In anticipation of the implementation of the Affordable Care Act (ACA), health insurance companies have spent a significant amount of time and energy modeling prospects who would be attractive to acquire and those who should be directed to more healthy lifestyles. For some, this has supported a “wait and see” attitude. Following what happened in Massachusetts when the ACA prototype went into effect, they reason that the passive approach is best. In the Massachusetts case, the market-dominant company chose to advertise immediately and drew in a large volume of high risk business that they had difficulty servicing. Those who waited were able to cherry pick and gave better service while getting higher margins. On the other hand, companies who generate huge spikes in new applications might win if they can control costs by limiting in-network service to certain providers. Either way there is risk – you could garner less market share or be less profitable. All health insurers share a common concern: the need to attract and retain members who pay more in premiums than they use in benefits.
For insurers that want to see upside growth come from individuals over commercial markets, the most critical function of marketing is to attract and retain “best customers,” not grow share or make the brand more broadly visible. This will be even truer as the model for care moves more in the direction of retail and away from the extant managed care system. Given HIPAA and other existing privacy regulations, there are legal issues with using personal data of any kind to sort prospects or members for marketing purposes. Leaders in customer-centered marketing are carefully using third party data to qualify messages and invite dialogue. Once the ice is broken, they are using preference centers and other means to engage in real two way conversations. While these techniques are new to this space, it is likely that insurers will find what leaders in other industries already know – that having meaningful conversations can provide for short term gain while also delivering an authentic value exchange. Doing this might just enable them to reach the holy grail of better care that costs less and delivers more for insurer and consumer alike. Two work streams to make this happen are:
- Targeted omni-channel campaigns to gain engagement among non-members or anonymous consumers – broadly this represents acquisition marketing
- Ongoing member management (CRM) programs with layered opt-in – this represents retention, upsell and loyalty marketing
Some insurers expect to see the top of the funnel filled without further action on their part. They expect that the public exchanges will take care of it. Early snafus aside, if the total number of covered lives that came in via public exchanges reaches the 20-30 million mark expected by 2020, this may still prove true. At the same time, the plans offered directly to consumers via exchanges are identical and there will be little or no price differentiation within a given area. Insurers therefore have no choice but to differentiate based on such things as ease of use and other value added in the way of quality of service.
They need a customer experience that results in a high percentage of completed applications to become covered lives and is particularly attractive to young, healthy people. Many are now experimenting with segmentation to help them perform some form of “back end underwriting.” This means they will not violate rules about equity of coverage, but will hopefully find themselves with more applicants through messaging and outreach that is interesting, frequent and visible by certain audiences. Accordingly, they are using behavioral segmentation that will produce addressable audiences in multiple channels with trackable results. Prospect identification presents unique challenges in the healthcare space, but there are ways start the process and then improve accuracy and relevance with permission from the prospect. Accomplishing this requires attention to data quality and the ability to confidently establish a safe haven to secure Protected Health Information (PHI). While it is a challenge to use 3rd party data to group and sort individuals for marketing purposes, it is by no means impossible to do this in ways that are compliant with current regulations.
Retention, Up-sell and Loyalty
Leading insurers recognize that this is a change or die moment. Aetna has an ad campaign talking about how they have confidence in you (and want to be your partner in health). It is clear that this campaign is not only to position the brand for prospects, but also to develop their identity among covered members. For the past two years they have been emphasizing improvement in all aspects of member interaction. Aetna CEO Mark Bertolini recently told analysts and shareholders that a key strategic initiative for 2014 is to spend aggressively on revamping the customer experience and to lead this he has recruited a senior executive reporting directly to himself to manage it. Bertolini also pointed out that Aetna sees a shift away from the management of health risk by traditional insurers and toward it being managed by provider networks including Accountable Care Organizations. For insurers to continue to be viable they need to provide a better consumer experience. They can either participate in changing the way healthcare works or they can face commoditization and worse.
Managing consumer relationships means finding ways to do what is hard. It is both difficult and required that insurers speak with relevance to anonymous visitors and members involved in health and wellness or claims processes alike. This is possible if they adopt more of a 1:1 marketing approach that reflects voice of the customer marketing techniques. Doing this will require much tighter integration between marketing and operations than is currently the case in most companies.
Acquisition and retention work streams can each benefit from the use of segmentation, preference centers and self-directed user profiles to enhance experiences while making outreach more efficient and relevant. The new, more retail oriented model for care will embrace new technologies to make the consumer’s life easier, but must not neglect the basics when it comes to data and insight. Finding ways to test these approaches, even as resources are pulled in other directions, is critical for the marketing team.