Blog : Customer Experience Innovation

How to Get Started with CX at Your Healthcare Company
imagine.GO

How to Get Started with CX at Your Healthcare Company

CX is all the rage these days. It seems that most of it is couched in theoretical theory and “potential” value creation. To be clear, we think it definitely has its purpose. In fact, it is core to our modelH approach. But, we are weary of anything that cannot be implemented in an Agile fashion.

In a McKinsey survey of senior executives, 90% said customer experience (CX) is one of the CEO’s top 3 priorities. This fact is due to increasing customer expectations in an evolving digital marketplace. Customers expect more, better and faster – and they expect you to know and fix your process problems. McKinsey research indicates that for every 10-point up in customer satisfaction, companies increase their revenues by 2 to 3%. Gains come from increasing wallet share (more product purchases) and lower churn rates (fewer customers leave). Satisfaction is correlated to operational or infrastructure-related factors. These include price, transparency, cycle times, product features, and use of digital channels.

distorted-office-hall

We take for granted that the result of a great CX discipline produces customer action (behavior change), satisfaction (customer happiness), and attraction (brand loyalty).  As a result, your employees will be able to understand how their work impacts the member’s experience – and establish a baseline for all future CX endeavors.

Though this seems straightforward, implementing a customer experience discipline within a company is difficult. So how do you begin?

Well, even the longest journey begins with a single first step. Experience is something that can be designed, implemented and measured. In healthcare, favorable experiences can make a difference between healthy/profitable customers and unhealthy/expensive ones. A better experience comes from orchestrating a customer’s journey across channels. Experiential design starts with recognizing and prioritizing your (i.e. your customer’s) most important “touches” so you can optimize the operational factors that drive them. For health plans, the inventory of touches includes your member as well as your providers.

We recommend you start with defining (in a minimally viable way) how the discipline of Customer Experience (CX) will work at your company. Although CX eventually encompasses all of your company’s touchpoints and communications, synchronized across channels to achieve maximum customer activation and brand awareness – we are asking you to just spend a day outlining the basics and assigning responsibility for them. Just do enough to define your most important first CX project(s) and get someone assigned to the task. Then see where it goes from there – and keep it Agile.

As first projects go, we recommend you start with a journey map. A Customer Journey Map is a graphic representation of the journey your prospect/customer takes in relationship to your organization over time and across all touch points.  This tool emphasizes the intersections between your processes, your customer’s jobs-to-be-done, your measures, and your customer’s expectations. If you cannot define the touches, how can you truly prioritize which need fixing first? We recommend you first focus on the “experiences” that move the needle for customers and impact your cost/profit outlook. A few things stand out for prioritization. Digital journeys should be prioritized over manual ones as it easier to “fix” digital than physical. And, McKinsey research shows digital-first journeys produce higher customer-satisfaction scores than traditional journeys. Reducing journey time (the time it takes to complete an individual journey) should be prioritized over adding new features. Customer satisfaction has a higher correlation to “ease-of-use” than “feature rich”. However, keep in mind that there are diminishing payoffs for reducing journey time, so only take it as far as it produces returns.

modelh-consumer-behavior-when-purchasing

imagine.GO specializes in helping companies thrive where consumerism and health care converge. We have helped organizations ranging from fortune-100 companies to startups, quickly define better business models and communicate them to stakeholders. We have implemented our “100 Days to Customer Experience” model for several large health insurance plans and other retail-focused healthcare companies.

Here is the link to the McKinsey article we are referencing (The four pillars of distinctive customer journeys).

To your health,

The Team at imagine.GO

Webinar: Finding and Closing Healthcare Customers through Digital Channels
imagine.GO

Webinar: Finding and Closing Healthcare Customers through Digital Channels

Health care reform has created millions of new health care shoppers. Many of whom will be visiting your website for the first time. You’ve done the work to support the new health care consumer on your site, but are you converting visitors into shoppers, and shoppers into repeated customers? This webinar will focus on Conversion Optimization (CO) and Search Engine Optimization (SEO) to help you maximize traffic to your website and increase your conversion rate (CVR).

September 17, 2014
3:00 pm – 4:30 pm EST
Online

*This webinar is part of the Consumer Experience Webinar Series.
Webinars will be held September 17, October 22, October 29 and December 10, all at 3:00 pm ET.

Learning Objectives:

Discover how to implement a smart and consistent SEO strategy to ensure your company shows up where it matters.
Explore how you can launch and test ‘Calls to Action’ during key points in a person’s visit to your website so that you increase the rates at which visitors start the shopping process.
Examine how you can increase the rates at which shoppers complete the process to become customers.

Speakers:

Moderator: Kevin Riley, President, Kevin Riley & Associates

  • Andrew Bennett, Senior Director of Digital Marketing, Smartsheet
  • David Chase, Director of Digital Marketing, GuideWell
  • Bill Lan, Head of Industry, Insurance & Services, Google

 

 

To your health,

The Team at imagine.GO

 

Learnings on Key Activities for modelH
imagine.GO

Learnings on Key Activities for modelH

We just wrapped up our 11th business building block sprint on Key Activities. In summary, the sprint for Project 1.11 on Key Activities completed 2 objectives:

  • Questions to ask on the canvas for the Key Activities
  • Explanation regarding how to define and stick to only the necessary Key Activities

modelH Key Activities

1. Questions to Ask on the Canvas for the Key Activities Block

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

  1. What Key Activities do our Value Propositions require?
  2. What Key Activities do our Channels require?
  3. What Key Activities do our Customer Relationships require?
  4. What Key Activities do our Revenue streams require?

modelH Canvas 11 Key Activities Highlight

2. Do Only the Right Key Activities

The first part of this sprint is about defining the work tasks you need to do to deliver your Value Proposition. However, there are a lot of ways you can waste time doing the wrong things as your work scope begins to creep. So how do you go about keeping to only the right actions that you defined in the Key Activities block? I advocate that you apply the rigors and methods of the Lean Startup to your healthcare business model – including all technology, process, and business functions.

By definition, Minimum Viable Product (MVP) is the version of a product that is made through one cycle of a ‘build-measure-learn’ loop, done as quickly as possible. Accordingly, the work tasks (Key Activities) that are required for a build must include only those that meet the minimum viable product. Although this methodology was first applied to the world of software engineering, I recommend using it across the board for all work tasks.

The term Minimum Viable Product gives some people pause. Many default to the adage that to deliver value, we must give our customers the maximum product, not the minimum. Sometimes our attempt to provide maximum value results in bloated or inconvenient products loaded with useless features that diminish, rather than enhance, the value of the product. Think of a product in its two basic value points: form and function. Stylistically speaking, function is what a product does and form is how it does it. We discussed the need to build an “expected” form, or what we call Experience, in our building block on Experience. This expected form also implies Key Activities on your part. Be prepared to collect necessary information and build it into the Key Activities in your business model.

But at the same time, when it comes to function we advocate that you only need to do the work to build the minimum viable version. This reasoning examines your Customer Relationship, built on the premise that you have a Value Proposition that will solve your customers’ Job-to-be-done (JTBD). Your Value Proposition should do that and no more than that, otherwise you are throwing energy and resources after an unknown. If you agree with this logic, then you must apply this rigor to what work tasks, or Key Activities, you set out to do as part of the functional delivery of this Value Proposition. Focus on function rather than form. The basis of your trust relationship with the customer is a two-way exchange of value. If your product is all style and no substance, then you will lose your customers. If your substance far exceeds your customers’ needs, then you are similarly doing more harm than good, as the extra value is unrealized.  An even worse case is that customers end up confused drop it altogether.  Ultimately, only do what is necessary to build your MVP.

modelH - Consumer Behavior when Purchasing

Do not forget that you are running a business and that there are laws around compliance, fillings, and finance that you must follow. These are part of your Key Activities. If you do not list the work on these core operational fronts, you have an incomplete picture of the workload and resources required, which will inhibit you from determining the Key Resources and Key Partners you will need for a concise delivery. Therefore, as is often the case, you will find out too late, and it will either shut your business down or cost you an exponential amount to resolve.

In Summary

In conclusion, we advocate that you identify your Key Activities by identifying your MVP, and adding in the other required business tasks you needs to remain compliant with laws and financial transactions. By only building what is deemed most valuable to the customer, and progressing through iterative builds, you ensure speed to market and successful releases. When you are wrong, you fail fast (and cheap). MVP assumes that you iterate until you find the ideal solution. Start small and gradually add on, based on your customers’ needs.

Take time to incorporate these approaches into the Key Activities block in your business model canvas. Regardless if your business model aims at Patients, Providers, Payers, and or Purveyors, defining the Key Activities will keep you focused on doing what is relevant to your Customer Segment’s Jobs-to-be-done and your Value Proposition. Anything else is a distraction and will lead to straying from your business model.

What is Next?

I will be publishing the findings from 1.12 Key Resources and 1.13 Key Partners over the next few weeks. Next up on the modelH Co-Creation Forum, we are going to do a short two-week sprint on Costs and Revenue.

Interested in what we are doing?

Step up to the plate and become involved. We have just a few key modules left to discuss in the proposed modelH canvas. Please join us, make your contribution, and be recognized for helping to develop a sustainable future for the US healthcare system.

To your health,

The Team at imagine.GO

 

Learnings on Experience for modelH
imagine.GO

Learnings on Experience for modelH

We just wrapped up our 10th business building block sprint on Experience. In summary, the sprint for Project 1.10 completed 3 objectives:

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

  • What is the lowest common denominator Experience your Customer Segment is looking for?
  • Where does your Experience exceed these minimum expectations?
  • Where does your Experience miss these minimum expectations?
  • Which of your Key Activities drive your Experience?
  • Which part(s) of your business model creates “hassles” for your Customer Segments?
  • What makes it hard for your Customer Segments to find you?
  • How do your Customer Segments feel about you?
  • How easy is it for your Customer Segments to work with you?
  • What keeps your Customer Segments from recommending your Value Proposition?
  • What keeps your Buyers from shifting some or all of their business to another?
  • How likely are the Buyers to consider purchasing more from you in the future
  • Where are there hassles that keep Buyers from buying your Value Proposition?
  • Where are there hassles that keep Users from using your Value Proposition?
  • Where does your Value Proposition waste your Customer Segment’s time?
  • Where does your Value Proposition require extra or unnecessary steps?
  • Where does your Value Proposition waste your Customer Segment’s money?
  • Where does your business model create confusion for your Customer Segments?
  • Where does your business model generate avoidable risks?

modelH Canvas 10 Experience Highlight

How Do You Build Your Customer Experience?

Customer Experience is how you create great engagements for consumers as they buy/use or even consider using your products and/or services. Great healthcare companies of the future must quickly become great customer experience companies today, and for the foreseeable future. This requires a comprehensive Experience building block in your business model that:

1)     Identifies the areas for change within the current business model,

2)     Defines the change(s) that must happen, and

3)     Helps the business block owners implement changes across the organization.

Even if your business is just a cog in a value chain, and/or you have no direct access to healthcare consumers – you must remember Porter’s sense of shared value. In the healthcare ecosystem, all business models have an impact on the User – good or bad.  You should know how your Value Proposition plays out in this larger picture, and help to build your own Experience building block to ensure it is a good one. Fred Weirsema in his book How to Design a Great Experience highlights questions (listed below) for determining whether your business model (and the way you approach the market) is “in tune” with the customers you are trying to touch or impact (what Weirsema calls a Design Rule – the things a company must do to ensure it is attuned with its customers). Can my customer find me?

  • What is the top-level decision frame?
  • Does my company come up at the top of that list?
  • How does my company make sure our name appears at the top of the list?
  • Can they find my company through the channel they prefer?
  • Can they discover my company thru several channels?
  • Are SEO and SEM efforts effectively managed – to match keywords?
  • What is the bounce or abandonment rate?

2. When they find my company – is it unique? Is the impression memorable?

  • How do they find their JTBD?
  • Does that tie into my company’s uniqueness?
  • Does my company build with eye to new customer and what barriers they perceive?
  • Is the customer’s instant judgment positive about my company’s products and services?
  • Is my company’s website clear, reassuring and confident?
  • Does the website remove barriers?

3. Do your company’s processes get in the way of a purchase?

  • What is the abandonment rate online?
  • Does your company make it hard to buy or do you bait and switch?
  • Has your company gone through a buy process step by step (exactly as the customer would) – and is it smooth and predictable or is it jolting?

4. Does your company send unintended messages?

  • Is the boilerplate type of message giving off a legalese gotcha moment?
  • Has your company considered how its actions will be perceived?

5. Are your company’s products and services intuitive?

  • Do customers need an instruction manual to navigate your company’s processes?
  • Does your company build on the Minimal Viable Product (MVP)?
  • Do your company’s processes, products and services keep with what is expected?
  • Have you avoided unwanted advanced, or too many, options?

6. Does your company’s approach to the market have threaded channels?

  • Is “same customer – same data” readily and consistently available?
  • Are your company’s messages and behaviors synchronized?
  • Does your company’s treatment and approach stem from your unique brand promise?

How Do You Measure Customer Experience?

It seems plausible that you should identify and know your Customer Segments before you create products and services for them. Likewise, once you have products and services tailored especially for them – you create winning Experiences for them through the various Channels and Customer Relationships. The flow can be seen visually here.

modelH - Consumer Measurement

  1. Customer Segment Development – know your customers, (who they are, and what they want) and most importantly learn their values.
  2. Value Proposition Management – create value that your customers perceive because it effectively solves their jobs-to-be-done.
  3. Customer Behavior Management – understand your customers health needs and comprehension so you can directly and indirectly mange them.
  4. Customer Experience Management – know how your customers want to experience your products and services and create favorable engagements for them as they discover, consider, buy and use them.

This section is about measuring Experience as a business function. In as much, we should not just rely on the standard Net Promoter Score or Customer Satisfaction Score and call it a day. We must add revenue and cost elements into Experience measures because it is 1) a prudent thing to do for all business functions, and 2) critical for identifying how components of Experience drives overall revenue and impacts overall costs. When Experience is implemented properly across a business model, it will produce:

  1. An agreement and a common understanding regarding the importance and impact of Consumer Experience across all business efforts and business outcomes. (Strategy)
  2. A clear mapping and organizational (entire workforce) understanding of the Consumer Experience Journey across all touch points. (Culture)
  3. A set of Consumer Experience guides incorporated into all products, channels and messages. (Brand)
  4. A defined Consumer Experience Team organized around successful and consistent strategy execution. (People)
  5. A common model and process for using and ensuring Consumer Experience principles across the organization. (Process)
  6. An established set of Consumer Experience metrics that include revenue generation and cost consideration/understanding/containment. (Financial)
  7. A set of Consumer Experience metrics focused specifically on experience accountability across the organization. (Customer)

Consumer Experience Success Indicators

The following measures are across the key dimensions of a company and its business model.

Strategy

A measure indicating how well Consumer Experience is embedded into the corporate strategy.

  • A clearly defined, agreed to, and commonly understood Consumer Experience strategy
  • A clearly defined Consumer Experience plan of implementation (change agenda)
  • A defined maturity curve (that defines current customer experience) for how Consumer Experience will create value for the company
Culture

A measure indicating how much Consumer Experience is emphasized as a critical area by all employees/internal stakeholders.

  • A measure of overall organizational effectiveness related to Consumer Experience (e.g. Number of employees who have consumer experience as a key area of focus in their individual performance plans)
  • A shared executive measure for collaborating on Consumer Experience initiatives
    • Shared measure (connection) with Customer Development/Sales group
    • Shared measure (connection) with Channel Owners
    • A single Consumer Experience measure in the annual company performance scorecard (KPI – key performance indicator)
    • A Consumer Experience dashboard with agreed upon metrics that is widely communicated to internal stakeholders and actively managed by the senior team
Brand

A measure indicating the alignment of Consumer Experience with your company’s brand promise.

  • A measure for Customer Brand Loyalty
  • A measure for Brand Experience
  • A measure for “likelihood to recommend”
People

A measure indicating the development of the roles that lead and drive continuous improvement for the Consumer Experience function.

  • Hiring the VP of Consumer/Customer Experience who has the ability to impact organizational strategy and operational processes
  • Designing, developing the Consumer Experience roles and responsibilities
  • Hiring the Consumer Experience Team
Process

A measure indicating the clarity and utilization of the Customer Experience process.

  • Publication (communication) of a documented Consumer Experience Process
  • A documented Consumer Experience Standards Guide that is referenced throughout organizational processes and policies
  • A Customer/Member Journey Map that outlines how organizational roles and responsibilities impact each point on the journey map
  • Completion of regular Experience Audits for all channels, touchpoints, and communications
  • Implemented Experience Improvement Plans for top prioritized channels
  • Evidence of ongoing measurement of, and reduction in, cycle-time for Consumer Experience Projects
Financial

A measure indicating the effect that Customer Experience has on corporate financial performance. Revenue (attributable to Consumer Experience)

  • Wallet Share
  • Customer Profitability
  • Customer Lifetime Value
  • Market Share
  • Average Revenue per Customer
  • Number of New Customers acquired each period
  • Value of New Customers
  • New Sales Driven by Word of Mouth

Costs (attributable to Consumer Experience)

  • Customer Retention Rate
  • Customer Churn Rate/Number of Lost Customers
  • Value of Lost Customers
  • Cost to Serve Customers (total service and support costs)
  • Cost to provide differentiating value (perceived as what competitors do not offer)
  • Cost to Satisfy Customers by channel (email, chat, online, telephone, in person)
  • Ratio of Cost to Serve / Total Revenue

 

Customer

A measure indicating the Customer Experience and its affect across the customer lifecycle. Single Measures

  • Customer Effort Score CES score
  • Customer Experience Index (CXi) score
  • Customer Value Management (CVM) score
  • Customer Loyalty Score
  • Likelihood to recommend score

How easy is it for customers to find you?

  • New/Existing customers by channel  (examples below)
    • phone calls can be tracked using Google provided phone number
    • digital click thru on SEO versus SEM
    • bounce rates on keywords
    • retail visits and revisits
    • Multi-channel decision making by segment and number of touchpoints used
    • Time thru touchpoints used (channel completion rate and average time in channels)
    • Random survey reports from customers

How easy is it for customers to stay with you?

  • Reluctance to Switch score
  • Win-back After Loss (number/percentage)
  • Random survey reports from customers

How do customers feel about you?

  • Brand Trust Indicator
  • Emotional response survey
  • Random survey reports from customers
  • Perception of your company/organization by competitors

How well do customers listen to you?

  • Call center data (if applicable/available)
  • Customer compliance indicators
  • Customer understanding of your communications

How easy is it for customers to work with you?

  • Speed of application/entry process
  • Speed of issue resolution process
  • Number of customer complaints
  • Number of customer kudos
  • Customer satisfaction with specific touch points

Next up, we are going to look at Project 1.11, 12, and 13 – Key Activities, Resources, and Partners. Interested in what we are doing? Step up to the plate an get involved.

To your health,

The Team at imagine.GO

Learnings on Customer Relationships on modelH
imagine.GO

Learnings on Customer Relationships on modelH

We just wrapped up our 9th business building block sprint on Customer Relationships. In summary, the sprint for Project 1.9 completed 3 objectives:

  • What questions to ask about Customer Relationships on the modelH canvas
  • Defining how to build Customer Relationships for healthcare companies
  • A look at how to measure Customer Relationships for healthcare companies

Customer Relationship

1st – Questions to Ask on the Canvas for the Customer Relationships Block

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

  1. Which Healthcare Customer Relationship Dimensions do you use in your business model?
  2. What type of Customer Relationships do your customers expect you to maintain with them?
  3. How costly are your various Customer Relationships models to maintain?
  4. What is your plan to market your Value Proposition to consumers?
  5. When a consumer uses your Value Proposition and has a positive Experience, how do you imagine them sharing this experience with their friends/colleagues?
  6. How will you receive consumer feedback and what is your plan to act on it?
  7. Who is the greatest Key Influencer for your Customer Segments and how will you use them?
  8. How will you get, keep and grow customers?

modelH Canvas 9 Customer-Relationship Highlight

2nd – How to Define Healthcare Customer Relationships

We also built a model for helping practitioners define and build their healthcare Customer Relationships. We reviewed seven different dimensions of healthcare customer relationships.  We added seven Dimensions of Healthcare Customer Relationships to the standard BMC: Information, Navigation, Coordination, Connection, Transition, Motivation, and Monetization.

If my tax adviser can explain healthcare reform to me in simple terms, how come my health insurance company cannot?  Worse yet, when they try, they just make me more confused and mad!

If my phone company can send me a personalized video bill, how come my doctor and insurer are still sending me those unreadable explanations of benefits?

These are simple questions to ask, with a profound underlying sentiment. With each touch, business models can improve, maintain, or deter a customer relationship. WIKI says that customer relationship management (CRM) is a model for managing a company’s interactions with current and future customers. In healthcare, the customer relationship must be around more than just your Value Proposition. Good business models must take into account both the Buyer and User in regards to their presence, trajectory, and destination within the healthcare ecosystem.  modelH advocates there are 7 fundamental dimensions of healthcare Customer Relationships that exists in healthcare.  They can be employed in various degrees and in various combinations to yield the best outcome for a particular Customer Segment.
Customer Relationships Dimensions of Healthcare Customer Relationships

In each of these dimensions, customers have preferences for both channel and message.  It usually requires some form of both emotional support and physical comfort that can also be tracked and measured for progress and completeness.

Dimension

Definition

Information

 Provides value to the customer often in the form of news, articles, Q and A, keyword search entries, videos, and/or pictures and assists in both help solve their job-to-be-done and in manifesting your value proposition to your customers.

Navigation

 Moves people in a new and positive directions and helps customers ultimately solve their jobs-to-be-done.  Navigational guides can help  shape and influence new choices and behaviors for people. Other examples of navigational guides could include providing customers with personalized action plans with expert suggestions (products, services or other activities) regarding their Jobs-to-be-done (JTBD).

Coordination

 Simplifies the logistics associated with your customers’ jobs-to-be-done.  Effective coordination should enhance your value proposition.  Examples of coordination could include helping people with their health To/Do’s, scheduling appointments, health records management (PHR), monitoring & alerting on key health notifications, and streamlining support to service providers.

Connection

 Interpersonal relationships with others, which positively benefit relationships with your customers and further enhances your value proposition. Do the channels through which you interact with your customers also seek to connect your customers to other individuals or other complementary solutions?

Transition

 Over time – meeting your customers jobs-to-be-done will require maintaining relationships with them across multiple channels and potentially multiple key partners and key suppliers.  What principles of effective transitioning have you considered in continuously strengthening relationships with your customers?

Motivation

 Critical for creating change and sustaining new behaviors. What role do principles of motivation play in building relationships with your customers? Depending on your value proposition – one example of motivation in regards to strengthening customer relationships may be providing customers/users the ability to earn points when they accomplish an incentivized goal or task. Incentive providers such as employers, plan, and family can contribute to encouraging change for a customer/user. Points earned by a customer/user can be converted into buying power that can be spent on products in the marketplace. Points can also be donated to charities tapping into a person’s motivation for promoting goodwill.  You can even reward your most passionate consumers for becoming evangelists.

Monetization

 Knowing what customers value, what customers experience are both critical to any successful business. Knowing how to monetize both your Value Proposition and your Customer Relationships is foundational to sustaining any business model.

 

3rd – How to Measure Healthcare Customer Relationships

We also built a model for helping practitioners measure their healthcare Customer Relationships by outlining various options for metrics in the strategy, process, people, brand, financial, customer and culture domains.

It seems plausible that you should identify and know your Customer Segments before you create products for them.  Once you have products selected specifically for them, you then create winning Experiences through various Channels and Customer Relationships. The flow can be seen visually here.

modelH - Consumer Measurement

  • Customer Segment Development – know your customers, who they are, and what they want, and (most importantly) what they value.
  • Value Proposition Management – create value that your customers can perceive because it effectively solves their jobs-to-be-done.
  • Customer Behavior Management – understand your customers health needs and comprehension so you can directly and indirectly mange them.
  • Customer Experience Management – know how your customers want to experience your products and services and create great engagements for them as they discover, consider, buy and use them.

This section is about measuring Customer Relationship as a business function. In as much, it should be well past the standard call volumes and issue resolutions, and look to something deeper. We must add revenue and cost element into Customer Relationship measures because it is 1) prudent to do for all business functions, and 2) feasible to identify how Customer Relationship both drives revenue and lowers costs.

When Customer Relationships are designed into a business model, they produce these results:

  • A clear alignment of Customer Relationship to the business model and its implementation.
  • A set of Customer Relationships standards incorporated into all Value Propositions and Channels.
  • A defined set of Key Resources organized for consistent execution of the Customer Relationship.
  • A Platform that organizes, automates, and synchronizes Customer Relationships across the model.
  • A set of metrics to measure Revenue generation and Cost containment, as well as health outcomes.

 Customer Relationship Success Indicators

The following measures are across the key dimensions of a company and its business model.

Strategy

A measure indicating how well Customer Relationships are embedded into the corporate strategy.

  • A clearly defined Customer Relationship Management strategy
  • A clearly defined Customer Relationship plan of implementation (change agenda)
  • A defined maturity curve for how Customer Relationship will create value for the company and for the customer
Culture

A measure indicating how much Customer Relationships are emphasized as a critical area of focus by all employees/internal stakeholders.

  • A measure for the organizational effectiveness of Customer Relationship focus
  • A shared executive measure for collaboration on Customer Relationship initiatives
    • Shared measure (connection) with Consumer Experience group
    • Shared measure (connection) with Customer Development/Sales group
    • Shared measure (connection) with Channel Owners
    • A single corporate-wide Customer Relationship measure in the annual company performance group of measures
    • A Customer Relationship dashboard with agreed upon metrics by the senior team and understood by internal stakeholders
Brand

A measure indicating the alignment of Customer Relationships with your company’s brand promise.

  • This needs to be developed after conversation with leadership
People

A measure indicating the development of the roles that lead and drive continuous improvement for the Customer Relationships function.

  • This needs to be developed after conversation with leadership
Process

A measure indicating how clearly understood and utilized the Customer Relationship process is.

  • Feedback loops from providers in place
  • Feedback loops from customers in place
  • This needs to be further developed after conversation with leadership
Financial

A measure indicating the effect that Customer Relationship has on corporate financial performance.
Revenue (attributable to Customer Relationship)

  • This needs to be developed after conversation with leadership

Costs (attributable to Customer Relationship)

  • Cost to Serve Customers (total service and support costs) to meet their job-to-be-done
  • Cost to Satisfy Customers by channel (email, chat, online, telephone, in person)
  • Ratio of Cost to Serve / Total Revenue
Customer

A measure indicating the Customer Relationship and its affect across the customer lifecycle.

Single Measures

  • Customer Satisfaction score (CSAT) score
  • Net Promoter Score (NPS) score
  • Customer Effort Score CES score
  • Reach to Lead Conversion
  • Lead to Customer Conversion
  • Retention Rate
  • Referral Rate

How well do customers listen to you?

  • Call center data (if applicable)
  • Customer Compliance
  • Customer Comprehension of Your Communications

How easy is it for customers to work with you?

  • Speed of application/entry process
  • Speed of issue resolution process
  • Number of Customer Complaints
  • Number of Customer Kudos
  • Customer Satisfaction with Touchpoints

How do customers feel about you?

  • Quality Scores
  • Likelihood to Recommend

What is Next?

Next up, we are going to look at Project 1.11, 12, and 13 – Key Activities, Resources, and Partners.

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

 

To your health,

The Team at imagine.Go

 

Learnings on Channels for modelH
imagine.GO

Learnings on Channels for modelH

We just wrapped up our 8th business building block sprint on Channels. In summary, we completed 2 objectives:

  • What questions do we ask for the canvas regarding Channels?
  • How do we treat the development and optimization of the Channels that help our Customer Segments find our Value Proposition?

 

project-1.08-channels-summary-batterii

Your Channel (communication, distribution, or service) is where your Value Proposition is delivered to your Customer Segments.  Channel development starts with understanding the Buyer’s Purchase Journey, defined by the specific steps a buyer takes while deciding to purchase a given Value Proposition. But healthcare business models must also consider which Channels are relevant to how a User actually “uses” a given Value Proposition. Finally, we’ll explore the effect that Key Influencers and Intermediaries have on a Channel’s outcome to achieve optimization.

Customers often use multiple Channels to decide upon and purchase (or consume) a given Value Propositions. Consumers have the expectation that retailers with multiple channels should have alignment across channels for both service and sales. Channel Threading is the intentional connection of multiple Channels with the understanding of how they will be used to complete an outcome for your Customer Segment.

Doing this well creates distribution channels that are linked together in a meaningful way and also enables healthcare companies to create personalized products and messaging. Market leaders in retail health first focus on helping consumers navigate through the maze of health options available. Market disrupters work to remove the maze altogether. As the maze is different for every individual, the most successful healthcare business models will know and understand their customers’ preferences for successful channel “navigation.”

Our canvas should help practitioners both:

1)     Design business models that optimize Channel mix based on Customer Segment preference, and

2)     Thread Channels together to create a meaningful purchase journey.

 

1st – Questions to Ask on the Canvas for the Channels

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

  1. Through which Channels do your Customer Segments want to be reached?
  2. Through which Channels are you touching your Customer Segments now?
  3. Do your Customer Segments use multiple Channels, and if so how?
  4. Which Channels work best for your target Customer Segments? How are you integrating your Channels with your Customer Segment routines?
  5. Which Channels are most cost-efficient for your target Customer Segments?
  6. Are there Intermediaries in your Channels?
  7. How do you engage your Key Influencers into your Channels?

modelH Canvas 8 Channels Highlight

2nd – How to Optimize and Thread Your Healthcare Channels

How do you design business models that optimize Channel mix based on Customer Segment and preference by threading them together to create a meaningful purchase journey? It is critical for healthcare business models to correctly use their multi-channel strategy. It is necessary to know your total traffic amount from each channel.  Moreover, you must be able to trace how consumer transactions take place – across multiple channels.  Most importantly, you need to make it as easy possible for the consumer to navigate where they need to go and convert.

Channel Threading is the intentional connection of multiple Channels with the understanding of how they will be used to complete an outcome for your Customer. It is tying together the touch points that exist today, as well as areas that are not being addressed but are desired by your Customer Segment. Furthermore, the modern customer uses multiple Channels to decide upon and purchase (or consume) a given Value Propositions. To do this well, it creates methods of distribution that are linked together in a meaningful way. This enables healthcare companies to create personalized products and messaging.

Channel Threading starts with understanding the consumer’s purchase journey. The purchase journey is comprised of the steps a customer takes in deciding to buy and use a given Value Proposition (product).  It involves the Channels in which the steps take place as well as the affect that Key Influencers and Intermediaries may have upon the outcome. However, healthcare it is very complex. There are two parts to the journey: the purchase and the use of the purchase. Both of these parts matter equally in healthcare business models, but, unfortunately, do not have equal treatment.  Traditionally, more time has been spent on the sale than on the use side of the equation.

modelH - Consumer Behavior when Purchasing

Ultimately, the winning healthcare business models will not focus on helping consumers navigate through the maze of health options available but instead remove the maze altogether. As the maze is different for every individual, the most successful models will know who their customers are ahead of time and will understand their preferences.

Before You Begin

Keep in mind that you cannot be all things to all people. Increasingly complex consumer behavior is strategic to understand and address in your actual channel strategy. This strategy should stem from what your Customer Segment desires, instead of what you believe it needs. When you pick a channel, you must also pick an “EST” which creates a focused experience. For more on the theory of EST, I suggest you read Winning at Retail: Developing a Sustained Model for Retail Success by Willard Ander and Neil Z. Stern.  The upshot of this theory is that the best retail channel companies intentionally create a defined market position for themselves, and reinforce this position in the customer’s mind. In short, they dedicate themselves to being the best at one of the “EST” models, and then defend that advantage against the competition.

project-1.08-channels-winning-at-retail
Winning at Retail: Developing a Sustained Model for Retail Success by Willard Ander and Neil Z. Stern

A Simple Plan

Basically, it is very simple to implement. First, pick which Customer Segments are most important to you. Then build what Channel(s) matters most to your customer. Put them in a priority list according to their needs and what is perceived as Value. Then craft an orchestrated Experience across the list.  Devise what adds value to your Value Proposition (both known and unknown) in an iterative fashion.

  1. Building the appropriate channels for any business starts with identifying the jobs-to-be-done (JTBD) for each of the consumer purchase journey categories, or “bubbles” as shown above.
  2. The next step is to identify all possible channels that the consumer can use to complete their JTBD. This includes channels inside and outside of your control.
  3. After all possible channels are identified, consider the degree of fit for each selected channel: product and customer fit, profitability, goals and objectives, and sales goals.
  4. By definition, a “hassle map” defines all of the actual steps that characterize the negative experiences of the customer.  For our work, we will use the term but understand that it does not necessarily equate to all negative experiences.  In this situation, we will define the Hassle Map as the “steps that characterize the various channel experiences of the customer in completing their JTBD.” The goal is to create the actual journey of the customer across all selected channels.
  5. The next step is to create the desired “channel threads” from the representative gaps in the process. These threads show how the customer uses your channels in combination or sequence to complete their JTBD, planned or otherwise. The redesign requires accentuation of the existing positive experiences and improvement of those negative experiences that represent what is most appealing to the customer.  This minimum viable product approach to channel improvement is necessary because 1) there is a limited amount of work that can be accomplished at any given time, and 2) the customer’s needs and wants for a channel will change over time as they acclimate to the process (and like it). An example for this is the migration from retail banking to online banking.  This work also includes clearly stating what is being “left out of the process so that manual workarounds can be developed and communicated”.
  6. The final task is to create a channel development plan.  This is in conjunction with the channel owners and other internal stakeholders, for the tasks needed to modify and/or link channels to optimize the consumer JTBD flow.

 

Build with the End in Mind

What happens when you Channel Thread without regards to good Experience design?  This is a key question. Watch this engaging video explains this concept.

In all seriousness, this is a funny video that does a good job of showing how multichannel retailing can work – although in this case, very poorly due to a bad customer experience. Your customers want and expect you to tie together their experiences across your channels (and others). Imagine ordering a pizza in the future and your health insurance premiums change with your toppings.

In Conclusion

There are three additional factors to consider when selecting your Channels and Channel mix: control, visibility and customer preference: Control – amount of control you have over the customer experience; Visibility – strength of potential to collect customer data; Customer preference – prioritizing options for direct or indirect channels.

Take time to consider any of these topics along with other relevant factors in the Channels block of your business model canvas. Regardless of whether your business model is aimed at Patients, Providers, Payers, and or Purveyors, you need to focus on properly defining your Channels, Channel mix and the threading of your Channels.   The goal is for the Customer Segment to successfully complete their purchase journey and realize your Value Proposition to its fullest.

What is Next?

Next up, we are going to do another doubleheader. We will examine Customer Relationships (1.9) and Customer Experience (1.10) simultaneously.  Hopefully, we can optimize making sense out of experience when juxtaposed with relationships.

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

 

To your health,

The Team at imagine.GO

 

Learnings on Key Influencers for modelH
imagine.GO

Learnings on Key Influencers for modelH

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:

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

modelH - 1.7 Key Influencers Summary Baterrii

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.

1st – 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.

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

modelH Canvas 7 Key Influencer Highlight

2nd – 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.

 

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.

[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

[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

Teaching NEXT for Startups
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.

 

SWNEXT-1Here 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.

  1. Business Model Canvasing (Osterwalder, modelH)
  2. Customer Development (NEXT)
  3. 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:

SWNEXT-2Week 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.

Register at www.swnext.co/events/jacksonville-next

 

To your health

The Team at imagine.GO

 

Learnings on Buyers and Users for modelH
imagine.GO

Learnings on Buyers and Users for modelH

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:

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

modelH - 1.1 Customer Segmentats Summary Baterrii

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:

  1. Improved consumer experience yielding an informed decision maker aligned to their risk and reward,
  2. Increased access to necessary care through an engaged delivery system, and
  3. 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),

modelH Canvas 1 Buyer Highlight

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

modelH Canvas 2 User Highlight

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

modelH Canvas 3 Intermediary Highlight

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.

  1. Users should always be considered an individual (consumer).
  2. Buyers can be the user, a business or a government.
  3. Users and Buyers have different driving motivations and thus different Value Propositions.
  4. 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.

 

To your health,

The Team at imagine.GO

 

How to Explain Healthcare Reform to Your Customer
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How to Explain Healthcare Reform to Your Customer

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.

H&R Block Reform Conversation Header

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.

 

Infographic on Employer Understanding of Healthcare Reform

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.

CIGNA Explains Healthcare Reform

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.

CIGNA Values My Opinion

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!!!

CIGNA H&R Block Reform Conversation

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