Patient as a Source of Recommendation and Its Influence on Another Patient's Loyalty to the Physician: An Exploratory Empirical Study

Article excerpt

ABSTRACT

In an ever growing competitive business world, every entrepreneur needs to worry about his client's loyalty as they contribute directly to the profitability of the business. The present study is carried on to address mainly two issues. One, to find out whether the friends, relatives and colleagues who recommend a patient to take treatment from a particular physician, have themselves experienced the service of that physician. The findings report that about 55.16% of the recommending patients had experience with the service of the physician. The second issue addressed by this study is to know whether a patient as a source of recommendation has any influence on the loyalty of the other patient to the physician. The study confirms this aspect and it is concluded that a patient who avails the services of a physician as a result of recommendation by another patient is more loyal than one who comes through other sources. This study supports the "TieStrength Relationship Model" of Brown and Reingen (1987), and provides a theoretical extension to this model, that strong tie sources besides influencing the choice of a physician also influence the patient's loyalty to the physician. Implications for the physicians are that they should maintain and make more loyal their present patients in order to get new loyal patients. Probable extension of this research is also discussed later in the paper.

INTRODUCTION

Keeping a customer and ensuring satisfaction is crucial for all service firms no matter what is the size of the firm. The key to success for many of the businesses lies in their ability to maintain a base of loyal customers. Dissatisfied customers don't come back and when they go to the competitor they take their friends with them. It is therefore of utmost importance for those in the business of "service production and delivery" to build and maintain a strong base line of strongly loyal customers.

It is evident from the existing literature that customer satisfaction leads to customer loyalty (Heskett, Jones, Loveman, Sasser and Schlesinger, 1994), and customer loyalty in turn leads to increased profits. A reduction in customers' defections of 5% can boost profit by 25% to 85% in various organizations (Reicheld and Sasser, 1990).

Loyalty is thus important and generates profitability over time as it reduces operating cost per customer, leads to more spending by the customers over time, and provides free advertising from loyal customers by way of positive word of mouth.

In healthcare, patient loyalty to the physician can be traced back to ages where the family physician was considered as the healer of the family and the whole family depended on the physician for their health needs and at times as regards other family matters. The physician-patient relationship has evolved over time and has more so, adopted a business outlook making the physician and the patient amenable to business like transactions where loyalty of the patient (Customer) to the physician (Service Provider) becomes a deciding factor for the success and growth of the physician's practice.

Patients choose the best physician available and affordable according to them to take treatment for their ailment based on the information they get from various sources. Similarly a patient may be recommended by others like family members, relatives, friends and colleagues to take treatment from a particular physician or a physician may recommend the patient to another physician who is an expert. Past research has reported recommendations from friends and relatives as a major factor affecting the patient's decision making in selection of a physician. (Hoerger and Howard, 1995, Lupton, Donaldson and Lloyd, 1997). However, whether source of recommendation is an important determinant of patient satisfaction and loyalty to a physician remains unanswered.

RESEARCH PROBLEM

In a high involvement and credence type service like the health care service, where the patient does not have the technical ability to judge what exactly is being received from the physician, the patient relies heavily on other cues and the process dimension of the service delivery to evaluate and form his opinion about the service. …