What Health Insurance Marketers Can Learn From Starbucks

The annual enrollment period is a key time for health insurers, but consumers don’t typically show great interest. Despite its being a life-saving benefit, consumers spend very little time making coverage decisions. Most put more thought into their coffee orders.

Perhaps the industry needs to try a new approach to customer engagement.  One need look no further than the ubiquitous Starbucks for inspiration.

Think of how many times you order your coffee from Starbucks with your iPhone and grab it the minute you arrive.  While there, you easily pick up a last-second latte for your co-worker with your preloaded card.  Even better, you redeem a free drink based on your loyalty status, which you use on your co-worker’s drink.

I know: how can you compare health insurance and coffee when they are vastly different?

While that’s true, consumer expectations for ALL brand interactions are remarkably similar: We all want simple, streamlined experiences customized to anticipate specific needs. We want to be at the center of the consuming experience. That’s something Starbucks owns, while the health insurance industry has yet to attempt.

By perfecting its customer loyalty program for years, Starbucks has gleaned reams of customer insights, which feed emailed targeted offers encouraging retention, cross-selling and more frequent transactions.

Starbucks has mastered the art of true omnichannel customer experience: direct mail, email, online, in-store and app. The key lesson here is that consumers drove these innovations (even the option to personalize cups with whatever names they fancied).

By comparison, health insurers have been historically viewed as having a complicated product menu; being highly selective in who they insure; being very expensive; difficult with claims; and essentially operating like a government bureaucracy. Their websites are a hodgepodge of information where members/prospects cannot quickly navigate to the content they seek.

Most payers have barely utilized multichannel marketing (forget about omnichannel), leaning heavily on direct mail. Payers should be able to communicate via omnichannel messaging to 100% of its customer base and at least 60% of prospects.  Healthcare marketers’ ability to catalog and message based on personally identifiable information is critical for true consumer-centric, marketing success.

We must recognize how consumer-shopping habits have changed health care. Ever-expanding self-health resources like WebMD empower consumers as their own gatekeepers for diagnosis and treatment. Not exactly choosing between a latte and espresso, but it shows how consumers prefer to own their choices.

In years to come, fewer members will seek professional health advice in person or even from a physician. More will depend on health-modeling algorithms linked to their personal identities through a relationship with Amazon and larger anonymized health databases. They may be able to transfer basic health information into an online portal for professional analysis.

If patients are unwell, a simple and inexpensive teledoctor video appointment could be available, perhaps with same-day prescriptions filled through Amazon’s online pharmacy PillPack.

Continuous monitoring and data collection will also be possible. Imagine using your wireless scale or wireless blood pressure monitor, each syncing to your watch or phone and communicating data to your doctor, who can identify through algorithms that you need to see a specialist ASAP.

Consumers perceive that health insurers have too much power.  Payers would be better served if we flip the script and empower patients to control their own health insurance.

By identifying the ideal customer journey(s) with current content and channels, we can fill any gaps with new content and additional delivery systems.  We can pursue an omnichannel approach that synthesizes every prospect/member interaction through data.  Finally, we can create loyalty plans that reward healthier lifestyles.

We can transform the image of health insurance among consumers. We can reach them where they are and get them more involved, to both their benefit and ours.

The ball is in our court. Do we want to be the Starbucks of tomorrow  — or the Sanka of yesterday?

It’s About LTV…not CRM

A while back, I ranted about how Salesforce isn’t CRM. I made the case that Salesforce (and worthy competitors) are fantastic platforms that manage and facilitate CRM, but that testing and learning—which must take place at every customer moment of truth—can’t yet be managed by AI. Until it can, human intelligence and years of hands on LTV marketing expertise will be required to execute CRM to its fullest.

 

But let’s step back.

 

What is the purpose of CRM? Forget your answer if it is not: to maximize average customer lifetime value (LTV). How each brand gets there may be different; Apple and Tesla through innovative technology, Nordstrom and Four Seasons through service, Zappos and Amazon through ease/simplicity, and McDonald’s or Walmart on low-cost. Regardless of the path, each strives to constantly generate new customers, keep existing ones, win-back potentially valuable ones and grow the value of all to the company.

 

In order to maximize LTV, (and believe me, it needs to happen at every moment of truth along your customers’ journey) you must be testing messaging, design, offer, and channel. Add in segmentation and/or vintage testing within each touchpoint, and you have a real test and control strategy designed to maximize LTV.  In this scenario, there could be as many as 823,543 tests at every touchpoint. 

 

Still impressed by those doing A/B testing?

 

In fairness, even the finserv and telecoms who have been doing response marketing for generations don’t go to that extreme in number of tests. But I can assure you that I have designed and executed test matrices for forward-thinking retail, pharma, telco, finserv, fintech, CPG, etc., that had dozens of tests at each contact point—each designed to maximize performance of that individual communication, and combined, to maximize LTV.

 

If you are concerned that what I describe sounds like hard-selling your customer base, be assured it is not. If your customers are turned off with irrelevant messaging or the quantity of communications you send, you will definitely see a drop in performance. Your customers will always let you know what motivates them. That is why, in 2017, I am still shocked to awake to email offers from companies I have long-standing relationships with, who are guessing at a promotion that couldn’t be further from my interest. And to be honest, if I weren’t in the industry, I would have unsubscribed long ago.

 

In the end, your CRM systems don’t exist to increase revenues; they exist to more easily execute well thought out and ongoing marketing testing. And that testing needs to be designed to maximize performance at each touchpoint so that cumulatively, you will have maximized average customer lifetime value.

 

Isn’t it time to change your focus to LTV from CRM? Let’s talk.  

#LTVnotCRM

I Know Performance Marketing, and You, Sir, Are Not Performance Marketing

Today’s rant is about so-called “performance marketing.” But to make it, I must first address football. Bear with me…

Football is followed by all ages with a passion often reserved for summer barbecues, church revivals and The Bachelor. Both beautiful and violent, football can be eyes-glued-to-the-screen drama. It can break your heart and lift your soul all within moments.

At the same time, it is a non-stop ATM for its fortunate few owners, the players who captivate us and the suite owners who run businesses able to capitalize on the world’s most popular sport.

The sport is also one of the simplest.

Hold on, Jay, you might say. Football is anything but simple. In fact, it’s so complex we still don’t always know if a catch is really a catch.

And I say, No, I’m not talking about American football. I’m talking about fútbol—the real football.

You see, the rest of the world has been playing fútbol in its original forms since 206 B.C.—long before Rutgers played Princeton in 1869 in a new American game that looked kind of like rugby but had different rules. Despite fútbol’s global popularity and the fact it’s played with feet, we loud, obnoxious, parochial Americans proclaim our football is the “real” football, even though we kick the ball only on occasion and a team’s success is largely based on how well the players perform with their hands.

Our football is high-scoring. It is savage. It is often as much a battle in the muddied trenches as it is an awe-inspiring ballet by some of the greatest athletes on earth. It is also incredibly addictive. We love this game so much we’re willing to bet billions each year in the hopes of winning a few bucks.

And here’s the (ahem) kicker: We demand that the world’s most popular sport—one played by more than 250 million people in more than 200 countries and one that actually relies on the use of a foot—be called “soccer” so to not create confusion with our non-foot-based football.

Consider this: Nearly 115 million people worldwide watched Super Bowl 50, and those people spent more than $12 billion on game-related food and beverages. Advertisers further spent $5 million for just 30 seconds of air time during the game, and for most, it was a smart buy. No one can dispute our football’s incredible success. We even take our football to the U.K. three times a year—and demand it be called football in a country so passionate about its fútbol that it has traveling hooligans who make Raider fans seem like the Wimbledon elite.

So Jay, tell us—why exactly are you ranting about American football vs. fútbol/soccer?

I am because it illustrates this point: The right label, loads of confidence and a louder voice can run roughshod over even the most successful entity preceding it.

My sporting tangent relates to a label battle between the original fútbol of performance-based marketing and the newer, louder American football of Performance Marketing.

A relatively new cottage industry, Performance Marketing is a term used to describe digital media marketers who get paid only for the ads defined as having “worked.” I get it. Name fits. But it ticks me off. Here’s why: That term makes it sound like theirs is the only performance marketing, which, to me, is as crazy as coopting the name “fútbol” for an entirely different sport.

You see, since 1983, I have been running with my fellow direct marketers in a race to the bottom. Oh, our work has been demonstrably great and it’s made our clients billions of dollars. But we could never find a moniker for ourselves that would elevate us from the basement of the shiny agency offices.

What started as Direct Marketing eventually became labeled Direct Mail. When 1-800 numbers were in fashion, we went back to Direct Marketing to sound less single channeled. Then IBM’s super computers came along and we utilized reel-to-reel data to perform Data-Based Marketing. Once some brands turned to television to direct their message, we became DRTV. Then compiled, rentable data increased and our clients started transitioning from transaction-based databases to marketing databases. We realized we could be much more effective at modeling so we could test across a broad matrix of offers/creative/segment, cross-sell, up-sell, correct attrition at its earliest stage and ultimately maximize customer LTV. We changed our moniker to Relationship Marketing. Then along came third-party sales-management software, and suddenly we were changed again—this time to CRM.

(Ironically, we smart direct marketing guys clearly suffered from a branding problem, but that’s a rant for another time.)

Despite all those naming attempts, the bottom line is that performance was and is the essence of what we do every day. Test, revalidate, control, rinse, repeat. We were the only marketing segment that could prove ROI to the penny. Yet while we proudly gloated together about case study after case study, we still hung our heads and mumbled when we talked to “real” ad folk upstairs. And now along comes a bunch of kids, with their rock-and-roll music and their media buying/selling gamble, boldly shouting out that they are Performance Marketers (shortly after creating a Wiki page). Damn it! We spend three decades chasing the right label, and these punks nail it on their first try. Worse yet, they get to work upstairs with the cool kids while we’re still stuck next to the radon detectors near the boiler room.

I will not allow the work we’ve done since Caples sat down at his piano to be relegated to being called soccer. From this date forward, I am owning the term Performance Marketing, and I am asking all others who do what I do to rise up and call themselves Performance Marketers too.

Now off to my bicycle to chase down a spectacular lowering Spring sun, while listening to uplifting music to escape the other rants in my head. I call this form of therapy, swimming. 

 

Nothing Ruins UX Like Putting a Big $ In Front of It

More and more marketers today are obsessed with UX—or user experience. UX is one of the hottest topics in marketing and technology, fueled by the rapid growth of smartphone, and wireless connectivity that allows us to be online nearly all the time. They spend more of their precious resources—budget, time, personnel—on creating an optimal UX. They hire digital agencies (who often hire UX specialists) to develop smarter/smoother web pages that adapt to any desktop, laptop and/or mobile format, 24/7 customer chat availability, one-click checkout, and other innovations to ensure that you have a great experience when interacting with the brand online.

That is a fantastic goal, and one all marketers should aspire to. But UX did not begin with the iPhone. It didn’t start with wi-fi or broadband or email. Amazon didn’t invent it even though they certainly shaped our modern perception of it. No, UX has existed since the first days of humans making things for other humans. When the wheel was first created and people wanted wheels made for them, you can bet even the most Neanderthal wanted exactly what they bartered their hard-earned crops, pelts, or goats for.

Likewise, despite the increasingly online nature of consumer interaction, UX doesn’t end when the prospect goes offline. That experience continues into the real world. Even when you buy something from an online retailer, that business still has to meet bricks-and-mortar expectations for delivering on its promise for a product or service. Comcast could win every digital UX award by making it seamless and simple for users to sign up for cable and schedule installation in two touches of an iPhone screen. That won’t matter if their real-world UX continues to be so bad it goes viral and begets millions of sarcastic meme reposts.

The online shoe store that walks the UX walk offline

When it comes to online retail, the trade-off for consumers is price and choice vs. looking and trying. You may find that shirt you want cheaper than at any physical retailer, but you won’t know how it looks on you until you rip open the envelope and try it on at home. And it’s always a very disappointing UX when that shirt doesn’t fit or doesn’t look like it did online, no matter how “optimized” the online shopping cart was.

Zappos, one of the smartest marketers around, gets this. They see the “long UX,” from search to purchase to delivery to return. They make it very easy to find what you’re looking for, with pictures of the shoes modeled on real models with actual sizes called out. You can see different colors, different angles, read reviews, everything you need to make an informed decision online.

But where Zappos wins on long UX is realizing that even their nearly flawless online experience will still result in some misses when the product actually reaches the customer. There’s still a strong chance that even the most carefully selected shoe won’t be glass-slipper snug when you slip it on. So Zappos encourages you to buy more and then return what you don’t need. They want to ensure that your UX ends with a pair of shoes you love that fit the way you want, regardless of what it takes to get there.

When User Experience $UX

I’m sad to admit that I am old enough to remember when the UX of flying was a special experience. Airlines really meant it when the pilot said, “Sit back, relax, and enjoy the flight.” People actually dressed up to fly, and not just business travelers.

Perhaps no other industry in my lifetime has inverted UX like the airline industry. It used to be that booking a ticket was a rather arduous process – calling (or traveling to) a travel agency to build your trip and pay them a fee to book your flights. The flying itself, though, was usually a good experience, and certainly one of the more luxurious ways to travel. Today, you can shop dozens of airlines and book a ticket between the time you order a cup of coffee and get it served to you, but the UX of actually flying has become a gauntlet of hidden fees and terrible service.

No airline embodies this more that Spirit, whose name often reminds travelers of a haunting they wish they had exorcised. It’s super easy to find a really low fare and book your ticket on Spirit. But that’s where the UX ends and the $UX begins. The term “nickel and dime you” is appropriate here, not because the hidden fees are so small, but because the exorbitant fees they slap on every UX feels like getting hit with a sock full of coins. They charge $35 to put a carry-on in the overhead, and $10 to print your ticket at the airport, among other transaction fees that read like fines for traffic violations. Added to that, Spirit generally could care less about real-world UX. They are there to make it easy to take your money and get you alive to your destination. Everything else, it seems, is outside that UX. They are the epitome of the old adage “cheap, fast, good—pick two,” only “good” has been removed from the equation.

As with Zappos, however, it’s possible for online and real-world UX to work in harmony in the cut-throat world of air travel. Southwest and Virgin Airlines are two good examples. Southwest certainly can put the bus in airbus, but at the same time, they deliver great long UX with no baggage fees and seemingly always-cheerful service. Virgin America also works hard to bring the service back to the flight experience and make you feel welcome when you board one of their planes, even if the purple lighting begs for a velvet, black-light, Led Zeppelin poster on the bulkhead. They pioneered bringing the online UX to the in-flight experience, making their passengers feel both valued and able to customize their entertainment and food experience, even if it costs just a bit extra.

And I don’t mean to just pick on Spirit. You can likely throw a dart at the names of any airline, and have an almost perfect chance of it landing on an airline which has a wonderful digital UX but a miserable long UX.

Putting the Ritz on UX

Another example of real-world UX is the Ritz-Carlton. Of course, this is a brand that can afford to closely manage the long UX. But there are many companies that are far more profitable than Ritz Carlton who don’t manage their UX to the same degree. Here is one of the most recognized luxury brands in the world, one built on (essentially) giving the guest whatever he or she wants. In a recent interview with president and COO Herve Humler in Forbes, Humler talked about how every Ritz-Carlton employee is empowered to fix any guest problem, without asking permission, even if that solution were to cost as much as $2000.

I’m not suggesting that a single other company should employ the Ritz plan. The point is that here’s a company that understands both its brand and the customer experiences that support that brand. Why make a high-rolling guest wait for a staff member to fetch a manager—that’s the real-world version of a BUFFERING screen. Your digital UX firm wouldn’t let that happen. Why is so much time and money being spent on the digital UX but not the long UX?

So how do you create a long UX that optimizes the user experience that happens offline? In the upcoming second part of this blog, I’ll discuss my SIMPLE system for how to train staff and develop processes so you can resolve problems on the spot, give your customers what they expect, and let them enjoy their long UX with no interruptions. After all, LTV is a far more valuable data point for marketers than click through rates.

Would Everyone Please Stop Calling Salesforce, CRM?

What if I told you that I have my own private driver who takes me everywhere I need to go? You might think I’m very lucky or very well off. But what if I also said that I wasn’t particularly lucky or well off or special, because these days, almost everyone has a driver? You would probably find that puzzling and ask what I was talking about.

“The GPS that most new cars now have,” I answer. “It’s like having your own personal driver.”

Surely you would find this statement disingenuous. After all, while a GPS is a great tool for helping you navigate where you need to go, you still have to do the driving yourself, which involves determining your destination, fueling the car, and handling any problems that come along the way — flat tire, collision, emergency back home, etc. The GPS doesn’t do any of that for you.

Yet there are many people in C-level offices who proclaim that their companies “do” CRM because they have subscribed to Salesforce. That is every bit as ludicrous as saying that you have a personal driver because you have a GPS system in your car.

What is CRM? It’s the methodology that each company uses to turn its suspects into prospects, prospects into new customers, and new customers into long-term, highly profitable customers. To do that, companies need to properly understand who their most profitable clients are, so they can target and properly manage communications with similar businesses. Doing that requires data analytics and segmentation tools that most CRM software like Salesforce can do.

But while Salesforce can facilitate CRM, Salesforce itself is not CRM. You know who else agrees with me? Salesforce. This is what they have posted on their home page.

“Customer relationship management (CRM) is all about managing the relationships you have with your customers. CRM combines business processes, people, and technology to achieve this single goal: getting and keeping customers. It’s an overall strategy to help you learn more about their behavior so you can develop stronger, lasting relationships that will benefit both of you. Successful CRM involves many different areas of your company, starting with sales and extending to other customer-facing areas like marketing and customer service. Salesforce.com offers a technology solution for all those areas.”

(Disclaimer: I am actually a fan of Salesforce and its contribution to proper CRM. I have used it while assisting many of my clients through their subscriptions. I could write a whole other post about its outdated — potentially never “indated”– user interface that every client i’ve worked with hates. But that’s for another day.)

So CRM is a methodology which requires a proactive process and a reactive dialog, all within the guidelines of specific corporate messaging. A typical sales process looks a bit like a conveyor belt. At the front end are suspects leading to prospects leading to qualified leads leading to proposals leading to clients leading to growing the lifetime value of each client. That is what CRM in its totality must accomplish. Since conveyor belts are mechanical, the idea that CRM can also be mechanical seems to make sense. The problem is that conveyor belts move things while CRM must move people.

And here lies the greatest rub. Long ago, Katherine Briggs and Isabelle Myers completed a still never disproven study which proves that there are 16 different personality types among humans. Consider the sales implications of that when you are trying to sell a product or service to a company or organization. In most cases, there likely is more than one decision maker to affect.  That creates as many as 256 potential personality combinations. Oh and don’t forget about your sales person/team and their personality traits. Add even a single salesperson and there are over 4,000 personality combinations. Maybe most important, each prospective company has its own unique opportunities and obstacles which must be addressed. These different combinations create the need for different messaging and approaches and that’s where “systems” fall apart and human interaction must manage the transformation. You just can’t perform CRM by opening Salesforce, sending a blanket email to 1,000 different individuals who seem as if they have similar company needs, and count on a singular set of words working equally on all.

So if email blasting isn’t the best use of Salesforce, how can it be used best? My dad used to have what salespeople used to call a “tickler file.” That tickler file was a recipe box with index cards inside on which each contained notes from each conversation. He would write on the card the date for the next interaction, and then file the cards in sequence such that each morning he would open the box and see if any of the cards showed that date for the next step. That is the best use of Salesforce.  If you are using Salesforce as a way to communicate to everyone who sits at the same location on your conveyor belt with the same message, then you don’t know how to sell and no software will ever help you. Salesforce needs to facilitate a highly effective action that a salesperson must do uniquely and on a case-by-case basis. And not enough c-level folks realize that the subscription wasn’t the sales solution. It certainly can make sales people more effective when used properly, but it is not the methodology for increasing sales.

And that is the point. Salesforce is a very good tool for increasing sales, but it is not a method. It’s not a strategy or a process or a salesperson. It is something you use within your CRM, not something that does CRM. That heavy lifting must be done by each person on your sales team(s). And you’ll know that first hand when sales don’t hit goals and you are called in to explain that to the board. Because they won’t be calling in Salesforce.

What The Brady Bunch Taught Me About Content Marketing

In 1971, The Brady Bunch aired one of its most iconic episodes where Jan, tired of being in older sister Marcia’s shadow, whines the classic catchphrase, “Marcia, Marcia, Marcia!” Jan’s angst comes from Marcia being lauded for her accomplishments while nobody really pays attention to Jan. Of course, Jan doesn’t realize that Marcia’s earned the praise, and then sets out to one-up her older sister without really understanding what has made Marcia so successful. This leads to a disastrous tryout for the pom-pom team, which leaves Jan even more frustrated and depressed.

Forty years after that episode aired, today’s “content marketers” are going full-blown Jan, waving their arms around in a desperate bid to draw attention away from proven marketing strategies. But like Jan, they don’t really explain why people should turn away from their older, more accomplished sister, except to repeat, “Content, content, content!” ad nauseam to any business executive who will listen.

For the first 20 years of my career, I was a direct marketer. That phrase, “direct marketer,” may elicit “old timer” types of snickers from today’s marketers. But during that time, I built my success on pairing the science of understanding the wants, needs, and motivations of my prospective audience with the art of delivering a message that tapped into those desires. In other words, I matched targeted content to segments where the messages would have the greatest success. I always argued that “direct marketing” should have more properly been named “relevant marketing.”

Today’s content marketers most often repeat many of the same “megaphone” mistakes many marketers have made for decades. The science that makes direct marketing, you know, direct, is replaced with the old shotgun message approach, only now the content marketing barrels are often packed with pellets of hip irony. Take Old Spice for example. The company has a Twitter feed that’s very funny. But when it tweets those hilarious comments, it does so to all 224,000 of its followers as if that group is a one-size-fits-all entity. Yet that group likely includes followers such as twenty-somethings who liked the entertaining Isaiah Mustafa centaur spots, a 13-year-old Drew Brees fan who notices that Drew’s name was tagged in an Old Spice tweet, and my 80+ dad who has worn old spice since long before Matthew Perry’s father was the sailor in their TV spots of the 70s and 80s.

What does the target audience for those Old Spice tweets have in common? Only that they followed (past tense) Old Spice on Twitter. There’s no way to really know, however, how many of them are following Old Spice actively, are actually reading the tweets, or are even using Twitter very much at all. Most importantly, are they even consumers of Old Spice or just of their clever Twitter feed?

Then there’s the content itself. Old Spice posts, “Cool shirt. Not you, sorry. That guy behind you.” What exactly am I supposed to do with this? Why is this content marketing any different than a Dane Cook Twitter feed? Why is it any more effective than monkeys creating havoc in way too many Super Bowl commercials? Where’s the ROI?

Old Spice is just one example, there are many brands and companies taking this same megaphone approach. They are listening to the content marketing “Jans” who claim that more proven marketing strategies don’t deserve the budget they get, and that content marketing deserves the lion’s share because everything else is old and passé.

Content marketing speaks to followers as if they are a single entity who all follow for the same reason.  But some followers are there for the entertainment while others are there because they are evangelical about the brand/product(s). Why tell jokes to early-adopter customers and show product demonstrations to followers who only want jokes? After all, there’s a really good chance that one of your followers also follows both The Tonight Show with Jimmy Fallon and Swiffer. How can you target effective content to that person?

So beware of content marketers who try to take down their successful older siblings without proving there’s an ROI. Content marketers may momentarily grab our attention, but like Jan, until they prove to be as good, they are no Marcia Brady.

Hold your horses.

I’m workin’ on it!!