Samuel E. Menaged | Crain's Philadelphia

In this ongoing series, we ask executives, entrepreneurs and business leaders about mistakes that have shaped their business philosophy.

Samuel E. Menaged

Background:  

The Renfrew Center is a national treatment network for women and teenage girls with eating disorders. Founded in Philadelphia 31 years ago, the network now has 17 facilities nationwide and has treated 65,000 women.

The Mistake: 

We originally opened here in Philadelphia with a residential facility, and then we moved down to Florida. That's about the time that managed care came into the marketplace, including the marketplace for mental health, and along with that came a push for a lower cost of care—not having everyone treated in a residential setting, for example, and finding some alternatives that could ultimately save money.

Until around the early 2000s, our focus was mostly in the Northeast and Florida. But we saw demand for what we offered all over the country, and we saw we needed to start a foray into some new southern cities.

We went into Nashville, Charlotte and Dallas. But we discovered pretty quickly that things weren't clicking very well from a marketing point of view. We couldn't find the patients. 

We had to adjust to the dynamics of the region ... America is not homogenous.

The Lesson:

We knew there was a market. It took us a little while, but what we eventually realized was that something that was really important for these patients was their Christianity, and their affiliation with their churches. We saw that we needed to build trust in those communities by connecting the clinicians with the churches.

We listened to our patients, we listened to their families, and we developed new programming. We started to develop Christian programming because we saw that we had to adjust to the dynamics of the region. That's something important we learned—that America is not homogeneous. We took some financial losses for a while [while we added the new programs], but we just had to adjust.

It absolutely changed the way we looked at our markets. We eventually saw that in New England we had a pretty large Jewish community, so we started to adjust there by having kosher food and establishing connections with local rabbis and hosting seminars to better appeal to that audience. So it's about niche marketing in some ways—the realization that wherever we go, we have to do something specific to reach out to that audience.

Follow the Renfrew Center on Twitter at @RenfrewCenter.

Photo courtesy of the Renfrew Center.