The leader in minimally invasive surgery was the subject of many news stories, particularly in Tampa Bay in March 2019. This time the story was not about their disruptive healthcare marketing strategy or record number of patients helped through spine surgery. LSI closed their doors abruptly after 13 years of service, leaving hundreds of employees jobless and countless patients without the spine surgery they so desperately hoped would relieve their back pain.
I spent five years of my career as a Creative Director on the marketing team. I was proud of the work our team produced to educate people about their procedures through direct-to-consumer marketing tactics that included television, digital, OOH, print, and events.
News of the closing was unfortunate because many of the people I developed strong relationships over the years still worked at the Tampa headquarters. I spent more time with many of these people than I did my own family. But despite numerous warning signs of financial and leadership issues, including multiple layoffs and facility closings, the loyal employees who remained until the end were hopeful that the company could be saved. Sadly, they were blindsided late on a Friday afternoon that they could no longer hope for the glory days of Laser Spine to return.
What went wrong?
The leadership and board that existed early on at LSI did A LOT of things right. They built a fantastic culture of care, disrupted the healthcare market with direct-to-consumer campaigns, and created dozens of young executive stars.
These days, many people are asking me what led to the downfall of the spine surgery giant. How does a company like Laser Spine Institute join the list of once great and now irrelevant brands like Kodak and Blockbuster?
No one likes a Monday morning quarterback who says what they would have done differently, and I am certainly not pointing out anyone's mistakes. While I was close to many of the executive leadership team members who rode the wave of success for many years, I was not a part of that exclusive group.
I believe many strategic and financial decisions were made that led to the company's demise years later. Those decisions seemed perfectly reasonable at the time of the excellent success Laser Spine was experiencing. The choices included the payment to investors who had sunk millions into the growing business at the same time as a new corporate headquarters, and three facilities were opening, refusal to go in-network with insurance while the healthcare market was shifting. In addition to poor leadership in times of crisis, it is my opinion that these factors contributed to the eventual closing of LSI. I am not a financial analyst and cannot give an expert opinion on this area.
Where did the BRAND fail?
In addition to the financial decisions, I believe there were branding decisions that also contributed to the issues.
1. The unique selling proposition was no longer unique.
There's no question that Laser Spine Institute built the category of laser spine surgery. Their name was synonymous with minimally invasive spine surgery. In 2006, the ability to walk out with a small band-aid after spine surgery was unheard of. Laser Spine Institute made that possible. And back pain sufferers across the country flocked to the Tampa facility to reclaim their lives from debilitating back pain. Billboards and airline magazine ads featuring topless women in bikini bottoms and a small band-aid helped launch the healthcare brand to heights never imagined. Later, pay-per-click advertising helped attract hundreds of customers nationwide. But their national direct-to-consumer television advertising is what drove the business to its success. The foresight of the executive and marketing team to reach patients through the emotion of sight and sound was genius. Testimonials of patients who had reclaimed their lives were undeniably compelling.
What the brand could not see coming is that their national advertising efforts were also driving business to competitors in the space. Some surgery centers even tried to use the Laser Spine name as their own, hoping to fool patients into thinking they were the same. As minimally invasive spine surgery became more widely practiced in surgery centers and hospitals, Laser Spine Institute claimed to have done more spine surgeries than any other provider in the world. While this claim was likely to be accurate, the brand drew scrutiny for being a surgery mill.
This unique proposition of being the first and the best in spine surgery no longer mattered when other neurosurgeons and orthopedic surgeons started performing the minimally invasive procedures AND accepted in-network insurance.
LSI had a plan to offer additional services like conservative treatment for back pain sufferers. Still, it was unable to pull off the strategy in time to differentiate them in the crowded spine surgery space that exists today.
2. The culture died.
As the spine surgery space became more competitive, the leadership team at the organization also got more competitive. During the growing success in 2015, some of the inspirational leaders who had infused the family atmosphere and "One Team" attitude left the organization. The values that were built were still displayed on the walls of the new corporate office and the badges of the employees. However, they disappeared in the hearts and minds of the new leadership team.
I've learned over the years that the pillars of the brand rest on the values and culture of an organization. Without those pillars, the messaging and brand will struggle to convey the emotional benefits that a brand offers. People make decisions with their hearts, but they justify those choices with rational benefits. The unstable environment that employees at LSI experienced in 2015 left questions about the values. Looming lawsuits created a culture of uncertainty. Ultimately, unhappy employees led to unsatisfied patients.
3. Heavy reliance on D2C marketing.
It's hard to admit as a marketer that an organization can have too much reliance on marketing. Laser Spine Institute was a pioneer in healthcare. They were among the first to utilize direct-to-consumer advertising to reach their patients. This approach was genius and led to its wild success - for a time.
B2B marketing or physician-to-physician business development was a tiny part of LSI's marketing mix for an extended period. The medical community at large was not educated on what the surgeons at Laser Spine Institute were providing. When patients saw the TV commercials featuring a glowing green laser and a tiny band-aid on the back of a man who was standing tall and walking after surgery, they flocked to their doctors' office to ask for that type of relief. Their family physicians and surgeons who were unfamiliar with the minimally invasive surgical approach shut down excited patients and proclaimed that a laser was not going to heal their pain. They said that LSI was selling "snake oil."
LSI did eventually build a business development team that would educate physicians about the minimally invasive surgery after much pushback from patients who said their doctors couldn't recommend laser spine surgery. Claiming that the laser was just a small part of the surgery and was only a part of their name because patients thought it was revolutionary when the company launched. LSI physician liaisons had their work cut out for them to try to dispel the myths of minimally invasive spine surgery.
Building trust in the medical community is vital for healthcare brands to thrive. Physicians yield high power over major health decisions even though more of healthcare costs are being pushed from insurance companies to the patients' wallets. Patients want to make their own choices, but they still value the advice of their providers.
These are just a few of the branding challenges that LSI faced and struggled to remedy in the last few years.
Despite all that led to the demise of LSI, the family of employees, and happy patients that formed is truly
special. The leaders responsible for building the company in the early days created a unique culture. Those leaders taught us how to work hard and reach for the impossible. Sure, mistakes were made. But as a former LSI employee, I feel a bond with those employees that I've never felt at any other company. We were brought together to achieve a common goal and truly believed in the mission. We didn't mind the outside scrutiny that our marketing efforts created because we ultimately thought that we were helping people reclaim their lives from pain. I saw it with my own eyes daily and heard it from the countless patients I interviewed for our commercial campaigns. Those tears of joy on patients' faces were real. We changed lives. And for that, I'm eternally grateful for the opportunity to work alongside the talented LSI team.
If you'd like to learn more about how to avoid similar mistakes as your organization is growing your brand, contact Harrison Creative Group.
About the author
Stacey Harrison is an experienced B2B, B2C, and healthcare marketer. She leads Harrison Creative Group as the lead creative strategist. Partnering with small, medium, and start-up businesses, she operates as an outsourced Chief Marketing Officer to develop and implement growth marketing strategies that include branding, paid search and social, content marketing, direct TV, social media marketing, email marketing, and public relations and strategic communications. She served as Laser Spine Institute's Creative Director for five years.
Contact Stacey today for a no-obligation consultation about your marketing strategy.