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What’s in a Name: CVS-Aetna Acquisition Brand Strategy

Posted by Amy Modini

Tue, Mar 20, 2018

merging.jpg

Earlier this month, shareholders approved the $69 billion CVS-Aetna acquisition, marking one step closer to what would be the largest health insurance deal in history—far exceeding Express Scripts’ 2012 acquisition of Medco Health and  the CVS-Caremark Rx deal of 2006.

The CVS-Aetna announcement could dramatically reshape the healthcare industry.

From a brand strategy perspective, this acquisition is interesting because it involves two distinguished brands in the healthcare space—CVS is the country’s largest pharmacy while Aetna is the nation’s third largest healthcare provider.

Two powerful brands coming together

There are many layers to mergers and acquisitions (M&A), but developing a sound brand strategy is one of the most critical components of any agreement—especially when it involves two mega brands like CVS and Aetna.

Aligning on a brand strategy is as important as sorting out financials, operations, logistics, and everything else that comes with the complexities of this kind of deal.

The tricky part is there’s no prescribed framework for the “perfect” M&A brand strategy. How CVS and Aetna plan to proceed is still unclear—whether they remain separate, combine names, or land somewhere in the middle.

But there are several best practices to consider when developing an M&A brand strategy.

Brand strategy must match the business strategy

Why are you merging/acquiring? Is it to expand a geographical footprint? To fill a product or service gap? Whatever the reason, the “why” (e.g., the business strategy) MUST inform your brand strategy.

Dig into each brand to identify what the intrinsic qualities are and let those distinct value propositions guide your strategy.

Account for your audience(s)

Internal and external brand communications must align and support the overall brand strategy and should be tailored to each brand’s audience(s).

In the CVS and Aetna case, both brands touch many constituents—patients, employers, physicians, etc. The brand strategy must account for all these touchpoints and create messaging and experiences that meet each group’s specific expectations and needs.

Bring everyone to the table

M&A is a unique opportunity for brands to refresh their image. However, developing a lasting strategy should include employee input and buy-in from the top down.

Be transparent about the chosen brand path—ideally employees should be privy to changes ahead of time so they can begin to internalize the new brand promise.

Especially in the CVS-Aetna case, employees on the frontline who interact with patients and customers every day need to understand the chosen brand path to ensure a smooth and successful branding transition.

The branding gist

Whether it’s a $69 billion acquisition or the merging of two “mom and pop” shops, building a brand strategy is an integral piece of the M&A puzzle.

There’s no “right” way to approach this, but keeping in mind the business strategy, impacted audiences, and employee input will help make the development and implementation of an effective M&A brand strategy much smoother.

Topics: brand health and positioning, healthcare research, insurance research, health insurance research

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

CMB Employee Spotlight: Andy Cole, Strategy Consultant

Posted by Heather Magaw

Wed, Mar 30, 2016

Andy_Cole_Chadwick Martin Bailey.jpgEarlier this year, CMB proudly introduced our new Consulting and Research Services team (CRS). This team is an extension of our long-term commitment to extending the reach of traditional market research through strategic consulting services. To better understand this team’s unique contributions to client engagements, I sat down one of our strategy consultants, Andy Cole. 

Andy, thanks for taking the time out of your day to connect. Can you tell me a little about your professional background and experiences? 

In a word, I would describe my career as “varied” or “diverse,” but most people look at my background and wonder if I have a problem sitting still. I’m originally trained as a mechanical engineer, and I started out doing R&D projects involving aerospace with Google, non-emissive fuels with the EPA, military-focused brain trauma with the Walter Reed Army Institute of Research (WRAIR), and vehicle collision forensics (with a small, lesser-known engineering company). My first regular job had me working for a large alternative energy company that would send me all over North America to climb 300-meter industrial wind turbines to figure out why they were offline, design temporary solutions to get them up and running ASAP, and work with R&D in Denmark to develop a permanent fix for systemic issues. 

I’m not sure if that meets anyone else’s definition of a regular job. So, how did you get from scaling wind turbines to a career in strategic consulting and research? 

I realized that I had a strong interest in business and management, so I got my MBA and began consulting with large, small, and non-profit organizations on a wide range of topics, including social media marketing, energy, executive training programs, and product development. I also launched two successful businesses in the innovation marketplace, helping large corporations rapidly develop new technologies and discover emerging markets, which was a great adventure but lacked the lifestyle I was ultimately looking for. 

I value diverse experiences because the most innovative solutions are borrowed from other industries and combined or repurposed in a new way. To me, this is the difference between being a true partner who can “connect the dots” versus a consultant who simply knows the best practices in a given industry. Clients don’t hire CMB if they’re just looking for best practices—we recommend a Google search for that purpose. 

Given your unique line of sight, in your opinion, what's the greatest opportunity facing businesses today that a research-based consulting engagement could support? 

There is an enormous trend in companies turning from sales-focused strategies to customer-centric design. When you hear companies embracing things like user experience, VOC, pivoting, and iterating, it’s all about observing and listening to customers, making constant measurements, testing new concepts in the market, etc. That all just screams for custom research. 

When companies are looking to become more customer-centric, they have to have a deep understanding of the target market that is backed by market information and unique insights. This is a huge opportunity for businesses to gain an advantage over their competition, and it’s truly CMB’s sweet spot. 

It seems that more and more consultants are embracing the impact of research. What’s your take on the role of research in the future of business consulting? 

The bottom line is that companies are looking for clear and confident strategic direction, and the language of today’s business is increasingly metric-oriented. It’s not enough for consultants to simply say that customers will like an idea or that a decision will result in greater revenues. The savvy business leader needs to know exactly how much more preferable a concept is and exactly how much revenue they should expect compared to taking an alternative path. Smart clients don’t trust advice without evidence to support it, and that is exactly what research provides. Good research forms the foundation on which effective strategies are built. 

Can you provide an example of a recent client engagement that blurred the lines of delineation between market research and strategic consulting? 

With the Affordable Care Act shaking up the entire healthcare industry, a large national insurance carrier saw an opportunity to use intimate knowledge of customer journey experiences and expectations to figure out which stages and channels were most influential (and would therefore pose the greatest marketing opportunity). Furthermore, the company wanted to know what messaging resonated with individual customers at each stage and within each channel, so it could be sure that marketing efforts would be as effective as possible.  

To tackle this ambiguous challenge, we took a multi-pronged and multi-phased approach: 

  1. A qualitative phase—involving in-depth interviews and moderated online discussion boards—to surface key stages, channels, and underlying context from the customer journey.
  2. A facilitated workshop with stakeholders and decision-makers to discuss key findings/insights and hypotheses, brainstorm potential solutions, and align on the path forward.
  3. A quantitative phase to reveal what individual customers value most throughout their experience and to identify which experiences have the potential to be particularly influential in the decision to purchase. 

It’s great when you get the opportunity to really dig in to that level of detail. What did you learn? 

At the conclusion of the project, we not only identified a number of surprising marketing opportunities by disproving a few fundamental assumptions, but we also validated (and put to rest) several long-standing hypotheses that were a stagnating source of internal debate. We also collaborated with the client to identify creative messaging campaigns that directly aligned with the trends stemming from our research as well as with the organization’s overarching strategic objectives. 

I look forward to hearing about more projects like this one that blur the lines in the future. Thanks again for taking time out of your day, Andy. 

Heather Magaw is the Vice President of Client Services at Chadwick Martin Bailey and has never climbed a wind turbine in her life. . .and never intends to.

Andy Cole is a Consultant at Chadwick Martin Bailey and has already left the interview to go investigate three seemingly unrelated things. 

Learn more about our strategy consulting expertise.

Topics: Chadwick Martin Bailey, strategy consulting, healthcare research, business decisions, growth and innovation, customer journey

Dear Dr. Jay: The Internet of Things and The Connected Cow

Posted by Dr. Jay Weiner

Thu, Nov 19, 2015

Hello Dr. Jay, 

What is the internet of things, and how will it change market research?

-Hugo 


DrJay_Thinking-withGoatee_cow.png

Hi Hugo,

The internet of things is all of the connected devices that exist. Traditionally, it was limited to PCs, tablets, and smartphones. Now, we’re seeing wearables, connected buildings and homes. . .and even connected cows. (Just when I thought I’d seen it all.) Connected cows, surfing the internet looking for the next greenest pasture. Actually, a number of companies offer connected cow solutions for farmers. Some are geared toward beef cattle, others toward dairy cows. Some devices are worn on the leg or around the neck, others are swallowed (I don’t want to know how you change the battery). You can track the location of the herd, monitor milk production, and model the best field for grass to increase milk output. The solutions offer alerts to the farmer when the cow is sick or in heat, which means that the farmer can get by with fewer hands and doesn’t need to be with each cow 24/7. Not only can the device predict when a cow is in heat, it can also bias the gender of the calf based on the window of opportunity. Early artificial insemination increases the probability of getting a female calf. So, not only can the farmer increase his number of successful inseminations, he/she can also decide if more bulls or milk cows are needed in the herd. 

How did this happen? A bunch of farmers put the devices on the herd and began collecting data. Then, the additional data is appended to the data set (e.g., the time the cow was inseminated, whether it resulted in pregnancy, and the gender of the calf). If enough farmers do this, we can begin to build a robust data set for analysis.

So, what does this mean for humans? Well, many of you already own some sort of fitness band or watch, right? What if a company began to collect all of the data generated by these devices? Think of all the things the company could do with those data! It could predict the locations of more active people. If it appended some key health measures (BMI, diabetes, stroke, death, etc.) to the dataset, the company could try to build a model that predicts a person’s probability of getting diabetes, having a stroke, or even dying. Granted, that’s probably not a message you want from your smart watch: “Good afternoon, Jay. You will be dead in 3 hours 27 minutes and 41 seconds.” Here’s another possible (and less grim) message: “Good afternoon, Jay. You can increase your time on this planet if you walk just another 1,500 steps per day.” Healthcare providers would also be interested in this information. If healthcare providers had enough fitness tracking data, they might be able to compute new lifetime age expectations and offer discounts to customers who maintain a healthy lifestyle (which is tracked on the fitness band/watch).  

Based on connected cows, the possibility of this seems all too real. The question is: will we be willing to share the personal information needed to make this happen? Remember: nobody asked the cow if it wanted to share its rumination information with the boss.

Dr. Jay Weiner is CMB’s senior methodologist and VP of Advanced Analytics. He is completely fascinated and paranoid about the internet of things. Big brother may be watching, and that may not be a good thing.

Topics: technology research, healthcare research, data collection, Dear Dr. Jay, internet of things, data integration

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