customer analytics

12月 282012
 

A colossal man-made storm known as “the fiscal cliff” looms on the horizon of the United States economy.  Much attention has been paid to the political wrangling behind this situation in Washington, while Congress seems oblivious to unanimity among economists that large-scale abrupt austerity measures like this “fiscal cliff” generate more harm than good. And most troubling is that while all parties agree that it should be avoided, no deal is likely before the end of the year, so the fiscal cliff is looking mighty inevitable.

For a good non-partisan explanation of the fiscal cliff and its consequences, it’s worth reading this post to the Washington Post Business Blog  called The Fiscal Cliff: Absolutely Everything You Could Possibly Need to Know, in One FAQ.  In that post, it describes the “fiscal cliff” as an “inapt metaphor for the looming consequences of some very bad congressional decisions,” further clarifying it as

much too much austerity, much too quickly.”

At its simplest, the fiscal cliff is a combination of taxes, government spending cuts and a debt ceiling aimed at reducing the federal government deficit. It's universally accepted that it will have negative results for individuals and businesses alike. The Congressional Budget Office (CBO) projects it will weaken the economic recovery and possibly plunge the United States economy back into recession – retracting in 2013 by 0.5% versus the current projection of +2.4%, and spike the unemployment rate to 9.1% from the current 7.9% rate. Private sector analysts also consistently predict gloomy outcomes from the fiscal cliff, and it’s generally recognized that it will affect some industries more than others, but all of them negatively.

The uncertainty generated by this situation has been reported by CNBC as already having put the damper on the economy by suppressing stock prices and making companies unwilling to make the kinds of investments that drive employment growth. Since growth for most organizations is driven by some combination of consumer or government spending, I believe the fiscal cliff highlights the role that marketing can play for each organization to counteract its negative effects in some important ways. Here are some of the ways marketers can make it happen: 

Find your true north
Weather vane in Georgetown, Washington, DC.In the field of navigation, “True North” references the need to calibrate magnetic compasses based on the ever-shifting magnetic anomalies of the earth – without doing that, navigation is inaccurate. The same holds true for business – you need a clear point of reference to set direction amid great uncertainty.

One simple place to start is with a cue from brand management - validate how your organization’s mission statement fits with your customers’ experience. Are you in business to solve world hunger? If so, is that clear from the experience that individuals and organizations have while engaging with you? If not, it might be time for a closer look and some important changes. Taking such a brand management approach should span all areas of the enterprise that engage with the customer, with marketing as hub of the customer relationship.

I'd like to suggest one resource for "finding your true north" in this way - an e-magazine produced by the ANA for SAS, called Standing Out – Rethinking Brand Differentiation for Competitive Advantage.

Complete your 360° view
Once you’ve established your true north, complete the picture so you have a 360° view. Just as your true north should be centered on the customer, your view of the customer should be as complete as possible. An important way to accomplish that is by combining online, offline and social data about your customer that result in richer profiles and more meaningful segmentation that heightens the relevance of your customer engagements.

There is a great story about how national clothing retailer Chico's did just that in the white paper, Ten Ways to a Customer-Centric Data-Driven Business Strategy. You can read how they tripled their win-back rate of lapsed customers and achieved other amazing results with a total, multichannel view of each customer.

Chart your course wisely
As your organization becomes more adept at marketing analytics, it will become clear that some combinations of plans and actions yield better results than others. The keys are hidden in your customer data and can provide answers to two critical questions:

  • Given the current objectives and corresponding constraints, how can we maximize the overall contribution of our marketing program to organizational growth and profitability?
  • If we increase the marketing budget, what would the payback be?

The answers are found with marketing optimization, which applies marketing analytics to consider multiple possible scenarios and choose the one that delivers the best result – lowest cost, highest revenue, or however you define "result." I recommend this short, on-demand webinar produced by the DMA that outlines marketing optimization and provides some great case studies: Improve ROI with Marketing Optimization

Don't Delay
One of the best examples of how marketing can make a big difference in the middle of a recession is the story of telecom giant Verizon. In the middle of the 2009 recession and while facing stiff competition and sweeping technology changes, Verizon boosted the revenue lift of their campaigns by 25% and improved their campaign close rates (sales) by 250%. They achieved these results in less than 3 months with applied marketing analytics and a 360° view of their customers.

As we face the fiscal cliff, these are all changes that can make a difference in how your organization weathers the storm. Embrace marketing analytics and the improvements can have a big impact across your organization. Let me close with a final suggestion - take a look at this article on MarketingProfs:  Six Tips for Creating an Analytics-Driven Marketing Culture. The article was submitted by our VP of Marketing, Adele Sweetwood, and she provides the six practical tips from how SAS has implemented a marketing analytics culture. 

In any situation, it's important to know all the variables that are within your control, and all of these suggestions are within reach and are proven approaches. Let us know if you're ready to get started. Until then, I welcome any and all comments and I always appreciate your sharing my posts with others or simply following this blog.

tags: analytics, customer analytics, customer segmentation, driving profitable growth, marketing optimization, relevance
11月 222012
 

As previously mentioned, I attended this year's DMA Annual Conference as a sponsor and found many ways that it was a wonderful experience as both a sponsor and an attendee. That said, there actually was one part of my DMA experience that gave me pause enough to want to share it and get your reactions. It's the mail avalanche.

The picture above shows all the direct mail pieces I received before the show (45) and after the show (8) that had some sort of call to action, usually "stop by our booth." It was clearly a waste for the 8 unfortunate companies whose mailers arrived at my mailbox after the show. But it's the 45 mailers that I received before the show that have me wondering, too.

Don't get me wrong - I have nothing against mailers. I used to own a direct mail agency after all, but it's the fact that 53 of these companies felt compelled to reach out to me with a message and so few of them were relevant to me. One of these was actually a book about radio advertising - in the picture above it's 4th from the left along the bottom with the cover letter under it.

I wish all show organizers let the attendees provide enough detail about their interests so they could facilitate (require?) that any pre-show touches be only to the people who self-identify as interested in your topic. Could they have attendees build a personalized agenda by selecting sessions to attend, and from that data they infer the topics of interest that can help the sponsors and exhibitors target more meaningfully? Whatever the case, there has to be a better way than the mail avalanche that's largely wasted.

Take that example to a broader level, and it illustrates how wasteful bad targeting can be. It's not only wasteful, but irritating to your customers, so it costs you dearly in lost revenue. When your business gets any more complicated than a mom-and-pop shop, that's when customer analytics can improve your marketing - better targeting, more relevance, less reliance on the avalanche or "spray and pray" to get the kind of sales volume you need. The answers are in your data.

On a separate but related note that I'm including because it's funny, one other example of "just because you can doesn't mean you should" came in the form of a roadside banner outside a rug store on the way to the beach in South Carolina. In this case, it involved a rhyme that may have seemed catchy to the store owner, but nothing about it made me want to stop and browse. My daughter took the picture below once she and her friends stopped laughing about it (they laughed a long time).

 

Please share your thoughts about the tradeshow mail avalanche, and the unfortunate rug-store rhyme. Share any other examples of "just because you can it doesn't mean you should." I'm sure the list is quite long...

tags: customer analytics, customer segmentation, relevance
11月 102012
 

Understanding the customer is more and more complex with each passing every day, especially due to the ever-increasing amoung of customer data - generating what is commonly known as "Big Data." Adding to the complexity is all the unstructured data from social media, which happens to be highly relevant to understanding the customer.  So in this environment, it is increasingly difficult for organizations to reliably make faster decisions in predicting customer retention, attrition, and return rates. 

How do we make sense and sort out this rapidly changing and increasing complex customer dynamic? How do we determine the best marketing offer to make using fact-based decision making rather than making decisions by intuition or gut feel using little or no data to back up our decisions?  What technologies need to be pursued to maximize gaining the most customer insight in the social age?

I found some great answers to those questions in a best practices report from TDWI exploring this very subject in great detail. TDWI examined organizations’ current practices and future plans for customer analytics technology implementations, with a special focus on how organizations are adapting to both the data opportunities and challenges of social media networks.

From the many strategies laid out in the report, two strategies stood out above the rest for me:

  1. Use social media analytics to support an active, not passive, social media strategy.

    Gone are the days when organizatons could be passive with social media by just listening and analyzing social data at a basic level. Social media has matured to the point that it's no longer enough to simply measure success by the number of "likes," and instead marketers need to see all the ways the customer interacts with the organization as opportunities for positive engagement, as well as opportunities for new insights.A key source of insights is Social media analytics, used by leading organizations today to derive richer customer insights, therefore enabling their strategy development to be forward-looking in ways that are more relevant and more satisfying for the customer.
  2. Evaluate and implement specialized analytic database technologies for customer analytics. 

The speed and depth for analyzing big data information using customer analytics is enabled by technologies such as columnar databases and Hadoop/MapReduce. In a big data environment, the biggest challenge can be simply filtering out the noise, and sometimes all the trends, patterns, and other insights are lost due to aggregation and filtering of the data. 

The need to analyze raw, detailed data is a major driver behind the implementation of Hadoop.  Hadoop puts all kinds of data (structured, unstructured and semi-structured) together in its pure form, rather than in a more structured data warehouse environment. This allows organizations to gain an integrated view of complex customer behavioral data that is usually separated into incompatible silos and makes it ready for customer analysis.  Hadoop is an attractive technology being inherently scalable that runs on commodity shared-nothing clusters that cost less than licensing systems from the big database companies.

The title of this report is Customer Analytics in the Age of Social Media. The report is pretty comprehensive in that it presents insights from an extensive research survey as well as interviews with users and industry specialists in customer analytics, social media analytics, marketing, and customer intelligence. I recommend it and encourage you to download it.

I welcome your thoughts and ideas by commenting below and thank you for following!

tags: customer analytics, social media, social media analytics
9月 302012
 

The phrase “Content is King” may not be new, but it certainly has enduring relevance in our digital world where so much of our lives are experienced online and increasingly shared online. In fact, the very essence of social media is found in the ways we create content, share it, comment on it, or simply “like” it (in the new “active” sense of that word). The advent of social media and the growing importance of inbound marketing and internet search in general means that not only is content still king, the empire has grown. A lot.

As a result of these developments, our company (like many others) actively engages in content management, and we’re employing a new content management system (CMS) as a way to help us stay relevant with the communities we engage with. And while the CMS will provide us with many benefits, an equally important process is to enable the ongoing evolution of our marketers with exposure to new perspectives and best practices from thought leaders.

One such opportunity presented itself recently with a visit to SAS by Robert Rose, author of “Managing Content Marketing,” a book billed as a “real-world guide for creating passionate subscribers to your brand.” What we learned from Robert is that good, compelling content is very simply one that tells a story.  And while all stories do not begin with “once upon a time,” that’s a better start than a bulleted list of your product’s features quite simply because your bulleted list may be factual, but is it interesting?

Being interesting is easier said than done, but well worth the effort. In my view, being interesting is 50% of being relevant. The other 50% of relevance is utility, so relevance is earned when you can provide content that is both useful and interesting – not one or the other.

Robert presented the challenge of rising above the noise of today’s digital world, in which the typical person consumes information 11 hours per day. Considering the ideal of 8 hours of sleep and some 2-3 hours in transit, eating and engaging in other “daily maintenance” activities, that leaves little time for other engagements. In that context, it’s easy to understand how content presented as a story is effective because first it captivates the audience, and then it engages on an emotional level.

A story resonates in a way that matters to the intended audience, which makes it interesting.
The fact that it's interesting makes it memorable, which greatly increases its utility.

Robert's presentation capitvated me because he presented it as a series of stories - really. That said, here are the 3 biggest content marketing take-aways for marketers that I got from Robert's stories:

Be mindful of who you're talking to
This is as basic as it gets - for marketers and all communicators. Your audience has its own vibe, rhythm and even language. So if you want your story to matter, start by considering who you're talking to and also what they care about and be mindful that it's about them - not you. For big audiences, there's nothing better than customer analytics to get the story from the data capturing their behaviors and buying patterns. For simpler, everyday situations, it's simply a matter of paying attention to your audience over a long period of time and "learning their lingo."

Remember what business you're in
Robert shared that Theodore Levitt, legendary strategist and Editor of Harvard Business Review, once posited in his paper, "Marketing Myopia," that the [passenger] railroad industry declined because they defined themselves narrowly as being in the "railroad business" (a product-centric view) instead of being in the "transportation business" (a customer-centric view). As a result, we might think differently about railroads today had they not remained constrained by the inherent limitations of two parallel rails.

A more strategic view that was focused on the need for people to move themselves and their goods might have resulted in a much different passenger rail system today.  It would have fostered easier interconnections and synergies with airlines, water transport systems and automobile-based transportation . My interpretation from that example gets to the core of solid brand management. It all works well when you tell your customer that you'll provide something that they want/need, and then you follow through by providing it. The bottom line is that it all begins and ends with the customer.

Get to the underlying reasons
For effective storytelling, it's critical to stop and think about "why." Robert cited Simon Sinek's thoughts from his book, "Start with Why," and he zeroed in on how important it is for the story to address the underlying question "why." And not simply asking the question once, but asking "why" over and over again with the dogged tenacity of a toddler until you get to the core where the emotions live. It might take 2, 3, 4 or even more "why's" before you get to the real story. Once you're there, that should guide how you communicate.  Robert illustrated his point by contrasting the difference between a mere plot with a story:

Plot:    It tells us what happened. "The king, queen and prince all died."
Story: It tells us why it happened. "The king, queen and prince all died of heartbreaking grief."

Having read those two statements, I imagine the story has you speculating about the situation, and that's the point. "Why" is critical to the story, and it's the core reason why the story is memorable, and it's why storytellling is effective content marketing.

It all  comes down to the idea that a story is a problem that must be solved. And people LOVE to solve problems - especially their own problems or ones that they can relate to. In good content marketing, the brand message communicates the problem's solution (the value proposition) at the highest level. And  then the story is consistent with the brand in ways that explain the value proposition, with product messaging translating the story to a granular, practical level in ways that demonstate how to benefit from the value proposition. It's why the story reigns as queen in the kingdom of content (you don't need to ask who's really the boss in the castle).

I'll end by sharing this short video that tells the SAS story in under 3 minutes - a great story that engages the viewer emotionally. The video describes the impact of our tagline, "The Power to Know," and it also speaks eloquently to the many reasons why I love working at a company that makes a difference every day.  So that's my story.

As always, thank you for following and let me know what you think.

 

tags: branding, content marketing, customer analytics, search marketing, social media
9月 222012
 

Hi everyone! I am Jim Hiepler-Hartwig, the newest member of the SAS Customer Intelligence marketing team, and I am happy to be a new contributor to this blog. In previous roles, I've held positions in both sales and marketing, and much of my focus in the last few years has been on manufacturing and consumer packaged goods. My hope is that I can bring some of those experiences to bear on the perspectives I'll share in my posts where I'll explore what's on the minds of enterprise marketers today.

In the last few months, I’ve been working on the sponsorship of a CMO series with Argyle Executive Forum, which brings together senior marketing executives from very large companies for thought leadership sessions in various cities.  I've had a chance to attend the forums in San Francisco, Seattle, and Chicago, which put me in a great position to listen and learn about what's on the mind of CMOs today in these great cities. It's been fascinating, especially since some recurring themes have emerged related to both the challenges and successses of today's CMO's. What I've heard can be distilled into 3 key qualities for the evolving role of the CMO:

Be a change agent
Today's CMO needs to be comfortable at driving change among his/her peers in the C-suite and throughout the enterprise.  This is a marketing imperative because change has become a constant for companies of any size in any industry.  In order to drive change, the effective CMO should be willing to take risks, and be innovative in leading the enterprise to operating with the customer in mind, or risk leading the organization to a place among fallen stars, such as Kodak, Circuit City, or Blockbuster

Be in lock-step with the CIO
Today's CMO must be comfortable with technology almost to the point of being as knowledgeable as the CIO. The world of the customer is digital, online and social - generating mountains of data points for marketers that are just begging to be made sense of. And in a time of increasing need to demonstrate accountability and ROI, it's never been more important to use customer analytics to find the answers in the data. So for for gaining the necessary insight to be a responsible steward of strategy, today's CMO needs to be in lock-step with the CIO.

Heed the customer
The same factors driving the CMO-CIO partnership are what's changing the dynamics of how to heed the customer, or in more modern terms - manage the customer experience. Today's customers are not only interacting with your organization across multiple channels, they have an expectation that you know them intimately across all the channels. They engage you on the phone, in person, online and sometimes on multiple channels simultaneously. Then they influence your brand with social interactions across multiple platforms. Heeding the customer has always been central to marketing effectiveness, but never more so than in today's digital-social world.

Some of these same themes have been nicely laid out by my colleague and fellow blogger, Wilson Raj.  He recently spoke to Argyle about this very topic.  His view is that the CMO needs to become a business-driver in terms of now looking at marketing as a profitable growth engine and as a competitive advantage, and not just a communication vehicle.  Another factor is how the CMO is dealing with the proliferation of data (massive amounts of structured and unstructured data) and how they are hoping to gain customer insights tying both together.

If you're interested in more detail, click here to read a document by Argyle that summarizes his views. In the meantime, please share your thoughts and ideas with a comment below and thank you for following! You'll be hearing more from me over the next few months on this and other marketing topics.

Thank you for following and leave a comment to let me know what you think.

tags: CMO, customer analytics, driving profitable growth, events, relevance
9月 082012
 

We're working on a project with a retail industry thought leadership organization called Retail Systems Research (RSR for short).  My colleague, Wilson Raj, is working with RSR Managing Partner Nikki Baird to explore how data-driven customer centricity holds the key to successful omni-channel retailing.

Omni-channel retailing is a concept that applies to any company that conducts online transactions with its customers. One of the biggest reasons why omni-channel retailing is a hot topic is that customers today expect a seamless, consistent experience across all channels. They want you to manage and integrate all their big data and they get an immersive experience - regardless of the channel where they found you.  Sound familiar? As a result, retailers today have to stay focused on the customer in ways that are not only consistent but accurate. In this era of big data, that's a tall order to fill. Customer centricity is not an option - it's required. So what to do?

Fortunately, the challenge of big data is also an opportunity. Forward-thinking retailers are using customer analytics to gain insights from both the digital and the physical selling worlds. The result is that they gain an informed business strategy centered on the customer. By using actual transactional, behavioral, social and other data, retailers can align their strategy with the customer’s expectation of one seamless experience across all channels. The answers are already in the customer data to pin-point the best opportunities, map out the best marketing actions and then maximize cross-business impact.

Want to learn more? Why don't you join us on Sept. 18 at 1:00pm for an online chat with Wilson and Nikki. Click here to sign up.

As always, thank you for following and leave a comment to let me know what you think.

tags: big data, customer analytics, Multichannel Marketing, retail
8月 132012
 

A weekly ritual at our house is to pore over the local Sunday newspaper print edition and drink big mugs of strong coffee. My wife and I take different sections, we discuss various items that strike us along the way, and we can often have the world's problems solved by noon. It's very productive, if not entertaining.

Sometimes we'll come across a news item that is so unsurprising that we get a good chuckle and try to imagine the poor newbie who was tasked with writing the article that shocks nobody. Today's Raleigh News & Observer included an item from the weekend Wall Street Journal that briefly inspired a chuckle until we remembered how close to home it hit with us. The title tells it all: "More Television Viewers Taking an Ax to Cable," a reference to cable television" (CATV).

There are many reasons why that news is unsurprising, not the least of which is due to the variety of free programming on the Internet now competing for the attention of anyone with Internet access. At the same time, it seems that both the CATV and the telecommunications network (telco) operators that compete with them often treat their customers as if it were still the 1980s and they have monopoly rights to operate in defined geographic areas.

Deregulation, technological progress and competition have radically changed the rules since the 1980s for CATV and telco businesses. And while they are making changes, they're going about it slowly and inconsistently. By contrast, customer mindsets and expectations have evolved quickly and people now have the ability to share their experiences via social media, which may add to the challenges for companies that don't enjoy strong customer loyalty.

If you want proof, just ask your neighbors if they've done away with their home phone or CATV service, or ask for feedback via social media. You'll get an earful either way and quickly understand why it's not surprising that people are turning their service off. And while the attrition rate cited in the Wall Street Journal article amounts to 0.2% of the combined industries' customers, it's a net loss of customers across the industry in just one quarter. Ouch! That should be a wake up call.

So are the CATV and telco operators listening? I can't really tell, but from the way they treat me as a customer, it certainly doesn't seem that way. Here's what we've experienced in the last three years at our house:

  • We opted for our CATV operator's "triple play" offering a few years back with a two year contract. When our contract ended, we had no choice but a 15% increase in our rates for the privilege of remaining their customer.
  • When we switched to a satellite-based TV provider, the installer tried to convince us that we could only get a signal from the low roof line directly outside my daughter's window or next to our driveway in front of the house. We only got the service by insisting they put the dish on the highest part of the roof, which involved a week's delay and escalation to a manager to approve the extra-long ladder.
  • And last month we got a flyer on our front door from the CATV operator promising "No contract - big savings!" Really? We didn't believe it. Did we call? No.
  • We now have "triple play" from our local telco. They helped us with one-time discounts to pay the early termination fee from the satellite provider, but it's not appreciably different than the other two services.
  • In all three cases, they package the TV channels in a way that we are forced to receive dozens of channels we don't want and never watch in order to get the few that we do. It sort of reminds me of the old days when a great band put out a new single and I had to buy the whole album to enjoy my new favorite song. Meh.

And none of these companies have inspired our loyalty, so we'll probably keep switching to get the best deal as long as they keep up their current practices. Or until we just get tired of the hassle. At this point, we've not tired of the hassle enough to leave altogether, but according to the Wall Street Journal, more and more people certainly have had enough.

What's tragic is that there's a good fix for the problem - it's called customer analytics. There are details in customer data that can explain trends, enable accurate projections and give all sorts of insights. All these companies have the data, and they just need to understand what it's telling them. And as an alumnus of the heavily-regulated telco industry, I know many business practices are regulatory requirements, but I also know that many of them are certainly not mandated and simply may have evolved into standard practice. Not a good excuse.

By contrast, one of my favorite examples of how a company created value with a 360-degree view of the customer is from a regulated telco. In this case, Verizon used customer analytics to transform customer relationships and generate triple-digit growth during a deep recession. Regulated or not, it's always a good idea to pay attention to your customers, and the Verizon case shows just how good an idea it can be. The key is to translate the understandings into offerings and engagement the customer values and wants. That kind of engagement over the long term can help a company remain relevant through changes in regulation, changes in technology or both.

Just imagine if our CATV provider had offered us a 15% decrease in our monthly rate to reward our loyalty. We'd probably still be their customer, and they might have found us more inclined to let our teenage daughter order up some of the pay-per-view movies she's always asking about. And we might also let our almost-teenage son look at any games or interactive offerings they could entice us with. But none of that's going to happen because they frustrated and angered us - and I know very well we don't stand alone. And now they will have to show us much more love than a 15% discount if they really want our business again.

Customer analytics can help any organization more complex than a mom-and-pop operation know more about their customers.  And knowing your customer is fundamentally important and always worth the effort - perhaps especially for regulated companies.

That's how I see it. What do you think?

tags: customer analytics, customer loyalty, regulation
7月 212012
 

For those that didn’t study Latin or law, caveat emptor quite simply means “buyer beware”.

David Reibstein, the William Stewart Woodside Professor, Professor of Marketing at Wharton Business School and author of “Marketing Metrics: 50+ Measures Every Manager Should Master” says that marketers chase growth, but few get very specific about what type of growth.

In David’s mind, it has to be profitable growth.  Organizations chase revenue with an expectation that it will turn to profit.  But the markets will only reward them if they believe they have a vision for how that will happen.

Some may do it by acquiring other companies. Others will focus on organic growth. But if you are a CMO (Chief Marketing Officer) and want to survive longer than the typical 2 year stint, your focus needs to switch to understanding Customer Life Time Value.

David Reibstein, Professor of Marketing at Wharton Business School

Check out what David had to say on:

  • Revenue versus Profit
  • Impact of influence on Customer Life Time Value
  • His thoughts on loss leaders and coupons as part of your marketing strategy

Want to learn more?

Visit the driving profitable growth site on our Customer Intelligence Knowledge Exchange.

tags: customer analytics, customer intelligence, customer value, driving profitable growth, Profitability
6月 252012
 

The Supreme Court of the United States is set to reveal its ruling on the landmark health care legislation known as the Affordable Care Act. Much angst has resulted from this law and many parties that feel obliged to support or criticize the law have prepared statements, and in some cases, multiple statements so they could have something prepared no matter the outcome.

While health care providers and health insurance plans are most directly affected by the law and the question of whether or not it can be implemented, the law actually has wide-reaching implications across industries. The main reason is that employer-based health insurance benefits are a major cost for almost any company with employees, and they are also significantly beneficial for those fortunate to receive such benefits.  In addition, health care spending as a proportion of GDP in the United States is estimated to be greater than 17%, and is growing at 8% per year.

The health care reform debate in one way or another has been a source of uncertainty for business for at least twenty years.  It has gotten to the point where the old maxim rings true that the one constant is that there will be change. And it seems at times that everyone has an opinion on the matter, and each opinion is different for any number of reasons.

I heard one considered view on health care reform this past May at the 9th Annual SAS Health Care and Life Sciences Executive Conference that I think bears repeating.  Dr. Donald Berwick participated in the event as a keynote speaker, bringing his perspective as a long-term proponent of patient-centric health care. He spoke eloquently about the need to focus on finding innovation and scaling it to drive overall cost containment, and he laid out his five-part prescription for reforming the U.S. health care system that not surprisingly begins with the patient:

  1. Put patients first.
  2. Protect the disadvantaged.
  3. Get to scale – reform needs to happen in regions and states
  4. Return the money – find health care that works and funnel the savings back into the system.
  5. Act locally.

Each one of those points could be explored in great detail, and while I have opinions on some of them, I don’t feel qualified to address the last four points. That first point about the patient, however, is a different matter.

I can certainly understand the thinking about putting patients first, but I think it might be equally transformative to put the patient first and also to treat them like a customer.  Our current health care system has the individual sometimes referred to as a “patient,” and sometimes as a “member.” Often, interactions with the customer are limited to times when they need care of some sort, when a payment is needed, or when a regulatory requirement compels the interaction. Might it not effect change to engage with your customers when they are well as much as when they are not well? I would think so. As it stands, the individual is seldom treated as a customer in health care, and he is even more rarely referred to that way.  And yet the individual (“customer”) is the one constant in the swirling winds of reform and change.

I understand that health care providers and health insurance plans are constrained by multiple overlapping regulations, but other heavily-regulated industries, such as telecommunications and energy, can serve as examples of how to engage with customers positively in heavily regulated enviroments. These stories also demonstrate how customer analytics can enable positive business results by driving a customer-centric way of operating.

Whether or not the Supreme Court upholds all or portions of the Affordable Healthcare Act, I am ready to start feeling like my health care providers and my insurer care about me as a customer as much as they care for me as a patient/member. It’s a different kind of caring. And I will say this much – there are many ways in which I already approach my health care needs as a consumer. I certainly exercise informed choices when they are presented to me, and I am equally willing to praise you or pan you publicly in social media. So how about it – can I be your customer?

tags: customer analytics, health care, regulation, social media