June 22, 2011
Case Study

Relationship Marketing: Focus on customer enablement instead of product marketing helps Toshiba Medical maintain revenue in shrinking industry

SUMMARY: When your industry is facing significant changes and uncertainty, the best course of action might be a counterintuitive approach to marketing.

Read on to find out how Toshiba America Medical Systems met the challenge of a healthcare industry in a state of flux, and a shrinking marketplace for its products. The result was a campaign built around its biggest annual show that focused on educating customers on the new healthcare market, rather than products and services.
by David Kirkpatrick, Reporter


It might sound counterintuitive, but there may be times where it makes more sense to market something other than your product or service.

For example, when your market is in a state of flux and the marketplace is shrinking, spending your marketing efforts on reassuring your customers that you understand both what is happening in the industry, and their specific challenges, can help build or reaffirm your long-term relationships.

When everything else about your business is changing, the best bet for long-term success is to make sure your customer relationships are solid.
That's the approach Toshiba America Medical Systems (Toshiba Medical) used for its main marketing campaign last year. The company sells, services and distributes diagnostic imaging systems, such as MRI and CAT scanners, to hospitals and healthcare institutions. Toshiba Medical has been in the U.S. market for 50 years, and has operated worldwide for more than 80 years.

Like many B2B marketers, Toshiba Medical's products are large, high-dollar items that require a lot of customer interaction both before and after a sale. In fact developing this relationship with each customer is a major goal for Toshiba Medical.

"The end goal is to have a long-term partnership with our customers," said Catherine Wolfe, Senior Director of Corporate and Strategic Communication, Toshiba America Medical Systems.

As you'll see, sometimes there might be more value in spending marketing resources on developing customer relationships than in the actual product offered for sale.


The healthcare industry as a whole is facing both change and uncertainty. New regulations are altering the way healthcare providers carry out their day-to-day business, but even these regulations do not have completely solid footing.

The result is a difficult business environment. Providing quality care at a lower price is a major pain point, and a new healthcare focus is on what is called "episode-of-care."

In the past a heart attack would be treated as a series of individual events -- first response EMT action, emergency room treatment, possible surgery, post-emergency ongoing care. Now the heart attack is seen as a single "episode" treated across the entire healthcare system.

The episode-of-care system is slated to replace the traditional fee-for-service payment model in healthcare.

Toshiba Medical realized its customers faced this complicated challenge, and decided understanding, and providing education about, episode-of-care would be its marketing message last year.

Step #1. Understand the marketplace to develop long-term customer relationships

"Understand your market" may seem so basic as to belong more in Business 101 than marketing, but when an entire industry is facing extraordinary changes in the way it conducts business, Marketing needs to make sure it truly understands the environment a message is (hopefully) reaching.

"Customers want to know that the companies that they are working with are true partners and really understand what their challenges are," stated Wolfe. "We believe it's only by demonstrating that understanding that [customers] will want to work with us over the long term."

Like almost any company, Toshiba Medical wants to provide valuable products and services, but it also strives to provide the best after-sales support. After all, its main business goal is to create long-term partnerships with its customers.

Long-term customer relationships are particularly important to Toshiba Medical because the diagnostic imaging market was around $6 billion just a few years ago. That marketplace has now shrunk by around one third.

Combining the large downturn in its market, the key goal of developing long-term customer relationships, and external industry factors, it became obvious to the marketing team that understanding the changing business and conveying this knowledge both internally and externally was its greatest challenge ... and opportunity.

Step #2. Gather information and educate

In order to fully understand what was happening in the healthcare industry, Toshiba Medical created a healthcare economics team to keep up with legislative changes and analyze how those changes affect its customers.

One healthcare economics team member was charged with going through the entire four-inch document covering new healthcare legislation to figure out what it means in terms of reimbursement and patient care.

With this knowledge, the first audience was internal -- the sales team. The economics team conducted in-depth training with sales reps and created sales material that explains how Toshiba Medical fits into the new clinical care and cost structure.

After the internal training, this knowledge and understanding was marketed directly to Toshiba Medical's customers through:

o Formal client training similar to the internal education

o Speaking at customer events that are accredited. Medical professional must attend these types of events to receive continuing medical education credits

Some of this speaking to customers takes the form of what Toshiba Medical calls "self-economics tours," where its healthcare economics expert visits different regions of the country at the request of the sales team.

Sometimes the presentation is to large organizations, other times it's held at individual customer sites where the information is presented to both administration and physicians.

All of the information created by the healthcare economics team serves as the basis for Toshiba Medical's marketing communications and the training itself reaffirms the message that the company understands its customers' business climate.

Step #3. Use industry events to both reach, and educate, your audience

The largest diagnostic imaging trade show, the Radiological Society of North America (RSNA), occurs each year in late November. Because Toshiba Medical was focusing its marketing around understanding the changing healthcare industry, the 2010 show for the company was based on an entire integrated episode-of-care campaign.

The event itself is very large with around 60,000 attendees, and Toshiba Medical went to RSNA with an extensive coordinated presence:

o 50,000-square foot presentation booth

o A main stage presenting different episode-of-care scenarios and how imaging equipment fits into each scenario

o One-on-one customer meetings set up in advance of the show

o Online material explaining episode-of-care and the latest information on healthcare legislation

o Sales collateral about episode-of-care

o Promotional material that appeared in 17 of the top industry print media outlets

o A multi-part, pre-show email campaign covering the event booth agenda built on lists provided by RSNA and event sponsors

- Enabling the customer vs. marketing the product

"When we were at the RSNA, we very much focused on the healthcare market changes," said Wolfe. "And it was a risk because normally when you go to a show like this, people focus on the new equipment that they're offering. The competition continued to do that."

She added that Toshiba Medical realized it had an educational message about episode-of-care that might be ahead of the market, but was very timely.

The result was a marketing approach to the entire campaign around the event that made changes in the healthcare environment the primary focus, and let that naturally lead to how the company's product helps its customers address that new environment.

Step #4. Create an internal survey panel

Toshiba Medical used the RSNA show to announce another effort to further improve its connection with its customers. The company formed an in-house opt-in survey panel. The idea was to get feedback from customers quickly and without having to utilize an outside provider for the information.

Through the panel, Toshiba Medical asks participating customers about different issues within its business and the overall industry. For example, the company conducted test marketing on its branding and went to its opt-in panel for reactions to the brand testing.

Wolfe explained the marketing team spends a lot of time determining what effort worked, and what needs to be changed in campaigns that did not work. The opt-in panel provides feedback from the external source Toshiba Medical is targeting with those marketing efforts.

The panel helps tie the entire focus on understanding the customer, and the healthcare industry, together. The best way to understand your customer is to go straight to the source.

The most important result of this marketing approach is that Toshiba Medical's revenue is maintaining at around $600 million year-over-year. While flat revenue may not be an impressive result for every company, the fact that the healthcare market is undergoing a large amount of change, and the diagnostic imaging space has shrunken by a third over the last several years, the team is quite happy with the result.

Wolfe stated, "The diagnostic imaging market started to decline in 2008 due to the Deficit Reduction Act and healthcare reform. Both have had a big impact on reimbursements and market uncertainty. Uncertainty in our market leads to deferred purchasing behavior. However, just this past quarter the market has started to grow again, and we expect slow growth over the next 12 months."

Other metrics include:

o Even though attendance at the 2010 RSNA show was up 7% over 2009, attendance at Toshiba Medical's booth was up 59%

o The company held around 300 customer meetings at the show

o The email campaign around the RSNA show had a 30% open rate. Toshiba Medical compares this number to a typical industry open rate of 20% or lower.

o The advertising campaign based around the entire "episode-of-care" marketing effort registered more than 4 million impressions in November and December

o The in-house created "episode-of-care" campaign won a Silver 2011 Ex Award for "Best Integrated Trade Show Campaign"

o Toshiba Medical's opt-in panel has more than 200 participants

Toshiba Medical is also maintaining a high rating with industry analysts:

o MD Buyline ranks seven segments and Toshiba Medical is number one in four of those segments as of April 2011

o The company is number one in KLAS overall medical equipment vendor rankings for 2011

Useful links related to this article


1. Episode-of-care sales sheet
2. RSNA email
3. RSNA landing page

Toshiba America Medical Systems

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