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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

Learnings on Intermediaries for modelH
imagine.GO

Learnings on Intermediaries for modelH

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

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

modelH - 1.3 Intermediaries Summary Baterrii

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

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

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

modelH Canvas 3 Intermediary Highlight

2nd – How to Identify and Use Healthcare Intermediaries

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

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

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

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

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

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

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

In Conclusion

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

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

Take time to incorporate these approaches into the Intermediaries block in your business model canvas. Regardless if your business model is aimed at Patients, Providers, Payers, and or Purveyors, defining the Intermediaries between your Customer Segment and your Value Proposition is important to creating your best business model.modelH Canvas 3 Intermediary Highlight

What is Next?

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

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

 

To your health,

The Team at imagine.GO

 

 

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 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
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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