Kevin Riley

Learnings on Key Influencers for modelH

By imagine.GO kevineriley
2013-09-23
Business Model Innovation,Customer Experience Innovation,Healthcare Innovation

We just wrapped up our business building block sprint on Key Influencers. It was part of a double header where we also looked at Intermediaries in healthcare business models. In summary, the sprint for Project 1.7 Key Influencers completed 2 main objectives:

Questions to Ask on the Canvas for the Key Influencers Block
How to Identify and Use Healthcare Key Influencers

In healthcare at least, the successful resolution of a JTBD by a Customer Segment, and the full realization of the corresponding Value Proposition, usually requires some form of activity, activity set and/or behavior change by the User. In modelH, this activity is called Key Behaviors. Key Behaviors can be positively and negatively stimulated by certain individuals connected to the User – in modelH, these people are called Key Influencers.

This is not to be confused with Intermediaries, which are present in a business model between the Value Proposition and the Customer Segment. Key Influencers affect the User’s understanding and completion of their JTBD, where Intermediaries affect how the Value Proposition is seen and paid for by the Buyer (which may or may not also be your User).

Everyone needs a little help! There is plenty of science that shows that people make behavior decisions easier, and have better completion rates when they learn and act in unison with others. It is natural to the human condition to be influenced by our peers. Healthcare is no different.

This block looks at how we can best make use of the Key Influencers in our business model. Doctors, family, friends, co-workers – all of these can be informal or formal Influencers. Companies and organizations should account for and take advantage of this network of Influencers to help ensure their Customer Segments realize the fullness of their Value Proposition.

In particular, given that Providers of care are so important in the process of influencing Key Behaviors, it would be wise for a company that wants to elicit those Key Behaviors to formally work with the Influencers, thus making them a Key Partner. However, so few companies do this very well, if at all. It really calls into question so many of the existing healthcare business models that exist today.

There is a path from Influencer to Key Partner; starting first with recognizing what Key Behaviors can and should be influenced, and how a company can use Key Influencers systematically for those Key Behaviors.

Our canvas should help practitioners both:

1) Design business models where a Key Influencers can add value to a JTBD, and

2) Design business models that transform crucial Key Influencers into Key Partners.

1^st – Questions to Ask on the Canvas for the Key Influencers Block

Here are the questions we determined we needed to ask for the Key Influencers Block in our modelH business model canvas for healthcare.

What Key Influencers are required for the Buyer & User to realize the Value Proposition?
What parts of the JTBD do the Key Influencers affect?
How do the Key Influencers communicate with the Buyer & User?
What is required for your Key Influencers to understand your business model?
How can you activate Key Influencers without adding Cost?
How do you turn Key Influencers into Key Partners without adding Cost or Complexity?

2^nd – How to Identify and Activate Healthcare Key Influencers

We also had some very detailed thoughts around how to identify and activate the Key Influencers you defined in the canvas questions for the Key Influencers block?

Using the modelH method, we advocate that you actually create the Key Activities based on the Key Behaviors that your User must do to complete their Job-to-be-done (JTBD). The 3 strategies for finding the Key Behaviors are:

1) Identify the critical behaviors that have cascading impact on the JTBD,
2) Identify the critical moments when those behaviors must be acted upon, and
3) Identify sources of positive deviance by looking across the User’s network to find out “who succeeds despite the odds” and “what do they do differently?”

We discuss these strategies in our building block on Key Behaviors.

But as we know, Users can be influenced in their Key Behaviors through others. Influence is the ability to change behavior in others. An influencer creates motivation in others to change. An influencer can motivate others to replace bad behaviors with better ones however sometimes an influencer can actually promote or reinforce the bad behaviors. In short, an influencer can make things happen. This building block is about helping the User in their JTBD through the use of Key Influencers.

How do you identify your Key Influencers?

This is the “who” part of the equation surrounding Key Influencers in modelH. What sets Key Influencers apart from others is their ability to apply, if not understand and utilize, the theory of behavior change. We talk about how to properly activate the Key Influencers you identify in the next section. The first step is finding them.

Modern behavior science shows that not all influencers are the same. As such, it is critical to find the “right” influencer and use their capacity to produce profound, rapid, and sustainable behavior change in your Users.

In modelH, we call a person who influences our customers a Key Influencer. A Key Influencer affects our Customer Segment’s (Buyers & Users) Key Behaviors, which drive their ability to complete their JTBD, and thus realize the full value of our business model’s Value Proposition. In short, we are looking to apply influence through others to ensure our customers can use our products in order to receive the best result of our business model. In this effect, we are looking at how to first, identify the Key Influencers and then second, to activate them within our Value Proposition.

Like the method we applied for Intermediaries, we suggest you try to first isolate (identify) the Key Influencers by defining a canvas specific to their business model in relation to your Customer Segment and then re-insert them back into yours based on their Key Activities, Value Proposition and Customer Relationship. We believe that this is a valid approach and can actually lead legacy businesses to rethink how they approach their own intermediaries – and possibly even seek to disrupt them. Once you identify your Key Activities, you can use the methods described here to activate them.

Furthermore, business models that seek individual health consumers as the Customer Segment will do well to systematically craft their Customer Relationship and Experience. It is essential to consider the needs of caregivers who influence health-care decisions as well as the actual patients (Users). Therefore, it is critical to actually create Key Activities for the User and (again depending on the business model) the Key Influencers, Key Partners, and Intermediaries. Each may/will be different in context as well as subtext for the Buyer/User and the various other persons in their circle of influence.

How do you activate your Key Influencers

This is the “how” part of the equation surrounding Key Influencers in modelH.

Persuasion is the act of using deliberate communication to change the way people think, feel, or behave. Persuasion in the short term can lead to long-term influence. We advocate for using the Influencer Model[1] to persuade your Key Influencers to influence your Users.

We have to first understand how people adopt behaviors so we can then best activate Key Influencers into the Value Proposition. It is unrealistic in most business models to provide a high touch, one to one service unless you can extract revenue through a premium price point that Buyers are willing to pay for. For those types of business models, direct activation of the User is by far better than through the Key Influencers or Intermediary. But for most healthcare business models, we need to find a means to affect high touch with a much less expensive set of Cost Drivers.

People tend to have friends who are similar to them. They “hang out” with people who share their interests, beliefs, and behavior. In behavior science, this is known as homophily. Social network research supports this concept, but in an interesting ways. Scientists have shown that humans are more likely to adopt new health behaviors when engaged in close networks of people they already know well[2]. The research shows that getting people to change ingrained habits requires the reinforcement that comes from the redundancies that occur within a close contact network. Meaning, humans need to hear and see a new idea within their circle of friends, multiple times, before they can commit to adopting that behavior.

Based on recent breakthrough research, insights from behavioral scientists and business leaders, and as outlined in the book Influencer, we believe that persuasion from our Key Influencers can be leveraged by identifying the “high-leverage” Key Behaviors that lead to rapid and profound change. Using the “six sources of influence” model will aid in the design of the corresponding Key Activities for both Users and Key Influencers into our business model.

The Influencer Model organizes influencing strategies into six sources that both motivate and enable people to change through personal, social and structural forces. They are the reasons why humans behave a certain way: personal motivation, personal ability, social motivation, social ability, structural motivation, and structural ability.

Here is how we suggest activating your business model’s Key Influencers to help your Users:

Source 1 – Personal Motivation. Help your Key Influencers to build personal motivation in your Users by giving them a platform to relay relevant personal experience about the Key Behaviors.
Source 2 – Personal Ability. Help your Key Influencers to build personal ability in your Users by giving them deliberate, hands-on practice of applying the Key Behaviors in real-life situations.
Source 3 – Social Motivation. Help your Key Influencers to build social motivation in your Users by creating directed informal influence through the network of people they already know well.
Source 4 – Social Ability. Help your Key Influencers to build social ability in your Users by giving them the individual support required to enact new behaviors in a team-based approach.
Source 5 – Structural Motivation. Help your Key Influencers to build structural motivation in your Users by propagating incentives and rewards through new behaviors.
Source 6 – Structural Ability. Help your Key Influencers to build structural ability in your Users by using technology to create cues, reminders, and reports that keep their new behaviors real and present.

Our concept of identifying the Key Activities of our Users to be affected by the Key Influencers can be applied to both good and bad behaviors. Remember, in modelH we seek to drive the Key Behaviors of our Users so they can complete their JTBD. We now know that that Key Behaviors are more easily driven when a User is connected to a body of influencers, and you in turn can leverage that structure for a positive outcome. The same can be said for stopping the negative behaviors that pull a User away from their JTBD. Change how the Key Influencers reinforce those negative behaviors, or convince your User to change their contact patterns. Likewise, while the research shows that immediate social bonds are stronger in regards to affecting behaviors, getting someone and their network of Key Influencers to engage in structured and healthy Key Activities is difficult.

Using Technology with Key Influencers

Activation of Key Influencers in your business model can be expensive and time consuming. This is where technology can play a part. Though we will discuss this in detail during our Platform building block section, it is worth mentioning here in context the enabling of the Key Influencers in your business model.

As in all business models, technology creates a lower cost of performing Key Activities and can be a competitive differentiator. As such, there has been a rush to create online communities and deploy them through traditional employer wellness programs as well as some direct to consumers. These have been improved by extension of the social wellness platform into the mobile arena. This makes sense as smartphone penetration includes greater than 50% for not only all mobile subscribers but all adult Americans as well[3].

Technology has always served to reduce the cost of touch. What used to require a person-to-person connection, can now be automated though technology. Nurse lines and patient calls can be set up as reminders through a smartphone. Technology also reduces the cost of compliance with Externalities. Consider how it has been applied to claims processing and electronic medical records, moving the healthcare industry towards paper-free. Technology can also reduce the prices on high demand items. For example, prices for cosmetic surgery have remained flat or dropped while producing higher outcomes, mainly due to the demand for these procedures (sixfold since the early 1990s), driving these significant technological advances.

Technology can enable, depending on the business model, the Key Influencers, Key Partners, and Intermediaries to drive behavioral change as it helps to move healthcare from out of hospitals and doctors’ offices to wherever patients are. Several studies support that technology has become a significant Channel in healthcare. But it is really only as good as the Key Influencers, Key Partners, and Intermediaries that they are using to spread information and help health consumers with their JTBD.

The 2012 study, The Pew Internet & American Life Project, found that 85% of all US adults use the Internet. Interestingly however, the 2011 publication of Surprising Decline in Consumers Seeking Health Information[4] by the Center for Studying Health System Change showed in 2010, 50 percent of American adults sought information about a personal health concern, down from 56 percent in 2007. This may result from the growing use of mobile technology.

In the study Healthcare unwired: New business models delivering care anywhere[5] by PricewaterhouseCoopers LLP, it showed mobile technology holds great promise for keeping people healthy, managing diseases and lowering healthcare costs. In the study, Mobile Health: Uptake by Consumers and Care Providers[6] by Parks Associates finds that consumers are using mobile technology:

To access health and wellness information, track personal health conditions, and interact with care professionals and care organizations
For motivational factors, satisfaction, and other health-related unmet needs
For social networking on health-related purposes
On games to improve their overall health and well-being

The 2012 2nd Annual HIMSS Mobile Technology Survey[7] shows a growing percentage of providers adopting mobile health tools into their practice as another means of engaging patients directly in their care. Mobile technology, or mHealth, is powering business models in chronic disease management, senior care, pregnancy, medication adherence, and medical system efficiency[8].

However, at this stage most of these are still centered on practice enablement as opposed to patient enablement. This is because practice enablement represents the more lucrative revenue source for the business models that drive these technologies to market. But just because these Influencers, Key Partners, and Intermediaries are adapting mobile health, it does not necessarily translate to adoption by Users. Interestingly, another study[9] estimated that 247 million people downloaded health apps on their mobile phone in 2012. This was close to doubling the rates from 2011. But here again, just because they are being downloaded (many times for free or at the very low opportunity cost of $.99) are they being used? While there is definitely a growing interest, there is also the growing concern of the Externality that could be placed on this Channel if the FDA decides to view mobile health tools under the terms of a regulated medical device.

While giving health business models a better sense of how to successfully influence the influencers, technology is far from the only answer to activate Key Influencers. But it does seem to be among the best given the constraints and costs of using other methods. The trick is to find out what combination of touch (Customer Relationship), technology (Experience) and method (Channel) make the highest impact on the Key Influencers you have identified for your business model.

In Conclusion

In conclusion, we advocate that you take time to define the Key Activities that you want you Key Influencers to perform on behalf of your User and your Value Proposition. In this was you can construct your own Key Activities that are required to use the six sources of influence to activate your Key Influencers.

In conclusion, take time to incorporate these approaches into the Key Influencers block in your business model canvas. Regardless of whether your business model is aimed at Patients, Providers, Payers, and or Purveyors, defining the Key Behaviors as well as the Key Influencers will ensure your Customer Segment can complete their JTBD and realize your Value Proposition to its fullest.

What is Next?

Next up we are going to look at defining Channels in healthcare business models.

Interested in what we are doing? Step up to the plate an get involved.

Click here to learn more: http://bit.ly/modelH-keyresources
Click here to join: http://bit.ly/modelH_joinup
Follow us online at: https://twitter.com/ModelHForum

To your health,

The Team at imagine.GO

[1] Source: Influencer: The New Science of Leading Change, Second Edition, Joseph Grenny, Kerry Patterson, David Maxfield, Ron McMillan, Al Switzler, http://www.amazon.com/Influencer-Science-Leading-Change-ebook/dp/B00BPO7710/ref=sr_1_1

[2] Source: “The Spread of Behavior in an Online Social Network Experiment,” by Damon Centola. Science, 03 September, 2010.

[3] Source: Forbes http://www.forbes.com/sites/markrogowsky/2013/06/06/more-than-half-of-us-have-smartphones-giving-apple-and-google-much-to-smile-about/

[4] Source: Center for Studying Health System Change, Surprising Decline in Consumers Seeking Health Information http://hschange.org/CONTENT/1260/?

[5] Source: PWC, Healthcare unwired: New business models delivering care anywhere http://www.pwc.com/us/en/health-industries/publications/healthcare-unwired.jhtml

[6] Source: Parks Associates’ Mobile Health: Uptake by Consumers and Care Providers http://www.parksassociates.com/services/mobile-health

[7] Source: http://www.fiercemobilehealthcare.com/story/mhealth-technology-use-clinicians-surges/2012-12-04

[8] Source: How Mobile Devices are Transforming Healthcare, Darrell West

[9] Source: research2guidance Mobile Health Market Report 2013-2017 http://www.research2guidance.com/shop/index.php/mhealth-report-2

Learnings on Intermediaries for modelH

By imagine.GO kevineriley
2013-09-20
Business Model Innovation,Healthcare Innovation

We just re-wrapped up our business building block sprint on Intermediaries. This is one we previously started and put away until examining Key Influencers. In summary, we completed 2 objectives:

Questions to ask on the canvas for the Intermediaries
Identification and activation of healthcare Intermediaries

1^st – Questions to Ask on the Canvas for the Intermediaries Block

We defined the questions that should be added to our business model canvas for helping practitioners define their Intermediaries.

How does an Intermediary influence the Buyer?
Does the Intermediary act on behalf of the Buyer, the Value Proposition owner, or themselves?
What Costs does the Intermediary add to the business model?
What Costs does the Intermediary add to the Customer Relationship?
What impact does the Intermediary add to the Experience?
Can the Intermediary be disintermediated?
Is your business model an Intermediary within another business model?
If so, can you be disintermediated?

2^nd – How to Identify and Use Healthcare Intermediaries

We also built assistance for practitioners regarding the identification and use of the Intermediaries that exist in their healthcare business model. We asked how do you identify and activate/disintermediate the Intermediaries you defined in the canvas questions for the Key Influencers block?

Not all intermediaries are bad. In fact, they would not exist if there was not some flaw inherent in the business model already. No one wants to pay more or spend more time than they have to, yet many healthcare business models leave the Buyer and User utterly confused, the Value Proposition unrealized, and the JTBD incomplete.

Most successful business models started as some form of intermediary. Those that are successful now dispute their intermediary origins. The problem lies when the Intermediary becomes locked into a static model and actually works to prevent better models from surfacing. In healthcare, this has lead to run away costs close to 18% of the GDP.

But healthcare is complex, and most Buyers and Users have poor situational fluency. In this way, many great healthcare business models require a helping hand from an Intermediary to make sure a Value Proposition is understood. In these markets, Intermediaries bridge that gap and assist and improve the Customer Relationship, and as such are essential.

Furthermore, healthcare is large, containing distinct markets where only giant players can survive. This creates a natural resistance to change and usually yields profits for the company and a poor Experience for the Customer Segment. In these markets, Intermediaries force the legacy players to act on behalf of the Customer Segment, and as such are essential.

So given all of this, how do you identify and activate Intermediaries when they are needed and good, and disintermediate them when they are not?

We suggest you try to first isolate the Intermediaries by defining a canvas specific to their business model and then re-insert them back into yours based on their Key Activities, Value Proposition and Customer Relationship. We believe that this is a valid approach and can actually lead legacy businesses to rethink how they approach their own intermediaries – and possibly even seek to disrupt themselves.

In Conclusion

In conclusion, we know that Intermediaries are an embedded part of the healthcare system. But not all intermediaries are bad. Case in point lets look at the evolution of the retail clinic, sometimes called convenient care clinics. In 2004, these clinics were seen by the American Medical Association as an unnecessary intermediary to the structure of the existing primary care doctor. Many complaints were leveled against them ranging from their lack of qualified medical practitioners to their creating a gap between the patient and their primary care physician. Ten years later, we have seen almost every general practice office staffed with NPs and PAs to create what seems to be fewer and shorter visits with the doctor. Furthermore, the retail clinics were the first practices to adopt the electric medical record en masse. This is now seen as a standard requirement for any practice. Finally, many regional hospitals have begun experimenting with opening their own retail clinics to augment their coverage and provide a smarter triage for their patients.

As part of your business model you should work to identify and activate Intermediaries when they are needed and good, and disintermediate them when they are not!

Take time to incorporate these approaches into the Intermediaries block in your business model canvas. Regardless if your business model is aimed at Patients, Providers, Payers, and or Purveyors, defining the Intermediaries between your Customer Segment and your Value Proposition is important to creating your best business model.

What is Next?

Next up we are going to look at defining Channels in healthcare business models.

Interested in what we are doing? Step up to the plate and get involved.

Click here to learn more: http://bit.ly/modelH-keyresources
Click here to join: http://bit.ly/modelH_joinup
Follow us online at: https://twitter.com/ModelHForum

To your health,

The Team at imagine.GO

Teaching NEXT for Startups

As part of my commitment to building an entrepreneurial community where I live in Florida, I will be teaching Steve Blank’s (the world renowned guru for Startups) “Pre-Accelerator” program called NEXT. NEXT is a five-week “pre-accelerator” program rooted in Steve Blank’s Customer Development methodology. The NEXT program helps founders gain a crucial base of entrepreneurial skills and knowledge. It will focus on customer discovery, big market/big ideas, fundability, communication and go-to-market themes.

Here are the details:

When: Saturdays, September 28—October 26 | 1-4 pm EST
Where: University of North Florida Bldg. 15, Rm. 1303
Cost: Early Bird Single Ticket – $99 until 9/14| Regular Team Member Ticket (min of 2 tickets) – $99 until 9/21 | Students/Veterans- $75 until 9/19| Prices increase after 9/21
In Person Class: Sep 28, Oct 5, Oct 12, Oct 19, Oct 26

So you know, I make no money at this. It is part of my boardship for the non-for-profit iStartJAX and is a labor of love. I am considered somewhat of a serial entrepreneur.

To learn more about Steve Blank and the value of this method, here is a good video. Blank summarizes the three most important steps in the discipline of startup development.

Business Model Canvasing (Osterwalder, modelH)
Customer Development (NEXT)
Agile Engineering (Minimum Viable Product)

I have written a host of articles on Business Model Canvasing and I am in the process of developing a model and book specifically designed for healthcare, called modelH. You can read more about that here. For NEXT, course participants will immerse themselves with Steve’s concepts utilizing Alex Osterwalder’s business model canvas.

I have also written about the use of Minimum Viable Product and its importance to the lean startup. You can read more about that here.

For the customer development piece, we are going to provide hands-on, interactive, and practical application. This is not a theory course – we will be developing our customers for our startup ideas, me included! As participants, you will be able to:

Receive constructive feedback and clarify business assumptions;
Discover new customers, customer segments and/or validate existing ones;
Generate and test prototypes and revenue models;
Amplify your network by interacting with like-minded entrepreneurs who are lean thinkers; and
Interact with entrepreneurial mentors of our local community.

I wanted to give you a preview of presentation topics. I will write more about these as we engage. You can see the full details here: Source:

Week 01: Customer Discovery

Knowing your customer is the number one priority of any company. As such, we will set out to help you define who you building your product for, their pain points, and what they need. We will introduce customer interviewing and come back to it each week. It is that important to the success of a business model

Week 02: Big Markets, Big Ideas

This week will help bring some reality checks to your idea and how it fits into the “market”.

Week 03: Fundability

Sales from customers are the best funding you can receive, but sometimes outside investment is required to scale a company. But just because you need money does not mean your idea is “fundable.” This week is about getting money for your idea – assuming it is even fundable.

Week 04: Pitching Your Idea

This is about the right way to sell your idea to investors, customers, and the market.

Week 05: Go to Market

Before you launch your product, you should have a basic understanding of models and what go-to-market tactics work and don’t work with each model. This week is about how to go-to-market successfully.

As you can see, we have a lot of work to do. I hope to see you there.

To your health

The Team at imagine.GO

Learnings on Key Behaviors for modelH

By imagine.GO kevineriley
2013-08-23
Business Model Innovation,Healthcare Innovation

We just wrapped up our 6th business building block sprint on Key Behaviors. In summary, we completed two main objectives:

Questions to ask for the canvas on the Key Behaviors building block
Defining how to create healthcare Key Behaviors

To do this successfully, we also asked some additional questions that were relevant to this building block:

What is behavioral economics and why does it matter for health?
What is behavior change how does it affect health?
What do rewards and incentives have to do with health?

Questions to Ask on the Canvas for the Key Behaviors Block

We defined the questions that should be added to our business model canvas for helping practitioners define their Key Behaviors:

What Key Behaviors are required from the Customer Segment (Buyer & User) to complete their JTBD and realize the Value Proposition?
What negative Key Behaviors must be overcome by the User?
Which negative Key Behaviors result from your business model and how can they be removed?
How difficult will adoption of the Key Behaviors be for the Customer Segment?
Which of these Key Behaviors require stimulus from Key Influencers?
Which of these Key Behaviors are affected by Intermediaries and how?
What behavior change model(s) are you using to drive the Key Behaviors?

How to Define Healthcare Key Behaviors

We also built a model for helping practitioners define their healthcare Key Behaviors. This is in addition to the answers derived from the questions asked for this canvas building block. The result of this block should produce some Key Activities that your business model needs in order to help the Customer Segment realize the full Value Proposition.

“Behaviors” are the (re)actions of an entity to stimuli within a system. In modelH, your Customer Segment is the entity and your business model is the system. To understand what action you want to be performed by your Customer Segment, you have to understand the Key Behaviors required by your business model. Behaviors are at the heart of any healthcare business model, but behavior change is extremely hard to do. Try it on yourself and you will see. Most Users think of managing their health as either too difficult or too tedious. The effect is poor health. For business models that rely on healthy Users to be profitable, this is a problem. For business models that drive behavior change for health Users, this is a bonus.

But either way, Users are humans and as humans they think and act irrationally at times. If you understand this variable, you can use it to elicit the responses you want. They key is to deliberate and build the Key Behaviors into your business model using a systematic process – this new science is referred to as Behavior Design. The modelH method for defining Key Behaviors is as follows:

Enumerate the Key Behaviors
Apply a Behavior Change Model
Build Behavior Triggers Into Your Key Activities
Reward and Reinforce the Key Behaviors

Enumerate the Key Behaviors

The critical first step in this process is to map out the Key Behaviors you need to elicit to make your Value Proposition work. These Key Behaviors can be mapped out as a series of user flows or steps. You must first define what the User must do, as well as what you and your business model must do, to help the User start and finish their JTBD. This will come in two forms – what you can directly influence, and what must be indirectly influenced through others. Keep in mind the User is affected by both Intermediaries and Key Influencers, so that will have to be taken into account.

These steps occur before, during, and after a User completes their JTBD. Some behaviors are positive and reinforcing to the steps. Unfortunately, many others have the opposite result.

All controllable behaviors can then be evaluated for the actions needed to encourage future Users. In addition, the uncontrollable behaviors can be evaluated for how to help Users avoid them. It is critical in a realistic business model to understand the complexity of the behavior change necessary for the User to complete their JTBD.

It is accepted thinking that Key Behaviors are needed to create good health conditions, but what about Customer Segments who refuse to implement them? Not willing to change behavior is a Key Behavior as well.

Understanding the major principles of Behavioral Economics and the decision-making models people use will greatly assist your work in this area. Behavioral Economics is the study of the decision-making process humans go through as they weigh opportunity costs (and benefits) to calculate the right choice that will yield the maximum benefit. In order to drive the Key Behaviors, we need healthcare Users to perform and do so consistently. We must understand how they make decisions to buy and use our Value Propositions. A business model can use these principles to impact a Buyer’s purchase decision and a User’s usage decision by employing them into Value Propositions. This can be done via a product development cycle, into Customer Relationships via the marketing plan, and into Channels via the experience design. Some examples of these decision models are choice architecture, hyperbolic discounting, optimism bias, information avoidance, loss aversion, and many more.

This process will illuminate where changes both large and small need to occur. However, this process also requires that you be honest with your own business model and the effect that it has on your User. You should focus on identifying any negative stimuli that your business model creates or enables, particularly in the sense of shared value we so often advocate.

Apply a Behavior Change Model

Once you have the Key Behaviors mapped out, determine how to get people to do the first behavior in the user flow. If this first step is obstructive or unnatural for your User, figure out how to get the next Key Behavior to happen. In a step-by-step manner, you should continue this process until the user flow has a reasonable chance of happening. The idea is that Key Behaviors will not happen in one step, but rather progresses through stages on the way to a successful change. Moreover, they will occur at an individual pace as each User is affected differently by the change they enact. Certain types of people have a higher prevalence to sustain change than others. Each behavior also requires a readiness to change before change can happen.

Behavioral Change is the science of understanding how effectively human beings can take actions and sustain them relative to personal goals. This transition progresses in the face of issues and tasks that relate to changing behavior. Simply put, it is the study of how we make and break habits – good and bad. When applied to healthcare business models, the result is the ability of a User to perform the Key Behaviors necessary to complete their JTBD and realize the Value Proposition. Business models should understand and incorporate applicable behavior models into how they enumerate their Key Behaviors. Therefore, they can realistically assess the likelihood of their Value Proposition realized by their Customer Segment.

There are several proven models that can be applied to ensure defined health behaviors. I caution that there is no one size fits all for choosing a behavior model. Some Key Behaviors are too complex for a given model, and some are too simple. You may need more than one model depending on the actions you are trying to elicit. The key is to match your stimulus to the system.

Some of the most popular ones are shown in the list here:

Expectancy Theory – Vroom
Persuasive Design – Fogg
Social Cognitive Theory / Self-Efficacy – Bandura
Theory of Reasoned Action / Planned Behavior – Fishbein & Ajzen
Transtheoretical Model / Stages of Change – Prochaska
Hierarchy of Needs – Maslow

Build Behavior Triggers Into Your Key Activities

Once you understand the Key Behaviors on the User’s side of your business model, it is time to define the Key Activities that are needed. Instruction on how to build these behavior triggers into your Key Activities will be covered in the modelH section on Key Activities. (NOTE: WE WILL UPDATE THIS SECTION AFTER WE COMPLETE THAT SPRINT)

Reward and Reinforce the Key Behaviors

And finally, it stands to reason that rewarding for the behavior you want just makes good sense. As we pointed out, when properly applied to a business model, the result can expedite the Key Behaviors you need from your Buyer/User so their JTBD is complete. Plus, the User realizes the fullness in your Value Proposition.

Rewarding Key Behaviors does not have to be cost prohibitive. It can be overcome by combining real/tangible financial incentives with perceived/intangible incentives to create a low or no-cost reward model. There are many reward models to choose from:

Key Partner (merchant) funded rewards as cash or coupons
Discounts on purchases
Rebates or cash back on purchases
Multi-purchase discounting such as 2 for 1 deals
Gamification principles

In Conclusion

In conclusion, the manner in which healthcare Users behave is highly complex and often counterintuitive. Humans have a bias towards short-term gain over long-term benefits. People often fool themselves into thinking they are healthier than they are, or they have more time to get healthy than they really do. As we stated above, the science of Behavioral Economics reminds us that while our Customer Segment’s choices may not be logical, their Key Behaviors are usually predictable. The science of Behavior Change can help you create business models that influence Users to take desired actions to complete their JTBD and realize your Value Proposition. And, the application of rewards and incentives to your User’s Key Behaviors can expedite their completion.

Take time to incorporate these approaches into the Key Behaviors block in your business model canvas. Regardless if your business model is aimed at Patients, Providers, Payers, and or Purveyors, defining the Key Behaviors as well as the Key Influencers required to enact them will ensure your Customer Segment can realize your Value Proposition in a timely and complete manner.

What is Next?

Next up we are going to do a doubleheader on Key Influencers (1.7) and Intermediaries (1.3).

To your health,

The Team at imagine.GO

This was cross-posted from Kevin Riley & Associates BLOG – http://bit.ly/modelH_keybehaviors

Learnings on Value Propositions for modelH

By imagine.GO kevineriley
2013-07-17
Business Model Innovation,Healthcare Innovation

Understanding the Value Proposition Building Block

Here are the questions asked on the Osterwalder model:

What value do we deliver to the customer?
Which one of our customer’s problems are we helping to solve?
What bundles of products and services are we offering to each Customer Segment?

We added these question specific to our healthcare model.

What compels a purchase decision by the Buyer?
What aspects of the User’s life do you deliver value?
Which jobs, pains, and gains need to be addressed in the Value Proposition?
How much time does it take for the Value Proposition to be delivered?
What social value(s) is met (if any) while delivering the Value Proposition?
What bundles of products and services are offered in the Value Proposition?
How can the Value Proposition be personalized based on the Customer Segments need(s)?
What Intermediaries derive value from our Value Proposition?
How does the business model gain insights from Customer Segment interactions?
What Key Behaviors are required for the Buyer & User to realize the Value Proposition?
What Experiences are required for the Buyer & User to realize the Value Proposition?
What Key Influencers are required for the Buyer & User to realize the Value Proposition?

modelH Canvas 5 Value Proposition Highlight

How to Create Healthcare Value Propositions

Creating a Value Proposition for your healthcare business model can be generally accomplished through the 3 steps addressed in Part 1. Creating a “shared valued” Value Proposition (as defined in Porter’s1 model of healthcare value) is much tougher and is addressed in Part 2. Understanding how your Value Proposition’s products and service fit into your customer’s value drivers is addressed in Part 3.

Building a General Healthcare Value Proposition

Most products and services are thought of in the terms of the “Benefits” and “Features” they possess. Good business models have to think past this inwardly facing view and instead look to the value they create. To do this, take a look at the 3 steps to develop a meaningful Value Proposition.

1st – Establish a Position of Value with Someone Specific

First, your business model must establish a position of value with a specific Customer Segment. This means reaching a point at which a clearly identified Buyer and/or End User is aware that your business is offering them something that is valuable, relevant, and complementary to their specific health JTBD (jobs-to-be-done). This position of value serves as a point of initial engagement with your Customer Segment, as well as forming the basis for all ongoing interactions. The aim of understanding your Customer Segment is to focus on what matters most to them while making a healthcare related purchase decisions. These “key matters” are called Value Drivers. Keep in mind that Value Drivers are both known and unknown to the healthcare consumer. In the simplest terms, healthcare consumers are looking for solutions that meet their JTBD based on alignment with their Value Drivers. So to build a good product or service, ensure your product’s Value Proposition meets your ideal customer’s Value Drivers.

2nd – Increase Your Understanding of that Value Position

Second, involves a commitment to “ever-increasing” your understanding of the Customer Segment(s) you engage. This understanding of both Buyer and/or User is critical to Customer Intimacy2, which is characterized by occupying no more than a few high-value customer niches and being obsessive about understanding those customers in detail. Market Leaders with this focus excel at customer attention and customer service – examples include the family doctor and the personal trainer. A business model must also create the insight needed to turn a prospect into an actual customer who is willing to share personal and health information in a two-way exchange. This exchange is vital for any healthcare business model and places the business in the position to monetization the relationship.

3rd – Develop Your Product Market Fit Iteratively

Third, based on your Customer Segment understanding, identify the Value Propositions (products and service) with the greatest potential for alignment with the JTBD of your Buyers and/or Users. This is what Marc Andreessen calls Product Market Fit3. This third step implies continually shaping your business model’s solutions to fit an increasingly refined definition of your Customer Segment. This requires marketing solutions in a manner consistent with each customer’s stated preferences and again capturing the important health and behavior data in a two-way exchange. To do this, use a Minimum Viable Product (MVP4) approach to defining your Value Proposition. It is also important to note that your Value Proposition must extend past just your Customer Segments, and be applicable to your Intermediaries and Key Partners.

Building a Universal Healthcare Value Proposition

For healthcare business models, the secret to creating the “best” Value Proposition lies in marrying the collective value derived by all stakeholders in such a way that a virtuous cycle is created. Across the value chain of healthcare, there are four key stakeholders: patients, providers, payers, and purveyors. The patient is the User of the Value Proposition, who also may or may not be the Buyer of it. Providers are those Key Partners that provision some form of care delivery to the User. The payer is the Buyer in part or total for Value Proposition to be delivered to the User (patient). And purveyors are those Key Partners that perform some vital function in the design and/or delivery of that care for the User through Key Partners (Providers and Payers).

Keep this concept in perspective – the party who consumes the product of healthcare (the “patient”) is usually not the one who pays for it, or at least not most of it. The party that pays for it (the “payer”) is best served when it is not used, and is therefore motivated to push for less of it. Furthermore, the parties that deliver it (the “provider”), and the parties that support its delivery (the “purveyor”), are not aligned to place realistic boundaries on its cost, thus forcing the system into bankruptcy. Due to this divided nature, the healthcare ecosystem is overrun with inefficiencies and creates dis-incentives between stakeholders so that each maximizes their own value, often at the expense of the others. Your business model must avoid this trap.

If the JTBD (job-to-be-done) building block defines what utility a User is looking for, a consolidated Value Proposition defines the shared value that exists between the four key stakeholders. Because of this complex interrelation, the standard pains and gains model in Osterwalder’s Value Proposition Canvas5 doesn’t really work well. Users have their own defined value based on their JTBD. So how do you define value for the patient, provider, payer, and purveyor regardless of which is your actual User or Buyer?

As it relates to the Patients, there are three key components for a Value Proposition:

Utility: Patient-Buyers, like all consumers, will justify a purchase because you solve their particular JTBD.
Influence: Patient-Buyers will also justify a purchase because they are persuaded to it through Key Influencers, such as their providers or purveyors.
Need: Patient-Buyers will also justify a purchase because a Key Partner in the process of their healthcare decision-making has required your solution as part of their own Value Proposition.

As it relates to the Providers, there are four key components for a Value Proposition:

Utility: Provider-Buyers, like all consumers, will justify a purchase because you solved their particular JTBD.
Reduce Costs: Provider-Buyers will also justify a purchase because your solution reduces their healthcare provisioning costs – either directly or from productivity increases.
Increase Revenue: Provider-Buyers will justify a purchase because your solution increases their revenues by increasing the volume of patients throughout. This allows for more higher priced services, or increased customer (patient) loyalty. Moreover, the new Accountable Care organizations can actually result in increased revenue for a Provider-Buyer as they reduce costs.
Need: Provider-Buyers will also justify a purchase because in the creation of their own Value Proposition an Externality (usually the Government in the form of CMS or state licensing agencies) requires it.

As it relates to the Payers, there are four key components for a Value Proposition:

Utility: Payer-Buyers, like all consumers and some government and business buyers, will justify a purchase because it solves their particular JTBD.
Reducing Costs: Payer-Buyers, like health insurers and employers, will justify a purchase because your solution reduces their healthcare converge costs – either directly or from productivity increases.
Increasing Revenue: Payer-Buyers, like health insurers or growing third-party partners, will justify a purchase because your solution increases their revenues through the volume of sales, a price increase, and/or increased customer loyalty.
Need: Patient-Buyers will also justify a purchase because in the creation of their own Value Proposition and an Externality (usually the Government in the form of CMS or state insurance regulators) requires it.

As it relates to the Purveyors, there are three key components for a Value Proposition:

Reducing Costs: Purveyor-Buyers, like pharmaceutical and durable medical equipment companies, will justify a purchase because your solution reduces their costs – either directly, through cheaper access to Patients, Providers, or Payers, or from productivity increases.
Increasing Revenue: Purveyor-Buyers, like pharmaceutical and diagnostic companies, will justify a purchase because your solution increases their revenues through the volume of sales, a price increase, and/or increased customer loyalty.
Need: Purveyor-Buyers will also justify a purchase because in the creation of their own Value Proposition and an Externality (usually the Government in the form of CMS or the FDA) requires it.

Understanding How Your Product Fits into Your Customer’s Value Drivers

To do this, take a look at the current set of products, services, and information that make up your Value Proposition. Do the Benefits provided by your product Features add to your Value Proposition? Do the services you provide augment your product Features? Does the information used to support usage of your products and services speak to the Value Proposition or something else? How many of your product Features and Benefits are really important to your Customer Segments? How many are inconsequential? How many are actually creating a negative impact?

The goods and services that comprise a Value Proposition can be broken down into 3 classifications: Health Direct, Health Related, and Health Relevant. Within these classifications, the goods and services will either be considered In-Context, or Opportunistic.

Health Direct

Products and services that directly affect a person’s health can be thought of as Health Direct. Some simple examples include immunizations and vaccinations. Some more complex examples are those items prescribed by a doctor to solve the JTBD of a particular health issue such as drugs, therapies, and durable medical equipment.

Health Related

Products and services that are used to maintain or improve overall health, but not necessarily address a particular medical JTBD (condition) can be thought of as Health Related. Some examples include “wellness” products like screenings, massage, personal training, and supplements.

Health Relevant

Products and services that are health and wellness related, but can be bought for usage in other areas, are considered Health Relevant. An example is a pair of running shoes bought for their aesthetic value more than their connection to personal training, but can be used for that purpose as well.

In-Context

Products and services that can be recommended as part of a specific JTBD are considered In-context of that JTBD. This is consistent with the Value Proposition generation model described above. For example, that same pair of running shoes are in-context with the JTBD of getting regular exercise as part of a Doctor-prescribed Key Behavior for a User with high cholesterol.

Opportunistic

Products and services that are not part of a specific JTBD (Health Direct, Related, or Relevant) but are still valuable to a User’s total health (as described the in the wellbeing model above) can be considered Opportunistic. For example, a User with a JTBD of financial security would be interested in the In-context product of ID Theft Protection. It would be reasonable and relevant to approach this same User with the Opportunistic product of Social Media Reputation Management though the underlying connection between financial security and personal information security.

Take the time to incorporate these approaches into the Value Proposition block in your business model canvas. Regardless if your business model is aimed at Patients, Providers, Payers, and or Purveyors, creating a Value Proposition from a shared sense of value will go a long way to ensuring your business idea has sustainability.

What is Next?

Next up we are going to look at the Key Behaviors needed from the User and Buyer to ensure the Value Proposition is effectively received.

Click here to learn more: http://bit.ly/modelH-keyresources

To your health,

The Team at imagine.GO

1 What Is Value in Health Care? Michael E. Porter, Ph.D. N Engl J Med 2010; 363:2477-2481December 23, 2010DOI: 10.1056/NEJMp1011024, available on http://www.nejm.org/doi/full/10.1056/NEJMp1011024

2 The Discipline of Market Leaders: Choose Your Customers, Narrow Your Focus, Dominate Your Market by Michael Treacy and Fred Wiersema Customer Intimacy

3 The PMARCA Guide To Startups Part 4: The only thing that matters by Marc Andreessen, originally published on his blog, blog.pmarca.com, available on http://pmarchive.com/guide_to_startups_part4.html

4 The Lean Startup Methodology by Eric Reis, available on http://theleanstartup.com/#principles

5 The Value Proposition Designer Canvas by Alex Osterwalder, available on http://businessmodelalchemist.com/business-model-alchemist/2012/08/achieve-product-market-fit-with-our-brand-new-value-proposition-designer.html

Learnings on Jobs-to-be-done (JTBD) for modelH

By imagine.GO kevineriley
2013-07-14
Business Model Innovation,Healthcare Innovation

A “job-to-be-done” is the high-level goal that a person is trying to accomplish. This is a simple idea with profound implications. Understanding a consumer’s “job-to-be-done” requires that you resist thinking in terms of your product and/or service and what you must do to sell, service, or provide it. Instead, think in terms of what the consumer is trying to accomplish.

By understanding consumers’ healthcare jobs-to-be-done (JTBD), we can create a tailored value proposition and an intentional experience for them. Think of it as a promise of value to be delivered and a belief from the consumer that it will be experienced.

Still not sure about a JTBD. Watch this video from the inventor of the concept Clayton Christensen.

We just wrapped up our fifth business building block sprint on Jobs-to-be-done (JTBD). In summary, the sprint for Project 1.4 on JTBD completed 2 objectives:

Questions to ask on the canvas for the JTBD building block
Help on how to create healthcare JTBD

Questions to Ask on the Canvas for the JTBD Block

We defined the questions that should be added to our business model canvas for helping practitioners define their Customer Segment’s healthcare JTBD?

JTBD: What is the job-to-be-done? I want to … action words + object of action + context
Current Approach: What is their current approach to solving their JTBD now?
Benchmark(s): What do they compare their current approach to – good or bad?
Performance Criteria: What criteria are used to judge the effort & experience of the current approach?
Barriers: What prevents them from trying a different approach?
Behaviors: What Key Behaviors are needed to drive completion of their JTBD?
Data: What Platform (data) is needed to drive the completion of their JTBD?
Value: What creates value in their minds in regards of their JTBD?

The Most Important Healthcare JTBD

The single most important JTBD in healthcare is “Health” itself. This, or some derivative of this, is what drives the industry. Even with this clarifying fact, and as simple as this sounds, it is not an easy task to identify the User’s health JTBD. For example, in the aspect of physical health alone, there are four sub-categories: wellness, episodic, accurate, and chronic to consider. And, health is comprised of much more than just physical health. It can be mental, spiritual, and much more.

A good basis for identifying a User’s health JTBD is the Washington State University Wellbeing Model1, which breaks health dimensions down into Financial, Emotional, Intellectual, Social, Physical, Occupational, Environmental, and Spiritual. In this model, “Health” (or as they call it Wellbeing) is the combination of the related JTBD from across these categories. In this model, any single health JTBD is actually drawing from several dimensions. This complexity is why so many healthcare business model Value Propositions fall short.

Clayton Christensen, who developed the JTBD concept, noted that users don’t want drill bits, they want holes. However, a Customer Segment defining their JTBD “wanting to drill a hole”, is misleading. The verb is a factor in the JTBD, but the final state is the truest answer being sought. That is to say that in this case the User might want the hole to make their spouse happy, or to be paid by their client, or to show off their art work, or a host of other reasons. Suffice to say, the User wants the hole and the mental value and rewards that the hole provides them. The danger in this thinking when applied to healthcare lies in the limited knowledge of the User in defining their JTBD.

In healthcare this is demonstrated as a patient stating their JTBD is “wanting to get well”. Based on the nature of their malady (episodic, acute, or chronic) the Value Proposition needed to produce this “end state” can be quite significant. For example, for a Type 2 diabetic to “get well” they need a lifelong commitment to blood sugar monitoring, healthy eating, regular exercise, and possibly, diabetes medication or insulin therapy2. Any Value Proposition short of this complete regimen would fail the patient and lead to long term issues elsewhere.

How to Build a Healthcare Job-to-be-done

It is important that in healthcare, every JTBD is actually comprised of two parts – utility and mentality. A utility JTBD is the high-level goal that a person is trying to accomplish. The mentality JTBD is the set of Key Behaviors that are needed to complete the utility JTBD

So how do you define a healthcare JTBD that can effectively serve to refine your business model’s Value Proposition?

First, start with the concept of “Treasure Mapping” the User’s JTBD through the various states of completeness. This involves identifying where a User is right now (“You are here”) in their JTBD, as well as where the User would like to be (“X marks the spot”) as part of their ultimate “end state”. An example would be a User with a JTBD of “lowering their blood pressure”. Before taking medication, this JTBD needs a Value Proposition that includes a change in diet to include less salt and more water, a regular exercise regimen, and limiting the amount of alcohol consumed3. Treasure Mapping out where the User needs to start and progress through in order to lower their blood pressure is a good way to construct their JTBD. Keep in mind that most User’s do not have a full picture of all of the points along their JTBD treasure map. You will need to account for this in how you construct your Value Proposition from their JTBD and deliver it through your Channels and Customer Relationships.

Second, identify the driver(s) behind the User’s JTBD. Most Users are dragged through the healthcare system kicking and screaming, which makes both patient and provider miserable. Understanding the User’s capacity to engage in solving their JTBD is critical to delivering your full Value Proposition. These driver(s) , or Key Behaviors, are an essential part of designing a healthcare JTBD. There are countless models to use from Maslow to Prochaska. If you can identify what mentality JTBD needs to be solved in parallel with the tangible utility JTBD, you have a much better picture of how a solution should look and how your Value Proposition should be delivered. It is important to note that this point may seem to overlap with the Customer Relationship building block, but it is actually quite independent. Customer Relationships are built on a shared purpose between the business and the Customer Segment. Key Behaviors are solely the User’s. Key Behaviors are required to make the business model work. For example, on the part of the provider the Key Behavior might be bedside manner and communication vehicle that can completely and comfortably educate the patient on condition. Another example on the part of the patient, the Key Behavior is a willingness to embrace and execute on their utility JTBD by overcoming any mentality JTBD that would prevent it.

Getting the Data Needed to Support the Healthcare JTBD

No matter what the JTBD, utility or mental, there will always be a need for the Buyer and User to enter in or allow access to certain data so the Value Proposition can be tailored to their JTBD. An increased understanding of User is critical to discovering their ongoing JTBD and building a lifelong relationship. A JTBD can be derived from your own experience and assumptions, but are best when they are supported by data that has been market validated.

To get access to this Buyer and User data, the business model must present a legitimate reason for every data element requested or accessed, and be transparent with the Buyer and User as to what data is used for and why. Within a JTBD, a small amount of information can go a long way towards tailoring a Value Proposition. It is important to the business model to determine the right and wrong amount of information needed to help the User achieve their JTBD goals. This is done through the business model’s Platform.

How your business model’s Platform obtains the data is as important to the JTBD as the Customer Relationship is to the Customer Segment. Most of your JTBD progress data should be automatically updated. However, your model should also allow the User a method of self-reporting their JTBD progress on your Platform. This gives the User a way achieve their mentality JTBD by contributing to the tailoring of their own utility JTBD.

In addition to the observed facts of the JTBD progress, another part of the necessary Platform data is to understand Buyer & User preferences. Understanding these preferences enables your business model to deliver the Value Proposition in a manner consistent with their choosing. Preferences consist of the frequency of communication, communication channels, and tone of communication. Preferences are best gained by asking about their need for deviations from recommended communication frequencies, channels, and tone.

Take the time to incorporate these approaches into the JTBD Block in your business model canvas. Regardless if your business model is aimed at Patients, Providers, Payers, and or Purveyors, the need for creating accurate JTBD greatly improves your Value Proposition and its chance of Customer Segment adoption.

What is Next?

Next up we are going to look at the Key Behaviors needed from the User and Buyer to ensure the Value Proposition is effectively received.

To your health,

The Team at imagine.GO

Learnings on Buyers and Users for modelH

By imagine.GO kevineriley
2013-06-04
Business Model Innovation,Customer Experience Innovation,Healthcare Innovation

We just wrapped up our first business building block sprint on Customer Segments. I wanted to thank the modelH Community for the fantastic participation over the last 2 weeks. In summary, the sprint for Project 1.1 on Customer Segments completed 3 main objectives:

A Revised Image for Customer Segments
Customer Segmentation Models for Healthcare
Questions to Ask on the Canvas for the Customer Segment Block

1st – A Revised Image for Customer Segments (Buyers and Users)

Through our canvas, we are asking all healthcare businesses to think downstream far enough to understand how they impact the patient and their care – or as we are calling it, participating in a sense of shared value. So even though a specific business model may have a Buyer who is not the actual healthcare end User, the business model does have an effect on one or all of the “value lenses” we have proposed:

Improved consumer experience yielding an informed decision maker aligned to their risk and reward,
Increased access to necessary care through an engaged delivery system, and
Reduced aggregate cost of care, with a market-driven, balanced incentive and reward model.

So we are modifying the canvas image itself to have 3 parts within the Customer Segment block.

a Buyer (the customer of the business),

a User (the person who will use the product or by-product of the business), and

an Intermediary (the person who filters, persuades, and affects User healthcare decisions).

When the User and Buyer are not the same, and they almost never are in healthcare, it splits elements of the business model into two (or more) paths. As an example, one User and one Buyer create two Relationships, two distribution strategies (Channels), two Value Propositions, etc.

We feel that our health model canvas in both form and function must enable practitioners to account for 1) the overall value created and 2) multiple paths to get there. So, along with the revised image, we are applying the following rules to the Customer Segment block.

Users should always be considered an individual (consumer).
Buyers can be the user, a business or a government.
Users and Buyers have different driving motivations and thus different Value Propositions.
Intermediaries act in conflict or benefit between the Value Proposition, Buyer, and the User.

2nd – Customer Segmentation Models for Healthcare

We also had some very detailed ideas submitted on segmentation models that can be used specifically for healthcare customers. I highly encourage you to read them, use it in your own work and give us feedback and case studies. In addition to the customer segmentation models put forward in the Osterwalder Model, the healthcare specific ones we came up with are listed below in alphabetical order:

Customer Segmentation by Archetype (Behaviors)

This looks at segmenting by different Archetype categories of people based on their needs, attitudes, and behaviors to healthcare decisions. Some of the defining elements are health behaviors and attitudes, the perceived control over health now and in the future, and individual preferences for seeking and receiving healthcare information. There are some excellent commercial models available.

Customer Segmentation by Life Condition (Health Status)

This looks at segmenting by the different health concerns that can affect us all as we age and seek to understand and assess our health status, and navigate a complicated and fragmented health marketplace. The “status” of health becomes more relevant to consumers once they have been diagnosed, so this model looks at both pre and post awareness of, and management of, a consumer’s health conditions. Life Conditions include segments such as high blood pressure, cholesterol, diabetes, etc.

In fact, Life Conditions are a actually better market indicator for how healthcare consumers will act rather than age. As an example, let’s compare music preferences. Seniors and 30 year olds rarely like the same music (unless it is Bruce Springsteen!) However, a 30 year old diabetic acts pretty much the same as a 65 year old diabetic. And correspondingly, a 65 year old “health nut” acts much closer to a 35 year old “health nut” than a 65 year old diabetic.

Customer Segmentation by Life Stage (Demographics)

This looks at segmenting by the major milestones each consumer reaches in life, such as birth, adolescence, young adulthood, adulthood, retirement, etc. With each of these Life Stages come significant healthcare decisions and the jobs-to-done associated within them. For example, the Life Stage for Becoming a Parent may involve the need to tackle multiple jobs-to-be-done such as getting pregnant, child birth, preparing the home environment, etc. action.

These milestones make for a natural way to define targeted value propositions. For example, seniors have very different healthcare needs than young adults who are starting a family. In fact, the three highest cost milestones in each person’s life are usually their early childhood (including birth), followed by when they have their own child, and then when they enter retirement through death.

Customer Segmentation by Life Style (Job-to-be-done – JTBD)

This approach is one that I developed nearly 4 years ago when I built a consumer health-focused ecommerce company called GuideWell. We decided to approach to a segmentation format based on Clayton Christianson’s concept of consumer jobs-to-be-done (JTBD). This is a non-traditional approach. Traditional segmentation puts a consumer into a single segment ‘bucket’. We realize that people are multi-faceted and segmenting them singularly leads to improper product market fit.

This looks at segmenting by each consumer’s JTBD at a specific place in time. For example, a physically fit individual may not want to have an extensive conversation about basic exercise principles, but may want to know a great deal (read exhaustive conversion) about better sleep. The same person has a different reaction to their different JTBD even though they are in the same Life Stage and Life Condition. Life Style segmentation is a way to look at people based on the tailored guidance they seek for the key activities they pursue. Companies that offer “Life Style” solutions seek to help consumers with their specific JTBD, such as “Look and Feel Younger,” “Get Ripped,” “Get Outside,” “Have a Better Smile,” or even “Go Green.”

The problem lies in making an educated guess on the consumer’s JTBD. This works well when your business model’s value proposition is designed to bring a tailored set of goods to the consumer from everything that is available, but narrowed down based on their specific JTBDs.

3rd – Questions to Ask on the Canvas for the Customer Segment Block

We also defined the questions that should be added to our business model canvas for helping practitioners define their customer segments.

What are the Questions that should be answered when developing Customer Segments for a healthcare business model?

In addition to the questions asked in Osterwalder’s model:

For whom are we creating value?
Who are our most important customers?
What type of market is this business model: Mass Market, Niche Market, Segmented, Diversified, Multi-sided Platform?

We added the following as well:

Is the User of our product, or its derivative, also the Buyer of the product?
What is the relationship between the Buyer and the User?
What nomenclature does the market use to define the User in this business model: Patient, Provider, Member, Insurers, Other?
How do you define a lead (for your Buyers)?
How do you define a customer (for your Buyers)?
What model will be used to distinguish between various User types (customer segments): Archetype (Behaviors), Life Condition (Health Status), Life Style (Job-to-be-done), Life Stage (Demographics)?
What is the total addressable market size (TAM), or the revenue opportunity available for the value proposition?
What is the serviceable addressable market size (SAM), or the customers that can be reached out of the total addressable market (TAM)?
What is the target market size (TM), or the size of the initial focus for your minimum viable product release of your value proposition?

What is Next?

Next up we are going to look at the Intermediaries who filter, persuade, and affect User healthcare decisions.

Interested in what we are doing? Step up to the plate an get involved.

Click here to learn more: http://bit.ly/modelH-keyresources
Click here to join: http://bit.ly/modelH_joinup
Follow us online at: https://twitter.com/ModelHForum

To your health,

The Team at imagine.GO

How to Explain Healthcare Reform to Your Customer

By imagine.GO kevineriley
2013-05-27
Customer Experience Innovation,Healthcare Innovation

This is a tale of two customer conversations about healthcare reform. The first is conducted by an insurer and the second by a large consumer financial services company. Guess which one tells a better story. Here is a hint, not the health insurer. This article is not about picking on one or the other. It is about trying to uncover why healthcare companies have such a hard time communicating about their industry in a manner that is simple, clear, and effective. I set out to make a fair and honest comparison, and was actually disappointed in how bad the insurer got it.

Why Communication is so important to Win Health Insurance Business

The battle for healthcare communication must be fought and won. As we head into the first enrollment period under the new Affordable Care Act (ACA), most small businesses do not have a clear or accurate understanding of what will be required of them to “play.”

This is a problem. I advocate that small businesses have the most change thrust upon them, and make up the market that is most competitive in the health insurance landscape.

I am not talking about the U.S. Small Business Administration’s (SBA) definition of a small business, which includes operations with up to $7 million in revenue or 500 employees. I am talking about the ACA definition of a small business – those with 50 employees and under, which includes most of the businesses in the country. To put this in perspective, according to the to the most current U.S. census data, companies with 9 employees or less make up 95% of small businesses.

Provisions in the new law present difficult new decisions regarding healthcare benefits for companies of this size. Some employers must cover insurance for their staff or face a penalty. Some employers are exempt from having to buy insurance for their employees. Some can even be subsidized. Here are some examples:

A small business with 50 full-time equivalent employees is required to provide coverage for employees who average 30+ hours a week, or a penalty will be applied.
A small business with less than 25 employees that pays average annual wages under $50,000 may qualify for a small business tax credit of up to 35% (up to 25% for non-profits) to offset the cost of insurance.
A small businesses may be eligible to use the new Small Business Health Option Program (SHOP) Exchanges to pick a plan they want their employees to enroll in. In 2014, the employer selects the plans, and employees choose from the selected options. In 2015, this changes to the employers selecting an actuarial value level and the employees selecting any plan in that range.

Source: Docstoc

So you would think Health Plans would be beating the streets to get the message out to all small employers. It stands to reason that the Health Plan that does the best job of explaining healthcare reform and its implications on small businesses (thus taking a burden of information off of the small business owner) will probably be the plan that the employer selects for his employees in 2014. Assuming the Plan does a good job in 2014, there is a strong chance that the employees will keep that same Plan Carrier in 2015 and beyond. Yet, according to the infographic above, more than half of the exempt small businesses do not understand the basics of the equation. Who will win this business? The ones that does the best job explaining it!

2013 a critical year to compete for the small business health insurance.

But, healthcare reform affects more than just small businesses. It affects many individuals who are not on employer insurance roles as well. To put this in perspective, according to the World Bank the total US workforce numbers a little more than 158 million. By 2015 there will be 70 million independent 1099 contractors. That means that almost 50% of the US workforce will be an independent worker by 2015. What are insurers plans to win this growth market?

2014 is critical year to compete for the under 65 consumer market.

What is Considered Good Communication?

H&R Block understands this cause and affect and has already started its communications to both groups. After filing my taxes this year, I was prompted to engage with the following interactive explanation of how the new healthcare reform law will affect me and my taxes. I made a quick video of what I thought were the highlights.

You can try it for yourself here: http://www.hrblock.com/healthcare/#.UWbNVSvzYm7

Now juxtapose this to a more comprehensive and confusing explanation by a major insurer. I was not prompted in the course of another action as I was with H&R Block, so I did what we all do to learn – I started with a Google search. This page is what came back, so I clicked the top result.

As I was trying to make sense of the overwhelming amount of information, unprompted CIGNA asked ME how to make THEIR website better. This survey was unbelievable to me. They actually interrupted a bad experience to make it worse.

And to boot, the dialog that I did not want and had to click to get rid of had errors on the page. Look n the upper left corner and notice the infamous “image not found” image. And to really go over the top, CIGNA gave me instructions on something I did not ask for and did not want, which put the burden on me. I was not here to help them with their website – I was hear to help myself learn about healthcare reform and somehow I am now roped into giving them my feedback. But even that was not easy. Take a look at the actual instructions they gave me – “When you click “Yes, I would”, another browser window will open for the survey. Please return to your open Cigna.com window, complete your visit, and then return to the survey window. All input you provide is strictly confidential.”

I had to go somewhere else, to do something I did not want to do, to help CIGNA, and then they had the brass to ask me to return to the page I was confused on in the first place to complete the business I was here for – absolutely unbelievable!!!

When will the insurance companies get it right? If H&R Block can do it, I expect them to be able to as well.

To your health,

The Team at imagine.GO

How to Send a Personalized Bill to Your Customer

I just received a new bill from AT&T – and get this – it was a personalized video of my charges. Yes, that is correct, a video. It was my actual bill, with my actual charges explained. And it was cool. I watched it three times and then recorded it and made a video to share. Here is the short video I made of my experience:

An Old Dog with Some Cool New Tricks

To be sure, I am not a raving fan of AT&T but I respect their product offering, and they seem to be getting much better at customer service. In truth, their coverage where I live at the beach in Florida is terrible. But, for the most part, they are pretty spectacular anywhere else I travel for work. I pay around $130 to $150 every month for their services. I know and trust and rely on their product. But, historically speaking I have had two issues with their product – at least from the arena of understanding my bill charges and getting someone one the phone to help me get answers. I can sympathize as they have a lot of customers to deal with daily. However, I am still the customer, and I pay them close to $1500 per year. I have the right to expect better. Such is life.

I have upgraded my phone and service several times in the life of my relationship with AT&T. Invariably, I am always confused at the one-off charges I see on the bill and in many cases, I have had the need to call and clarify what they were. I dread this scenario because I know it will be several trips through their telephone prompt system, then saying the same thing to at least three reps that have a somewhat less than mastery of English. One month ago, I upgraded my iPhone to the new 5 (my relationship with Apple is a story in itself, and someday I may let you know about it).

So imagine my surprise when I received an email from AT&T with a link asking me to watch a video about my new bill. The call to action was clear and the broadcast email was well done, so I obliged. It took me to a page at the AT&T site where I saw a video that explained my most recent bill, in clear detail – even the one off charge. It was very well done, and it was tailored just for me. I can still get access to the regular online or printed bill as well – but I feel no need to now.

How did they do it? I am not so naïve to think AT&T chose to invest resources in the AV department to create a video just for me – so I have to assume this was done by some smart new vendor that can tie into their systems and use list data to create custom videos. Whatever the reason, the result was that I understood the bill, and I did not feel a need to call AT&T – this saving them the transaction cost. I have to assume the economics are for the mass/custom video versus the support line. Furthermore, they saved me aggravation and got me talking in a positive light about AT&T. Nice work.

One other thing, because this is new technology and a new experience (I am sure they tested it quite a bit), AT&T was smart enough to ask me some survey questions at the end to see what I thought about it. Thus, validating their efforts. Again, nice work.

If My Phone Provider Can Do It, Why Can’t My Healthcare?

As I said, I spend approximately $130 with my phone provider each month. By contrast, I spend $400 with my health insurance provider. As bad as my old phone bill was, by contrast, it is like a new Harry Potter novel (FYI I love Harry Potter books) compared to the bill I get from my insurance company. Or should I say, the “THIS IS NOT A BILL” I get from my health plan. Take a look at a sample Explanation of Benefits (EOB) below.

Firstly, I find it somewhat ironic that it is called an Explanation of Benefits – as it is neither a benefit nor a good explanation of what I owe. I am not picking on any one plan – I just happened to be able to find a sample EOB for them online. And not wanting to post my own, I had to have something to speak to, so they are the lucky winners. In truth, from what I know and what I have heard, all if not almost all insurance companies are this bad.

Here is what drives me crazy about this document. It gives me more than I need in a poorly laid out manner, so it guarantees my confusion. Thus, resulting in my need to call them. Thus, having to deal with the call center for the insurance company. Thus, ensuring I add anger to my confusion. This repeat cycle is a never-ending loop for million of customers across the country.

When will the health insurance companies get it right? If AT&T can do it, I now expect them can as well.

To your health,

The Team at imagine.GO

modelH – Health Model Co-Creation Forum (part 4)

By imagine.GO kevineriley
2013-04-26
Business Model Innovation,Business Process Innovation,Healthcare Innovation,Leadership Innovation

After reading my 3 earlier posts, I hope we have you convinced that this is a worthwhile effort and that you should join us. By joining the forum – you join the movement to create a better healthcare system.

The solutions for transforming healthcare will come from harnessing diverse ideas from across the ecosystem of healthcare stakeholders. We are inviting individuals inside and outside of the healthcare industry to join us on one platform to ignite conversations and build solutions for new business models within US healthcare.

That means you – yes, you are invited!

When you sign up, you will join other passionate healthcare and innovation professionals to create meaningful change in the US healthcare industry. You will also cultivate new professional relationships, elevate your personal brands and identities, and receive direct attribution in my forthcoming book as permanent proof of the important co-creative role you played.

Please know this is not a marketing scam – we are sincere in our work and care deeply about our goals. Our end result will be a book published in 2014 that you will get to share in the credits for creating.

How to Participate in modelH

Well, first you have to register on the modelH site. We suggest you read up on the whole project here first – http://bit.ly/modelHForum.

After that, there will be three Phases to the modelH project, which will last through at least March of 2014.

The three Phases are:

1. CoCreate a healthcare business model generator, called modelH. We will draw from the work of Alexander Osterwalder and Yves Pigneur in their book, “Business Model Generation: A Handbook For Visionaries, Game Changers, and Challengers” to create a new framework for developing health model innovation throughout the remainder of the project. Building the modelH engine is the most critical part of the project, and we’ll be devoting most of our time – 4-5 months – on this module.
2. Generate and evaluate ideas through the modelH engine. Next, we’ll gather your inspiration, insights, and research to develop ideas that can be tested in the modelH engine. These ideas will address our three main areas of concern for healthcare: creating positive consumption experiences, improving the care delivery mechanism, and aligning payments and incentives. If we’ve built modelH correctly, we will be able to produce innovative business models that reflect a new direction for US healthcare. We expect to spend 2-3 months on this module of the project.
3. Validate the health model innovation solutions. The final step is to review our modelH solutions to ensure they are fair, reasonable, and feasible. Once validated, Kevin Riley will be compiling the work into a visual playbook to be published later in 2014. We expect to spend 1-2 months on this module.

This project is a labor of love for all of us and the modelH team is fronting the cost to put all of this together. Our reward is the same as your reward: pride in creating a new path forward for US healthcare. It’s an opportunity to do something meaningful that has the potential to effect change on a system that is in dire need of change and to positively impact the lives of millions of Americans. We’ll also provide attribution to all contributors in the book as proof of the important role you play.

Keep in mind that this is an experimental project, and we expect some bumps along the way. If you encounter troubles, inconsistencies, or simply need clarity on how it all works, kindly let us know so we can improve the process. Also, we will have a firm “no jerks” policy in place within the modelH forum. We want disruptive thinkers, not disruptive individuals. If you are serious about making something that will help all of us create the healthcare system we so desperately need, please join in with a heart and mind for that task. If not, please sit this one out.

So, step up to the plate and get involved.

Click here to join (the big red button on the side!): http://bit.ly/modelHForum
Follow us online at: https://twitter.com/ModelHForum
And you can read more about this project in my linked posts: modelH (part 1) | modelH (part 2) | modelH (part 3)

To your health,

The Team at imagine.GO

Blog :

1st – Questions to Ask on the Canvas for the Key Influencers Block

2nd – How to Identify and Activate Healthcare Key Influencers

How do you identify your Key Influencers?

How do you activate your Key Influencers

Using Technology with Key Influencers

In Conclusion

What is Next?

1st – Questions to Ask on the Canvas for the Intermediaries Block

2nd – How to Identify and Use Healthcare Intermediaries

In Conclusion

What is Next?

Week 01: Customer Discovery

Week 02: Big Markets, Big Ideas

Week 03: Fundability

Week 04: Pitching Your Idea

Week 05: Go to Market

Questions to Ask on the Canvas for the Key Behaviors Block

How to Define Healthcare Key Behaviors

Enumerate the Key Behaviors

Apply a Behavior Change Model

Build Behavior Triggers Into Your Key Activities

Reward and Reinforce the Key Behaviors

In Conclusion

What is Next?

Understanding the Value Proposition Building Block

How to Create Healthcare Value Propositions

Building a General Healthcare Value Proposition

1st – Establish a Position of Value with Someone Specific

2nd – Increase Your Understanding of that Value Position

3rd – Develop Your Product Market Fit Iteratively

Building a Universal Healthcare Value Proposition

Understanding How Your Product Fits into Your Customer’s Value Drivers

Health Direct

Health Related

Health Relevant

In-Context

Opportunistic

What is Next?

Questions to Ask on the Canvas for the JTBD Block

The Most Important Healthcare JTBD

How to Build a Healthcare Job-to-be-done

Getting the Data Needed to Support the Healthcare JTBD

What is Next?

1st – A Revised Image for Customer Segments (Buyers and Users)

2nd – Customer Segmentation Models for Healthcare

Customer Segmentation by Archetype (Behaviors)

Customer Segmentation by Life Condition (Health Status)

Customer Segmentation by Life Stage (Demographics)

Customer Segmentation by Life Style (Job-to-be-done – JTBD)

3rd – Questions to Ask on the Canvas for the Customer Segment Block

What is Next?

Why Communication is so important to Win Health Insurance Business

2013 a critical year to compete for the small business health insurance.

2014 is critical year to compete for the under 65 consumer market.

What is Considered Good Communication?

An Old Dog with Some Cool New Tricks

If My Phone Provider Can Do It, Why Can’t My Healthcare?

How to Participate in modelH

1^st – Questions to Ask on the Canvas for the Key Influencers Block

2^nd – How to Identify and Activate Healthcare Key Influencers

1^st – Questions to Ask on the Canvas for the Intermediaries Block

2^nd – How to Identify and Use Healthcare Intermediaries