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Learnings on Key Behaviors for modelH
imagine.GO

Learnings on Key Behaviors for modelH

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?

modelH - 1.6 Key Behaviors Summary Baterrii

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:

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

modelH Canvas 6 Key Behaviors Highlight

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:

  1. Enumerate the Key Behaviors
  2. Apply a Behavior Change Model
  3. Build Behavior Triggers Into Your Key Activities
  4. 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.

modelH - Enumerating User Key Behaviors

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
imagine.GO

Learnings on Value Propositions for modelH

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.

  1. What compels a purchase decision by the Buyer?
  2. What aspects of the User’s life do you deliver value?
  3. Which jobs, pains, and gains need to be addressed in the Value Proposition?
  4. How much time does it take for the Value Proposition to be delivered?
  5. What social value(s) is met (if any) while delivering the Value Proposition?
  6. What bundles of products and services are offered in the Value Proposition?
  7. How can the Value Proposition be personalized based on the Customer Segments need(s)?
  8. What Intermediaries derive value from our Value Proposition?
  9. How does the business model gain insights from Customer Segment interactions?
  10. What Key Behaviors are required for the Buyer & User to realize the Value Proposition?
  11. What Experiences are required for the Buyer & User to realize the Value Proposition?
  12. 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

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 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.

 

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
imagine.GO

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

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 

 

modelH Canvas 4 JTBD Highlight

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? 

 

modelH Canvas 4 JTBD Highlight

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

 

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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

 

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

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

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.

model Business Model Canvas for Healthcare

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.

 

To your health,

The Team at imagine.GO