is healthy, but the label was personalized. So it said my heart book and had your name on it, and then there was one section in it that was personalized to your specific heart information. So your blood pressure, your BMI, all of these kinds of things, that was actually written in by the cardiologist. So you would go and have a heart risk assessment, you would have a cardiology visit, you'd have any one of these things and when you were done, you would leave the appointment, because they could print on demand printing in the office, the label, and it would fill in the information as you went through your through your appointment. You would leave with is this really nice bound hardcover book called my heart book.

So it's a perfect example of what we're talking about of making your brand more accessible, of offering that tactile experience and that kind of thing. Amazing results, that was 15 years ago. One more question, we have time for one more and I think it's a really a good one. And a difficult one, I don't know if it has a black and white answer, well, let's see. Do you think the AMCs name and brand, so I would assume they mean brand identity there, have to be directly linked to the vertical or horizontal expansion strategy? This is a real tough one because if you know my POV, if you've read books I've written or heard me speak, I'm a huge advocate of the unified brand. And so my first instinct think is that, yes, if you want to get credit for all these things you're offering at the top of the funnel, you should apply your brand name to them. There are systems that are expanding top of the funnel that have taken a different strategy that have intentionally kept, say for example, an urgent care clinic name separate from the brand of the health system itself.

We would say that is the wrong ... I would say, I'll say I would, I would say that's the wrong way to go. Because you want people to know that your urgent cares connected to your system because part of the value of an urgent care is in if something happens, there is somebody behind it who can deal with the significant issue. If you go to an urgent care and you've got a pain in your arm and you think you just broke your arm and they find out you've got some kind of significant disease, you're presenting with a heart issue, it's good to know that you will be referred onto a health system you trust. Furthermore, most people would rather go to an urgent care that they are already in with that system. So they're not having to tell some random doctor all of their medical history, but that's part of the experience as it is. So, we would say normally, yes, but there are certainly circumstances where there's a fear that the reputation of an AMC, say experientially, is so bad that kind of to my point earlier, if you put your name on an urgent care, it might turn people away. We would say it's on a case by case basis, my default is that, yeah, you want to capture the value for everything doing on your brand. Christian, is there anything you want to add to that one?

Christian Barnett: Yeah, I've got a slightly different view here just for fun. Well actually not just for fun, because I believe it. Let's take some of these house of luxury brands, if you look at some of these luxury brand houses they own a variety of brands. The easiest one which comes to mind is that the Cardi or the Forman-Brown house of brands owns Bombay Sapphire, Grey Goose and a whole lot of other brands. And they could rebrand it all in one name, but they're not going to because there's value. As long as there's value in the individual brands, you keep the individual brands going. Which is why there might be an individual children's brand which is held in a wider healthcare system.

Christian Barnett: So for my money, the criteria is if there is value in keeping the brand name going, keep it going. The trick is to determine what value means. It's usually going to be in the head and the heart of the users. It might not be financial, it may be emotional. But, if there is no value or there is less value in the smaller brand, should we say, yeah sure, make it part of a unified brand. But I don't think this is cut and dry in my view as that, and luxury brands are brilliant at knowing where value is and where value isn't. And they're very good at knowing when to amalgamate into one and when to keep the kind of separate brand strategies running even though there's one owner.

Chris Belovo: All right. We are over time by two minutes. It's a perfect place to leave. Maybe the next Webinar we do, Christian, is the pros and cons of unified brand in your brand extension.

Christian Barnett:So you get the Yang, Chris?

Chris Belovo: We can go mano-a-mano, yang versus yang. But we are over time and we we respect people's time. Really appreciate you joining us. Again, if you want any of the things we're offering here, just follow the information on the screen. Select the poll, hopefully you did that. We appreciate you spending time with us and we will see you next time.

Christian Barnett: Thanks very much.

Chris Belovo: Thanks for joining.