Innovare's Vocal Insights at Blue Cross Blue Shield

Creating Great Consumer Experiences

Presented by:

Nick Kompare
Director, Strategic Marketing and Innovation
Excellus BlueCross BlueShield
&
Donald Ross, PhD, MBA
President
Innovare, Inc.

Copyright © 2000-2008, Innovare, Inc. All rights reserved.

2

3 “How To” Take Aways

• Broaden the organization’s focus from product development to
delivering high-value consumer experiences

• Immerse a broad cross-functional team into the voice of the
customer without placing too high of a demand on the team’s most
limited resource, their time

• Focus the organization’s capabilities and creativity towards creating
new interactions at all key touch points that differentiate the brand in
the marketplace


3
Excellus Health Plan

• A $5 billion nonprofit, mission-driven enterprise that
finances and delivers health care

• Based in Rochester, N.Y., doing business throughout the
nation

• One of upstate New York’s largest employers
– 2 million members
– 5,000 employees


4

Average Annual Worker Premium Paid by Covered Workers

$3,500 $3,281* $3,354
$2,973*
$3,000 $2,713
$2,661*
$2,412*
$2,500
$2,137*
$2,000 $1,787*
$1,543 $1,619
$1,500

$1,000 $694* $721
$558 $610 $627
$466* $508
$318 $334 $355
$500

$0
1999 2000 2001 2002 2003 2004 2005 2006 2007 2008

*Statistically different from the previous year shown (p<.05).
Single Coverage
Source: Kaiser/HRET Survey of Employer-Sponsored Health Benefits, 1999-2008.
Family Coverage


5

Healthcare Costs Shifting to Consumers

• Consumer insulated from true cost
% Consumers Offered High
of care
Deductible Health Plan
• Costs continue to escalate
– Rx 39%
– Imaging technologies
• Major expense for businesses
• Shifting costs to consumers
18%
• High Deductible = “Consumer
Driven”
• Result: The reluctantly empowered
consumer

2005 2007
Source: 2005, 2007 BCBS Association Consumer Driven Health Plan Survey


6

Our Internal Focus

• Excellus BCBS emerged from several separate entities
– Near term focus on merging systems and processes

• Historically have battled the competition with new products
– Benefit combination and price point

• Consolidated systems will result in efficiency
– Competitive point of parity


7

The Business Problem

• Swimming in the “red ocean”
– Commoditized, price wars

• Historical focus on employer groups
offering (1st stage of sale)

• Need to better understand, target the
end consumer

• Differentiate to become a destination for
“Health” throughout each life stage
– Provide value when healthy


8
Service Industries Tend to be “Product”-centric

Innovation Types
Value Creation Innovation Efforts
Finance

Business Model How you make money

Networking How you join forces with other companies
Process

Enabling Process

Core Process

Product Performance How we design our core offerings
Offering

Product System

Service

Channel
Delivery

Brand

How your customers feel when
Customer Experience they interact with your company
Source: Doblin Inc and its offerings
VHA Health Foundation Low High
Study 2007


9

Project Deliverables

• Business Need
– Develop and sustain a long-term competitive advantage
– Shift to consumerism in health care requires that we understand our customers and what they
value
• Improve relationships with our customers based on a deeper understanding of needs
• Provide additional services to customers based on their needs
• Increase customer service and loyalty

• Evolve from a transaction processor to a source for health and wellness

• Provide a differentiated customer experience

• Project Description
– Define who our target customers are; define by segment, life stage.
– Determine what customers need throughout their lifespan/at each life stage.
– Determine potential business models for how needs can be met and services delivered


10

Innovating at Key Touch Points – Team Implications

• Engage very broad cross-
functional team HFL Steering (VP Level)
Cenette Burdine (Chair) – Brand Mgt
– Touch point owners Nick Kompare – Strategic Marketing and Innovation
Lynn Ford-Somma – Market Intelligence
Karen Black/Patti Ciciarelli – Customer Service
Marty Lustick, MD -- Provider Network Strategy
Carrie Frank -- Clinical Performance Support
• Do not “tax the taxed” Mike Cardillo – IT/ (Transformation)
Chris Bergeman -- Transformation
– Can’t significantly burden key subject Jim Spencer – Finance
Karen Doyle - Finance
matter experts
HFL Work Group (Dir Level)
Nick Kompare: Co-Chair
Lynn Ford-Somma: Co-Chair
Pat Culeton – Project Manager
Aaron Bertram -- Transformation
Nancy Sakran, Wendy Besio – Creative Business Solutions
Norm Lindenmuth, MD – Provider Strategy
Julie VanRenseallar – Clinical Acct Mgt
Will Seabold – Medicare
Colleen Schmidt – Safety Net
Jeffrey Pankow, Eric Stephens – IT
Doug Sanger, Rick Roberts – Finance
Jeanne Chirico -- Lifetime


11
Outwardly Focused Front End Process

• Formal discovery phase before ideation and concept development
– Best practice front end increases innovation potential

• Chartered sub-groups to create discovery insights in 3 areas
– Consumer needs using VOC methodology explored by the Innovare team members
– In parallel, Excellus team members explored:
• Drivers of the healthcare market
• Evolving technology – particularly IT and use of the Internet

Informs Ideation &
Concept Development


12

Vocal Insights Approach ®

Voice of the Customer discovery interviews

• Recruit to quota 36 consumers
– Range of life stages, life styles, and health situations

• In-depth 1 on 1, immersion interviews (1 to 2 hours)
– How they manage their health and wellness, navigate health care, and deal with health plans

• Consumer led conversation – pick a topic and let the consumer take us to
what they find important
– Encouraged story telling, describing events
– Probed for contextual details, meaning, feelings and emotions
– Listened for what worked, the friction points, their work arounds

• Explored their world from their perspective
– Discovered their experiences, processes, perceptions, challenges and needs


13

Hands-On Team Immersion Enables Local Innovation

• Wanted to enable the broadly based cross functional team
and their organizations to innovate at all touch points with
consumers
– Without placing too many demands on their time

• Structured the project to provide a hands-on Immersion
Workshop to transfer the VOC findings to the team

• Immersion Workshop created an “almost like being
there” experience for the team members
– Team interacted with the VOC data in a more meaningful and
engaging manner than merely reading a report
– Imbedded the customer experience knowledge deep within the
team providing the foundation for ideation


14
Project Flow

• Innovare conducted the field work and prepared for team
immersion by processing the interviews into written
“Images”

• Cross functional team used the “images” to develop a deep
understanding of consumer needs and develop consumer
experience targets
Two 2-day
full team
workshops
• Cross functional team to create a range of innovations
designed to deliver the experience targets at all key touch
points


15
Team Immersion Through Images

• Images and Image Mapping
– Images are short written statements from the voice of the customer
– A group can review and organize images into a conceptual framework
using an Image Mapping process

• Image Mapping allows for 3 important team experiences
– They share and talk about the consumer images
– They internalize the images
– They create a shared understanding about what’s going on in the
consumer’s life, from the consumer’s perspective
ation
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16

Sharing and Mapping Images


17
Immersion - From Images to Needs to Insight Storyboards

Maps of the Customer’s World

“Context”
Situation & occasion
Engaging
Activities…

Expressed as the Customer’s
Activities should Creating activities is
be social .. a challenge… Desired Outcome and
A rapid-fire trivia The entire class
Experiences
game … twisting and

Insight
Storyboarding

Teeth clenched,
hands white
knuckled,

I can hold the
bottle in one


18
Storyboarding – Fun, Creative Task to Reinforce Learning

Insight Storyboard
• Storyboards used for:
– Articulating the customer need as
outcomes
– Inputs during informed ideation
– Sharing the insights across the Ideation
organization


19

“How To” Deliver the Consumer Experience Targets?

• Focus of the Concept Development
– Define new processes and new products that
deliver the experiences at each touch point

Ic
pe an o
I can trust the health plan rso w
to do what is right for me na n a
l h nd
ea m
lth an
I can have reliable
inf age
or
healthcare information ma my
that I can understand tio
n


20

Two-Day Concept Development Workshop

s
step
Three

• Divergence
Idea

Id
Id

ea
ea
• Convergence Idea Beginning
Concept
Idea

Id
ea
Id
ea
Idea
• Articulation


21

Divergence

Brainstorming using the discovery insights to create beginning ideas
W
W ow
ms d… Co hat Exp
al tea nee
ion he • n s ex e
on nct fy t id pe rien
ati fu atis • G er w rien ce
Ide l cross rd to” s e
ven al boa n “how • Se ne hic ce Ex
Dri to sm ory r
s
eed eak in eed st ideas
o Br lec ate h lif wou cur
N ai t th a e l s
Br an nin
g ns qu sta d “w ion
• ect gin to e to
Sel be rm p ick ge ow
• ate wa 10 list and ” co
Cre ys wh ns
• to at um
de sit ers
li v ua ?
er tio
n


Idea 22

Id
Id

ea
ea
Convergence Idea Beginning
Idea
Concept

Transform beginning ideas into working concepts

Id
ea
Id
ea
Idea

• Step 1 - Itemized Response
– Select beginning ideas for energy
– Develop an itemized list of what the solution could be
• Need it addresses, how you deliver it, the technology, the
challenges…
– Re-write the idea as a concept statement based on the team dialog

• Step 2 - Ways and Means
– Select the challenges, and problem solve each issue

Convergence defines the concept, increase its feasibility, and lays
out the development path


23

Articulation

Transform the working concepts into concept descriptions and
synthesized inputs for the strategic recommendation

• Use concept description templates
• Output ~ 12 fully articulated concepts
– Covering new processes, services, and products that will
deliver the targeted consumer experiences


24

Path Forward

• Kick off several “Development” efforts
– Flesh out requirements; determine more about “what” the concept is and “how” it would
work
– PHR, Limited benefits products, web enhancements

• Build information infrastructure to capture customer information, enable
customer intimacy
– Realization that current customer information, collection capabilities are inadequate
– Documented 200+ requirements for new info systems

• Develop strategic framework, criteria
– Used as filter for existing project in flight; use to consider future projects
– Input into budget process


25

Success Factors

• Team structure
– Involving the broad organization and linkage upward with senior management

• Strong team leadership
– Boundary role to keep stakeholders on board

• Efficient learning process
– Not too much burden with good content and fun activities

• Sharing images and story boards
– Engaging the entire organization about customer needs

• Open-minded discovery
– Truly listening for customer needs

• Safe development minded environment
– Enabling team creativity and go where they might not have had permission
before


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