Across the country, health plans see both opportunity and an existential threat with the Affordable Care Act, and they are responding with a flurry of initiatives: Implementing a retail strategy; reaching uninsured consumers; increased emphasis on small business; defending clients in the large-group space from new category entrants; revising sales-enablement tools; keeping up with new technology and data requirements. The list seems endless.
With so much uncertainty around the ultimate impact of the legislation, many of these new programs are certainly justified. But with the ACA putting more pressure on limited resources, making good decisions about which initiatives to fund and which to save for another day can be vexing. Surprisingly, too few are investing in the retention of their most profitable members, the “healthy and engaged” segment.
Health plans know who they are, where they live and (metaphorically) what they had for breakfast. But unlike their more sophisticated consumer products/services brethren (think American Express, Zappos or Amazon), carriers do precious little to remind their best customers how much they appreciate their business, by rewarding loyalty.
Plan resources are flooding into acquisition programs to open a retail channel, and this is clearly essential work. But the foray into retail can be so all-consuming that it can be easy to look past those members who contribute the most to your bottom line.
So what are you doing to protect that segment of your business and raise the barrier to exit? Good retention programs start at the top, with a concerted effort by senior management to strategically focus resources on solidifying and expanding loyalty and advocacy, as opposed to simply “keeping customers.” These programs are proactive and creative, acknowledging the logistical hurdles and limitations of operating in a regulated environment. And, fortunately, they are highly measurable – the impact of retention initiatives can be tracked and optimized over time. Based on recent experience, we’ve seen that a well-designed program targeting the healthy and engaged segment can generate an ROI of 3:1 or more.
The key to retention is recognizing what your best customers are worth, and deciding that keeping them might just be the most important job in the company.
Looking at Massachusetts and Utah – the first two states in the country with functioning exchanges — it seems that as the ACA kicks into gear and the high costs of acquiring new members becomes clearer, continued investment in your most profitable members will feel like smart money indeed.