1. 9/30/2011
The Next Extraordinary
Marketing Opportunity
Lindsay R. Resnick
Chief Marketing Officer
Game Changer
Retailization of healthcare
"Health reform could benefit the insurance industry dramatically by generating
billions of dollars of new revenue and millions of new customers.
Harris Interactive
“Insurers will compete head-to-head as health insurance exchanges open up
a $60 billion market in 2014 reaching an estimated $200 billion by 2019
and covering 28 million people.”
PricewaterhouseCoopers
PwC Health Research Institute
“The health insurance industry is moving from wholesale to retail. A
direct-to-consumer sales process significantly changes the customer
mix insurers are used to dealing with.”
PNC Healthcare
© 2011 KBM Group CONFIDENTIAL & PROPRIETARY
Market Transformation
Customer Connection
Marketing Remix
User Experience
Opportunity Pathway
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2. 9/30/2011
If opportunity doesn't knock,
build a door (MB)
History of Transformation
Assess – Benefits – Cost
1960 1970 1980 1990 2000 2010
Medicare
Medicare
HMOs PPOs CDHPs Advantage PPACA
Medicaid
Part D
U.S. health care spending is $2.7 trillion going to $4.6 trillion in 2020 (20% GDP)
Average health care costs for families insured through their employer is $19,393
$3,280 Employee out-of-pocket
$11,385 Employer contribution
$4,728 Employee contribution
Health Care Reform
Marketplace churn
Patient Protection and Affordable Care Act (PPACA)
10-years, $940 billion, 32 million covered
2016 2016
2011 Scenario A Scenario B
Employer 160 150 115
Individual 18 11 25
Uninsured 50 20 26
Medicaid 40 53 56
Medicare 45 58 58
Exchanges 0 24 36
© 2011 KBM Group CONFIDENTIAL & PROPRIETARY
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3. 9/30/2011
Uninsured Americans: 52 million customers
Who are they?
Working families Low/moderate income
Adults v children Minority v white
Young adults High school only
Poorer health No coverage 1+ years
Don’t Want It Young Invincible
Pre-Ex Denied Temporarily Unemployed
Medicaid/CHIP Eligible Illegal Immigrant
Health Benefit Exchanges: 24 million customers
Organized, structured marketplace for individuals and small
businesses to access, shop and purchase health insurance.
• Deliver consumer information
• Provide plan choice
• Promote price competition
• Facilitate easy enrollment
VARIABLES HURDLES
• Participation standards • Administration & IT
• Benefit & rate variability • Eligibility & enrollment
• Off-exchange restrictions • Plan contracting & pricing
• Exchange navigator role • Risk management & network
• Build it…will they come? • Consumer outreach & navigation
© 2011 KBM Group CONFIDENTIAL & PROPRIETARY
Exchange Customers
Who are they?
Exchange consumers are expected to be older, less educated, lower
income and more racially diverse than privately-insured population.
Majority eligible for subsidies
(133% - 400% federal poverty level)
KEY DRIVERS
Previously uninsured or uninsurable • Price
(affordability, health condition)
• Benefits
Pent-up demand for healthcare • Network
Leaving employer coverage • Quality/Reputation
Desire decision support resources • Wellness
Small business employees
Travel Web Portals
(aka Exchanges)
90+ million visitors
© 2011 KBM Group CONFIDENTIAL & PROPRIETARY
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4. 9/30/2011
New Market Segments
Seize opportunity, buffer risk
SEGMENTS IMPLICATIONS
Previously Uninsured Product Diversification
Pre-Ex Timebombs Risk Profiles
Abandon Employees Compliance Maze
Opt-Out Employees Administrative Complexity
Individual Shoppers Provider Network(s)
Newly Subsidized Customer Experience
Medicaid Qualified Brand Position
Newly Medicaid Marketing Outreach
Medicare Boomers Distribution Channels
Medicare Switchers LifeTime Value
Fish where
the fishes are
Data Driven Marketing
Knowledge-based customer intelligence
Enriched Database
Accuracy Customer Connection
Currency Who are they?
Breadth What’s important to them?
Where do they go?
Advanced Analytics
How to get their attention?
Segmentation
What motivates them to buy?
Profiling
Why do they remain loyal?
Clustering
Predictive Modeling
Data driven, individualized consumer insights yield informed decisions
© 2011 KBM Group CONFIDENTIAL & PROPRIETARY
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5. 9/30/2011
Customer Segmentation
Data is the driver, knowledge is the asset
• Demographic attributes
• Socioeconomic status
• Psychographic characteristics
• Lifestyle choices
• Life stage or generational
• Responder indices
• Common purchasing behavior
• Attitudes and preferences
• Health or condition indicators
EXAMPLE: Digital Segmentation*
By knowing digital attitudes and behaviors across range of
technologies and devices marketers can deliver customized
messages to customers via their most preferred digital media.
Digital Devices Digital Destinations
KNOW YOUR DIGITAL COMMUNITY
Why consumers chose the digital devices they use
Will they re-purchase and/or upgrade
Who are early technology adopters vs. more conservative consumers
What are their digital activities: professional, entertainment, education, buying, bill paying
* Digital Neighborhoods 2.0
What matters today are
conversations
with & among consumers (LW)
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6. 9/30/2011
Multi-Channel Preparedness
Message to moments of maximum influence
Direct mail
52% mail volume $45 billion spend
Every 60-seconds
700,000 Searches 100,000 Tweets
Monthly online shopping
100+ million Amazon visitors
Mobile web
60% Smartphones 15 billion Apple apps
Third largest country
600+ million Facebook Users
Marketing Remix
Wherever, whenever, however
Product Price Data Direct
CUSTOMER CUSTOMER
Place Promotion Different Digital
Customers are in control. They’re talking about you, reviewing you,
and price checking you. They have a choice and they determine your
value…so listen to them and engage in their conversation!
© 2011 KBM Group CONFIDENTIAL & PROPRIETARY
Conversational Marketing
Offline to online continuum
LOW ENGAGEMENT ENGAGEMENT HIGH ENGAGEMENT
Push advertising Push messaging Customer dialogue
One-way, top-down Interactive Always-on, digital-only
Broadcast/print/outdoor Email/search/banner Social/mobile/video
Brand-focused Brand-response “Me” content focused
Mass marketing Mass-to-segment Narrowcast
20% consumers trust advertising… 80% consumers trust other consumers
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7. 9/30/2011
UR
UX
SUX
Consumer Engagement
Relationships revolve around customer touch-points
Healthcare Consumer Squeeze
• Benefit and Financial Choices
• Care Delivery Options
• Family Budget Priorities
• Intergenerational Navigation
• Retirement Planning
• Lifestyle Management
• Information Overload
72% consumer say health insurance so complicated
don’t know what’s covered or what it will cost them
Consumer Experience by Industry
Customer Experience Index, 2011: Health Insurance Plans, April 29, 2011
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8. 9/30/2011
UX
Every touch point in the relationship
a company has with its prospects
and customers.
The sum total of everything they see,
hear, feel and experience as part of their
interaction with your company―
…every visual encounter
…every telephone call
…every written word
…every transaction
…every online exchange
…every promise made.
Every experience is a branded experience
End-to-End UX
Create bridge of relevant connections
LOW ENGAGEMENT HIGH ENGAGEMENT
Knowledge Informed
Ignorance
Consistency
Confusion Cynicism Active Trusting
Transparency
Superior UX is a marketing tool extraordinaire!
© 2011 KBM Group CONFIDENTIAL & PROPRIETARY
Big ideas precede
big achievement
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9. 9/30/2011
Plan For Uncertainty
Transformation yields opportunity
Political
Competition
Regulatory
Consolidation
Value
Consumer
Chain
© 2011 KBM Group CONFIDENTIAL & PROPRIETARY
Eliminate Fogeyism
Entrepreneurship trumps bureaucracy
Decision paralysis
“Oh, health reform will be repealed”
Trend avoidance
“They’ll never buy this online”
One-way marketing
“But that’s the way we’ve always done it”
Cross-functional silos
“That’s marketing’s problem”
I
“That’s sales’ problem”
N
“That’s compliance’s problem” N OR DIE
O
V
A
T
E
Differentiate Brand
In commoditized and standardized markets…
- Define what you stand for
- Establish why you are different
- Articulate your unique value proposition
Clutter-Buster
What are your comparative
marketplace advantages?
Company
Why do you get beat Who are your “best”
in sales situations? most profitable customers?
Competition Customers
Give your “best potential” customers a reason to convert to
your brand and always have a pathway to loyalty.
© 2011 KBM Group CONFIDENTIAL & PROPRIETARY
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10. 9/30/2011
360º Customer Intelligence
Best customers, best channels
• Integrated data architecture
• End-to-end analytics
• Rich, actionable customer insights
• Personalized, creative communications
• Offline-to-online channel transitions
• Commitment to customer listening
• Leverage, optimize, leverage
Prepare for customers that never
had or bought insurance before.
Customer Interaction
Navigation resource and decision support
If we ask customers to shop for benefits and engage in clinical
decision-making, they need to be educated and supported
about how to make smart economical individualized choices.
Educate and guide your customers Provide information on price & quality
Reward healthy behavior & choices Reinforce purchase with after-sale sale
Marketing Remix
From monologue to dialogue
Data – from acquisition to retention to ROI, use informatics to optimize marketing
Different – break-through brand position and superior customer experience
Direct – accountable creative supporting retail healthcare selling channels
Digital – high engagement, socialized marketing to keep pace with customer trends
Identify opportunity and fine-tune relationships
by listening to and joining customer conversations
© 2011 KBM Group CONFIDENTIAL & PROPRIETARY
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11. 9/30/2011
Questions Lindsay R. Resnick
Chief Marketing Officer
Comments Phone
Email
773.372.4961
lindsay.resnick@kbmg.com
Web KBMGhealth.com
Observations Blog
Twitter
lindsayresnick.com
@ResnickLR
Opinions
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