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Amy Modini

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CMB Researcher in Residence: UPMC Health Plan's Jim Villella

Posted by Amy Modini

Tue, Apr 26, 2016

jim_upmc2.pngUniversity of Pittsburgh Medical Center Health Plan’s Director of Market Intelligence, Jim Villella, sat down with CMB’s Amy Modini to discuss the role of insights and market research at UPMC and the health insurance industry at large.

AM: Tell us a bit about your role as Director of Market Intelligence at University of Pittsburgh Medical Center (UPMC) Health Plan.

JV: I oversee all external and internal intelligence within the health insurance industry in our market. Our Insurance Services Division (ISD) includes a lot more than just health insurance. Within the ISD, there are health insurance products as well as a suite of workplace productivity solutions under the WorkPartners brand.  WorkPartners offers worker’s compensation insurance, employee assistance programs, wellness programs, and some business productivity solutions, such as FMLA and short-term disability. Primary research is obviously one of the services that my team offers to all of UPMC ISD. This research is often an assessment of where we are compared to our competitors as well as opinions and attitudes of our current members. We also manage our marketing relational database, which is built at the consumer and employer level, so that we can do targeted marketing campaigns. Overall, it’s a pretty broad list of responsibilities.

AM: It certainly is! As we know, it’s been a disruptive few years for the healthcare industry. Looking ahead, what challenges and opportunities do you see coming?

JV: One of the biggest challenges for many health insurance companies who don’t have a large direct-to-consumer business sector is the end of the extension of the allowance for small groups under 50 to keep the plans they had prior to the implementation of the ACA. When the allowance goes away in 2017, those groups are going to have to move to community-rated insurance plans. Many of those groups will have to evaluate their situation when rates change in 2018, so that’s a challenge that insurers will face: transitioning what happens with those groups. The insurance companies will have to meet that challenge and ensure that they continue to insure those same people, whether it’s through a group or through the individual process. 

There are a lot of constraints on insurance companies with the Affordable Care Act (ACA). There are limitations on profitability and also on mitigating risk, so it’s a little bit harder to make a profit. And, as you can see in some markets, some of the more profit-driven public entities have chosen to take themselves out of the individual market in many areas because they’re finding it hard to have a viable business model in the current environment. There’s a lot of uncertainty in the market about who’s going to be there to provide the insurance solutions that are part of the ACA. 

AM: Do you think being part of an integrated system puts UPMC in a different position than other carriers that are just health insurance companies?

JV: Yes, I do. Because we’re an integrated delivery system, we have a lot more dialogue between the provider and the payer, which gives us more opportunities to intervene and identify solutions that will help people get better and stay healthy. Different payment models also emerge out of this position, which allows us to move away from a situation in which someone is paying providers for a service and move toward compensating them based on the effectiveness of the care. That’s much easier to do in an integrated system where we have direct relationships with a big portion of our provider-base. 

AM: What role do you believe healthcare insights, in particular, could play with some of the challenges and changes in the industry you mentioned?

JV: At the end of the day, much of what we deliver in the insurance business is somewhat commoditized. You have to offer things, in addition to paying claims and providing access to doctors and hospitals that members want, so that they remain with you when they have the opportunity to evaluate options in open enrollment periods. Research helps us immensely in identifying those unmet needs or identifying how well we can meet their needs that go beyond the basics of health insurance. 

Carriers have to move toward having one-on-one relationships between themselves and the individuals that they cover. In the past, carriers have had more of a relationship with a group that covers hundreds or thousands of people at a time, so the model is narrowing to an individual-level, much like auto insurance. You don’t really have employer-sponsored auto insurance. Every one of those carriers is dealing with each individual person one at a time, and that’s what the future of health insurance appears to be moving rapidly toward. The employer model is still the foundation for most U.S. health care, but if the health insurance exchanges continue to be successful and maintain competition and lower premiums—depending on who’s elected—it could continue to become more of an accepted way for Americans to obtain health insurance. 

AM: Let’s shift gears a little bit. Let’s talk about the market share analysis work we’ve done with you over the past couple of years. Can you talk a little bit about this work, and why it’s so important now?

JV: The rapid change in market share, year over year, is something we need to assess as quickly as possible, and the secondary sources we rely on to give us our definitive market share take several months to report. So, when we want to know in January what the market share shift has been, waiting for our secondary sources until July is simply too long. We partner with CMB so we can get a very quick, but accurate, assessment of how much the share has changed. The change in market share used to move at a glacial pace, but now it changes several percentage points for some carriers in a single year. We need to know about those changes as quickly as possible. We also use that study to assess perceptions and opinions of brands as well as what’s important to decision-makers, which helps us do some strategic planning for marketing purposes. 

AM: You’ve already touched on this a little bit, but how does this work play into your larger insights strategy?

JV: It helps us position ourselves and try to identify which areas of the geography we’re in that we could potentially focus on more. We get a more robust view of that at the county level from our secondary source in July. If we were to find opportunities or weaknesses in that share data—such as gaining or losing to a particular carrier in a particular region—we could react to that. It also helps us understand where the national competitors have gained traction—which ones are winning out and where. We need to be able to respond and understand who our competitors are as quickly as possible. 

AM: As you think about the next challenges for your organization, tell us what you look for in an insights partner.

JV: Several things:

  • Experience with our industry is helpful if not essential. Health insurance is a very complicated industry. I think it’s very difficult to partner with a research vendor that has no familiarity with the business. Even the terminology is difficult, so it would be hard to have to explain things about the industry over and over again.
  • A partner that does independent preparation and doesn’t rely exclusively on us to provide everything because they’ve done their homework.
  • Good problem-solving skills. Marketing and market research is basically just problem solving, and that manifests itself in even trying to design a research study. We need a partner that’s constantly asking: what’s the best way to do this?
  • Creative sample design. We sometimes have difficulty reaching certain audiences because we’re limited by our geographic footprint in western PA. So, finding a partner that can suggest alternatives for reliable ways of getting the same level of information is a huge component of what we need in a partner.
  • Visual interpretation of data is another one. That’s an art and a science, and partners who know how to show you information in a visual way are extremely helpful because that’s usually how it gets delivered to senior management, which is much easier to access than large, detailed crosstabs. 

These are all things we have working with you, and of course, we’ve had many years working together, so you know us very well and that familiarity is very helpful.

Got a market research question that you're just dying to have answered? Ask our Chief Methodologist and VP of Advanced Analytics, and he might tackle your question in his next blog!

Ask Dr. Jay! 

Topics: healthcare research, health insurance research, Researchers in Residence

Stitch Fix's Fixation on the Customer Experience

Posted by Amy Modini

Wed, Nov 05, 2014

iStock 000004343641SmallHow many of you are always looking for another minute in the day? Or perhaps some of you want something new, but don’t have time to get to a store? And how many others of you just simply hate going to brick and mortar stores? Stitch Fix, an online personal shopping stylist, is a service in which you set up a profile and pay a $20 styling fee to have five items shipped to your door. The styling fee is applied to the items you keep, and anything you don’t want has to be sent back within three days (in the pre-paid postage package provided). The service appeals to those busy women needing convenience. 

I ordered my first “fix” last December and loved it. Like the 70% of customers, I returned for a second time. Not only is this service convenient (after setting up your profile, you literally click a button to order your next fix and select a date), but it offers fairly reasonable prices. I get excited every time Stitch Fix sends me a box, and that excitement quickly accelerates or disappears after I see what’s inside. While I loved every piece in my first fix, I’ve since had mixed results, loving and hating certain pieces.

Since launching in 2011, Stitch Fix has done several things right as it continues to build its brand and enhance the customer experience. Here are a few:

1. Knowing the target audience.  

Stitch Fix does this well. Even though the company states that its customers range from teenagers to senior citizens, it realizes that busy women in their late twenties to thirties are its primary audience. This is why convenience is at the company’s core. For busy women, the experience needs to be quick, easy, and stress-free, and Stitch Fix has been able to do just that. The company is also appealing to those women who take fashion risks, dislike brick and mortar shopping, look for the latest and greatest trends, and are perhaps less price sensitive than others. 

2. Leveraging word of mouth and building advocates.  

An integral part of this service is its referral code system. The referral codes allow customers to earn $25 toward another fix if a friend uses the referral code for her first fix. I have seen countless friends post about Stitch Fix online. Even I have told some friends about the service—especially when I receive a compliment on one of my Stitch Fix pieces—so it doesn’t surprise me that word of mouth referrals account for 95% of Stitch Fix’s new customers.

3. Listening customers and making adjustments.

Several months ago, Stich Fix began to get a lot of publicity. Thus, demand increased and wait times became significantly longer. The company quickly realized that this resulted in a not-so-positive customer experience, so it expanded its team of stylists and shipment centers, which ultimately reduced wait times. Stitch Fix’s goal is to provide the best possible “fix” for each customer, so it continues to encourage customers to communicate through a variety of ways such as writing notes to stylists, setting up a Pinterest board to show pieces you like, and sending specific feedback on the clothing pieces you receive.

It’s not difficult to see that Stitch Fix has no shortage of data to analyze or algorithms to apply when determining which pieces customers will enjoy, but it doesn’t rely solely on the data. It takes the data and combines it with the expertise of a stylist. In the market research world, I see this as the delicate blend of art and science.

It’s been a few months since I’ve gotten a fix, and with the season change, it’s about time I click that button to order my next one! 

Amy is an Account Director and a mother of two small kids, which makes her an ideal target for this service. She’s willing to give her Stitch Fix referral code to anyone who wants to try it.

New Webinar: The New Hotel Path to Purchase: The Mobile, Social, and Online Journey – As part of CMB’s Consumer Pulse program, we asked 2,000 leisure travelers to share their journey from awareness to booking. This webinar will give insight into the role of mobile, apps, customer reviews, and social media. 

Watch Now!

Topics: marketing strategy, customer experience and loyalty, retail research

WEBINAR: Using Discrete Choice to Better Position your Brand in a Complex Market

Posted by Amy Modini

Thu, Feb 20, 2014

CMB webinarsPlease join CMB's Amy Modini and UPMC's Jim Villella today at 12:30pm ET for our latest webinar: Using discrete choice to better position your brand in a complex changing market

Is your industry evolving?  In this webinar you'll learn how UPMC and CMB applied a discrete choice methodology, accounting for various factors to estimate shifting consumer preferences, make key product development and marketing strategy decisions, and ultimately position UPMC for success.

The health insurance industry faces an urgent need to prepare for a new competitive market introduced by healthcare reform. UPMC recognized the opportunity to gain competitive strength in the market through innovation and new product development. However, the research supporting these decisions would need to account for a wide range of market changes and influences. To apply a trade-off exercise UPMC needed to address many challenges, including:

  • New shopping and purchase channels

  • Controlling the effect of discounts and subsidies on price

  • Introduction of entirely new consumer segments for whom purchase behavior is unknown

  • Product optimization for multi-tier offerings

Register here

Did you miss one? All of our webinars are available here

Topics: healthcare research, webinar, brand health and positioning

CMB Webinar 7/25: Creating Brand-Building Customer Experiences

Posted by Amy Modini

Tue, Jul 23, 2013

What do Crayola, Amazon, Cheerios, Apple, and Subway have in common?

Brand building CMB

Over the years they’ve each been named one of America’s most loved brands. Of course there are lots of strong brands (nearly as many as there are “most loved brands” lists) but what is it that makes those brands so strong? No one will deny the importance of the brand name, positioning, or communications, but what these beloved brands have in common is how they deliver their brand experience.When M3 Insurance, Wisconsin’s largest privately held provider of commercial insurance, decided they wanted to strengthen their brand position, they had a few options. One common approach is to invest time and money into a brand’s value proposition and the brand promises they’re making to their customers. A company that takes this approach will spend a lot of time building enthusiasm and energy around a brand position, both internally and externally.  They might have banners, posters, and many companywide meetings to communicate the brand to employees.

There’s a lot of good stuff in this traditional approach, but our experience tells us that it rarely, if ever, goes far enough. Brands that stand out are able to find ways that empower their employees to make decisions that support the brand.  They’re able to articulate how employees can/should act to deliver on the brand promises and benefits—they use each interaction with their customers as a chance to deliver brand value—something even the best company-wide meetings can’t inspire alone.

With M3, our approach was both practical and comprehensive. At center, was the need to ensure customers’ experience aligned with M3’s brand promise. Guided by that core principle we developed a plan to determine how (customer facing) employees should behave to deliver the brand promise. Want to learn how we did it? Join M3’s Traci Mandell and me this Thursday to learn a new approach to developing and measuring truly brand-building customer experiences.

Click here to register.

Posted by Amy Modini. Amy is Account Director for CMB’s Healthcare and Insurance Practice, when she gets the time she loves going to the beach with her two kids.

Topics: insurance research, webinar, brand health and positioning, customer experience and loyalty

Key Questions for Insurers in Wake of Supreme Court Decision

Posted by Amy Modini

Mon, Jul 02, 2012

Obamacare and health insurersAlong with millions of Americans-patients,doctors,lawyers and, politicians-health insurers also waited with bated breath for last week's Supreme Court’s ruling on health reform. Now that the Supreme Court has upheld the basic provisions of the law, health insurers face the challenge of understanding how traditional markets will be impacted by the individual mandate and implementation of health insurance exchanges.  

Even with the ruling, there is still much that remains unknown about the law’s impact, and significant uncertainty about how the law will be enforced in each state.  But there are still critical questions insurers must consider now as they adapt to a new era in health reform, including:
  • How will this ruling and the establishment of exchanges impact company revenue and profitability?  Are there ways to take advantage of this ruling and increase company margins and revenues?

  • How do we compete effectively in an open exchange?  If price is the key criteria to consumer decision making, is there a way to minimize its influence and yet be successful?

  • Is there a need to re-examine the existing client base beyond the traditional demographics? Will an alternate classification help create a competitive advantage?

  • How do we move beyond the traditional employer sponsored channel?  How can we take advantage of technological shifts?

  • How relevant is the present communication strategy? Is there an opportunity to approach the future in a new, cohesive way that complements the product and distribution strategy?

Addressing these questions and mitigating the coming challenges will not be easy; surviving and flourishing in a changing market requires a truly new and innovative approach. We believe insurers must:

  • Reconsider how they approach product development – the insurers who will be successful in this new reality will be those who are able and willing to stretch boundaries of what insurance products look like to meet the needs of the customers, including offering supplemental insurance, wellness programs, incentives and monetary gains for meeting health goals, etc.

  • Go beyond traditional ways of looking at the market – motivations, attitudes, goals, and behaviors will become as, if not more, important to understanding and effectively messaging to insurance customers. Alternate classification of consumers could help insurance companies underwrite consumers in a more effective and efficient manner.  This could be especially advantageous for smaller insurance companies that cannot compete solely on price; perhaps it is time to start looking at a niche strategy. For a more detailed look at alternative market segmentation for health insurance, read our white paper: A New Approach to Segmentation for the Changing Insurance Industry.

  • Embrace the leaps in technology – insurers must explore the possibility of reaching consumers directly (internet, smartphone, etc.), and simplifying the purchasing process.  A simple product lineup with an easy buying process can go a long way in increasing an insurer’s favorability rating.

  • Consider a new messaging strategy – the health industry’s transition is a great time to consider resetting the existing image. Great products and great service need great messaging.  What are the goals people are trying to achieve? What is it that truly motivates them? What is it that truly sets us apart and does it add value to our customers’ lives? Is there a need to have specific messages to specific groups of consumers? Think about the answers to these questions. Insurers in the end must be able to convince consumers that they are partners in this journey and are mutually dependent on each other’s success.

Amidst all the uncertainty insurers are facing, we believe that to mitigate the uncertainties of the reform landscape, insurers will have to go back to the drawing board, rethink how they look at the market, engage in product development and address the fundamental goals of their customers. Insurers must recognize and leverage core capabilities that others cannot replicate. Competitive advantages stem from not one but from a series of strategic decisions. The correct mix of product, distribution, message and market coupled with inherent operational strengths (e.g., knowledge of a local market, ability to underwrite at low costs,  relationships with existing customers) can set insurers apart from competition and pave the way to long term success.

Posted by Amy Modini. Amy is an Account Director for CMB’s Healthcare Practice, when she gets the time she loves going to the beach with her two kids.

Topics: healthcare research, product development, health insurance research, market strategy and segmentation

Will Others Follow Walgreens?

Posted by Amy Modini

Mon, Aug 01, 2011

I heard great things about the Shopper Insights conference in Chicago a few weeks ago. While I couldn’t attend, others from CMB said the conference had a great vibe, and was filled with excitement and information about the latest trends in the shopping experience. One of the major takeaways was that the combination of customers’ shopping preferences and new technologies continues to drive change in the retail shopping experience.  We’ve seen this first hand in our Consumer Pulse detailing how smartphones are changing the retail experience.

Digital communications in healthcareAppropriately enough, and just in time for the conference in Chicago, I read an article in Marketing Daily about Walgreens new “Pick Up Today” service rolling out in Chicago. We have seen this multichannel trend in other retailers like Wal-Mart and Best Buy and at many grocery stores, but this is the first I have seen for a pharmacy. This really caught my eye as my focus is on the healthcare industry and we recently looked at consumer digital communications trends in the healthcare market.

Walgreens is timing things right - our research shows one-third of consumers are already communicating with their pharmacy digitally (through websites, email, portals, or mobile apps). And it’s not just the young, 36% of those over the age of 50 say they’re communicating with their pharmacy digitally. For now most are simply refilling a prescription or asking a question, but this is another opportunity for a customer touch point. While 31% of consumers say they are currently communicating digitally with their pharmacy, 76% say they expect to communicate digitally with their pharmacy in the future.  

With only 16% of consumers saying they would never communicate digitally with their pharmacy, health insurer, or provider, the trend is clear.  Consumers have certain expectations with regard to digital communications based on what they’ve done in other industries.  It seems like there is a lot of potential here for pharmacies and other healthcare companies (e.g., insurers, providers) and security is really not an issue for consumers even with topics such as prescription drugs and health-related issues. 

So I ask those healthcare companies out there….are you prepared for what consumers expect to be able to do digitally in the future?

 

Digital commiunications in HealthcareDownload the CMB Consumer Pulse report sharing the consumers' perspective around digital communications with their healthcare providers. Download the report.

 

 

 

Posted by Amy Modini. Amy is an Account Director for CMB’s Healthcare Practice and enjoys spending time at the beach and trying to keep up with her almost two year old son.

Topics: healthcare research, Consumer Pulse, conference recap, retail research

Making Segmentation Work: 6 Questions with Westfield Insurance

Posted by Amy Modini

Mon, Mar 12, 2007

CMB: Thanks for taking some time to talk with us today. Can you tell me a little bit about Westfield Insurance and where you were hoping the segmentation research would take the organization?

Lisa Kozlowski: Westfield Insurance is a property and casualty insurance company in Ohio. We have been in business since 1848, writing personal and commercial insurance through our network of independent agents. Up until three years ago Westfield didnt have a formal marketing research department and had never done any type of true market research. With so many changes in the personal lines market in terms of competition from direct writers like Progressive, etc. who were starting to write a lot of businesswhereas our customers cant call a 1-800 number or go online and get a policywe needed to look at the future in the personal lines arena and figure out what the potential was for Westfield.

Susanne Wahl: Well never be going after the price sensitive customer. We also dont plan on changing our distribution channel. Given those two key things, if we are going to continue to stay in the personal lines market, we needed to find out how we could maximize share of wallet, but also do that within the framework of who we are and who want to have as customers.

CMB: So with your segmentation, were you hoping to find new segments specifically or did you just not know how your target marketor potential targetmarket really looked?

Susanne: Due to legacy systems and the fact that our data is at the policy level (not at the customer level), we didnt really have a good, defined picture of who our current customers were. Therefore, we were not sure who to target, how to appeal to them, reach them, etc. We had quite a few gaps in our knowledge base. So, we needed to know who was out there, what they liked, and if we could realistically reach them given our capabilities and resources.

CMB: Realistically seems to be the key word. What steps did you take to ensure that this research would produce something you could easily use?

Susanne: Several things were key to making sure the research was useful.

1) We got involvement from executive leadership right away.

2) We asked them exactly what decisions they were planning to make with this information, which ones were most important, and if they were prepared to act on this information when it came backeven if it came back in a negative way.

3) Working with Chadwick Martin Bailey intimately during the analysis portion ensured that all of the potential solutions were discussed and that they accounted for our need to stay within the independent agency channel. It also ensured that we used a solution that optimally fit the data as well as our value proposition, our mission, and goals.

Lisa: It really was critical that we had support from the top levels. We knew that this was going to be the foundation of personal lines strategy moving forward. We knew it was going to be more than just a marketing exercise.

Susanne: We let them know that this was not going to be a black and white solution with a perfect roadmap and that they really were going to have more work to do once the research was completed. Personal lines leadership was going to have to evaluate what we got back and determine from a product, underwriting, marketing, etc. perspective which segments they were going to go after.

We had to step out of the role of research to encourage and assist people to use the information: What do they do next? How to build a plan with it? So we went into a planning role which was challenging, but it was worthwhile to make sure that we did provide value with the information we got back.

CMB: What can your end users do now that they couldnt do before?

Lisa: First, we are able to have more confidence in building an actual strategy that is customer focused. Weve always had a goal to be customer focused in previous years but we never had strategies and plans to support that.

Second, we are able to understand more about how our current customers work and feel confident that there is market potential to sustain us for some time. The biggest benefit was highlighting the opportunity to cross sell and maximize the return we could get from each customer.

Also, instead of just assuming that a customer still wanted to buy through an independent agent there was validation that there are still people who connect with our value proposition, which includes selling through an independent agent.

Susanne: It also allowed us to learn more about customers than we already knew in a sense of their lifestyles, what their motivations are for finding insurance. For the first time we could see where the potential is so we can align our distribution appropriately for maximum effectiveness. Now when we talk about what the key messages are, we have a better idea of how to position ourselves to appeal to the right people.

CMB: How would you say that doing segmentation in the insurance industry is different from a more product oriented market or just other industries?

Lisa: I think that there are three areas that insurance is different.

First, there are more things we need to consider when looking at the actionability of a segment, for example in insurance you not only have to evaluate the potential of someones wallet, you also have to look at and evaluate risk factors. So the people with the most money and the most potential are not always the best insurance risks. The segmentation might look great, but then we could look at additional information and they may not be the type of people we want to underwrite from a risk perspective.

Another thing is that insurance is often seen as a commodity product and many people are not too involved in their decision. So that is why incorporating our distribution channel into the design of the segmentation was key.

The third thing is that in the insurance industry redlining is a big thing. We have to be very careful and politically correct, we have to be very sensitive to whom we target in terms of race, neighborhood, and things like that, and those things really have to be more&

CMB: Do you have to take that out of the equation?

Susanne: We have to in terms of defining the segments. However, we can use things to describe each segment. We have to be prepared to show proof that we are not targeting based on anyones race, neighborhood, etc.

Lisa: We have this established distribution system. And, over the years, we have relied on those agents to bring that business in, so now there is an entire shift for the independent agent system and regional carriers like ourselves to start defining our appetite. Rather than saying, Agents, we want to write all the homeowners we can, we want to say things like, We want to write customers that are align with our value proposition.

Susanne: I think too that the underwriting and risk aspect requires a lot more involvement from a cross-functional team than what you would do in other industries. For example, most companies typically use the market segmentation mainly for creative messaging and reaching folks with those messages. We were using it to drive long-term strategies, not just tactics. This requires involvement from many different areas of operations in addition to marketing.

CMB: Is there any advice you would offer to anyone in a similar situation or anything else you would like to add?

Lisa: Direction needs to come from and be internalized at a corporate level – a senior executive, president, and CEO level. I think defining very clearly what to expect from this process, what will and wont come out of it is so critical. You dont want to be left at the end with people envisioning that you had this project and you would find leads and customers and they were all so perfectly aligned in these wonderful neighborhoods. You have to be real clear with what you are communicating, I think you need cross functional involvement – there is absolutely no way you can do the research, hand it off to an executive then walk away.

Lisa: Most importantly, you have to partner with a segmentation expert, not just a research company who happens to do segmentation. You have to find a company that specializes in segmentation.

Susanne: They need to customize their approach and not just offer a canned approach. I think CMB brought a lot of value to the table in terms of analytical skills, but really, if they did not have a familiarity or a theoretical background about how to apply different statistical methods like CHAID and discriminant analysis, factor analysis, they would not have known which solution provided the best fit for us.

Lisa: Or to design the survey properly to get there.

Susanne: That was really key because a lot of times people try to sell you a canned approach and they are showing me that they are more concerned about selling their product and not necessarily concerned with meeting our organizations needs.

Topics: insurance research, Researchers in Residence, market strategy and segmentation