4 Seps to Optimizing Customer Value in Healthcare eBook
1. 4 STEPS
TO OPTIMIZING CUSTOMER
VALUE IN HEALTHCARE
LEVERAGING PREDICTIVE ANALYTICS
FOR CUSTOMER CENTRICITY
2. Despite the lure of customer centricity, many healthcare
organizations still rely on product-centric customer
interactions. But in the new world of retail healthcare,
organizations must deliver a customer-focused experience
that will differentiate their business and help them
successfully acquire, engage and retain customers,
including members, patients and providers.
In this ebook, Pegasystems’ Elizabeth Hart discusses a new
approach to optimizing customer value by leveraging
predictive and adaptive analytics. Called Next-Best-Action
(N-B-A), this approach revolutionizes the relationship with
your customer, delivering targeted and personalized
interactions that can significantly increase customer
satisfaction, sales, retention and revenues.
Elizabeth Hart
Healthcare Principal
Pegasystems
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3. What is Next-Best-Action?
Next-Best-Action provides a corporate “decision hub” that guides each inbound and outbound
customer communication across every communication channel and line of business in your
healthcare enterprise—all in real time.
Next-Best-Action presents your service, marketing and sales representatives (both direct and
indirect) with up-to-the minute insight into each customer or prospect so they can execute on
that understanding and manage relationships to optimize the value of your company to the
customer, and the customer to your company.
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4. Analytics —
The Heart of Next-Best-Action
Sophisticated predictive and adaptive analytics are at the heart of the N-B-A decision hub.
ƒƒ Predictive analytics use relevant data, such as age, income, gender and claims history
to predict a customer’s expected behavior, such as how likely the individual is to buy a
specific health plan.
ƒƒ Adaptive analytics learn from each customer interaction to refine predictions
and continuously improve the success of retention strategies, cross-sell and up-sell
propositions.
Using these models, healthcare organizations can market to consumers based on
anticipated behavior. N-B-A uses these models in real time, turning once-static predictive
models into actionable models that guide every customer interaction and optimize the
outcome, increasing customer engagement and satisfaction.
Each customer can become
a “segment of one” with
the action or offer targeted
directly to the individual.
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5. How Does N-B-A Work?
N-B-A facilitates holistic, continuous communications that select the optimal treatment,
one step—or decision—at a time based on analytic predictions. The decision can be made
in real time, or it can be made when an output file is generated by marketing or sales for
outbound communication.
The just-in-time decision process develops, ranks and presents multiple options,
accounting for factors such as the customer’s propensity to enroll, eligibility, margin and
market-share goals. The customer gets the recommendation which is most likely to yield
a positive result and maximizes value to your organization. There is no channel conflict
because N-B-A is channel agnostic and can deliver an offer via multiple inbound and
outbound channels, while ensuring offers do not collide.
Medical Plan
Propensity
Medical Plan
Strategy
Travel
Coverage
Propensity
Travel
Coverage
Eligibility
Travel
Coverage
Strategy
Wellness
Program
Propensity
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Medical Plan
Eligibility
Wellness
Program
Eligibility
Wellness
Program
Strategy
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Best
Offer
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6. OPTIMIZING
CUSTOMER
VALUE
STEP 1
Ask the Critical Question
Now that we’ve outlined a general understanding of how Next-Best-Action works, let’s
examine the four steps to optimizing customer value.
The first step is to answer one simple—but critical—question:
WHAT IS THE APPROACH WE WILL TAKE TO
MAXIMIZE THE RELATIONSHIP WITH EACH
CUSTOMER WHEN CONTACT OCCURS?
The answer requires collaboration between all the groups and departments involved in
crafting customer interaction strategies, including marketing, sales, underwriting, care
management, compliance and customer service.
The goal is to make sure all stakeholders agree on the priorities for the business: What is
our risk appetite? What customers are we targeting? Is selling more important than retention?
Priorities should be based on considerations such as corporate strategy, expected underwriting
profitability, operational constraints, regulations, company policies and business goals.
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7. OPTIMIZING
CUSTOMER
VALUE
STEP 2
Define Sub-Strategies
Once agreement is reached, each stakeholder works on their specific Next-Best-Action
questions. For example, if the answer to the critical question is that selling is the priority,
then which offer should be made first? What level of risk is acceptable? Each relevant
question needs to be asked and answered until the sub-strategy and all its components
are developed.
What is the purpose
of the interaction?
Call
Reason
Value
Prediction
Value
Service
Prediction
Strategy
Risk
Prediction
What is the level of risk?
How to respond?
Value
Exposure
Prediction
Account
Penetration
Is there a retention risk?
If so, should we invest
in retention?
If so, how to retain?
Value
Prediction
Value
Retention
Prediction
Matrix
Retention
Penetration
Value
Long Term
Prediction
Value
Retention
Proposition
1
Product
Call
Eligibility
Reason
Champion
Challenger
Call
Product
Reason
Proposition
Product
Call
Propensity
Reason
Product
Call
Eligibility
Reason
Call
Product
Reason
Proposition
Product
Call
Propensity
Reason
7
Next-BestAction
Retention
Proposition
2
Product
Call
Propensity
Reason
If risk is acceptable,
what sales proposition
should be made and
in what way?
Value
Mitigation
Prediction
Strategy
Product
Call
Eligibility
Reason
Product
Call
Proposition
Reason
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Value
Best
Prediction
Offer
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8. OPTIMIZING
CUSTOMER
VALUE
Why Answering the Critical
Question is Important
When invoked, the decision hub applies the sub-strategies repetitively and determines the
optimal recommendation for each case. Since the customer’s interests may be affected by the
offer or other factors, such as a change in life circumstances, the N-B-A recommendation is
likely different each time the decision hub is invoked.
Unlike product-specific marketing, N-B-A starts with a holistic view of the customer. The
logic of the process does not vary much from one customer to another, so that a single
campaign can be fitted to the customer, rather than making the customer fit the campaign.
By answering the critical question first, customer segmentation naturally follows from the
level of customer differentiation that is actually operationally supported, reducing costs and
enhancing transparency.
You can develop best-practice blueprints
to fast track the implementation of
campaigns driven by N-B-A
Implementation time for early adopters,
which usually takes eight months to
recuperate costs and 18 months for a full
multi-channel rollout, can shrink by 50%
with blueprints.
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9. OPTIMIZING
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VALUE
STEP 3
Rethink Outbound Marketing
With N-B-A, outbound campaigns are just one element of the total customer experience.
This changes the role of outbound marketing.
ƒƒ The rise of consumerism in healthcare creates greater interest in outbound campaigns
that can encourage customers to engage via inbound channels, which can be a more
effective selling channel as your customer chooses the time to interact and is likely to be
receptive to offers.
ƒƒ Outbound marketing becomes part of the continuous customer interaction across
channels. For instance, an inbound interaction concludes with the customer agreeing
to engage contact, and an outbound communication is the way to ensure that promise
is kept. Or, lifecycle events like a birthday can trigger an outbound action suggesting a
relevant new health plan or wellness promotion.
Campaigns can be consolidated in a
holistic outbound customer contact
strategy in which all campaigns
compete for the “right” to be the one
sent to the customer, doing away with
the random (and probably irrelevant)
product-centric campaign.
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10. OPTIMIZING
CUSTOMER
VALUE
STEP 4
Drive Your Contact Center
with N-B-A
N-B-A can have a profound effect on your contact center. Customer service representatives
(CSRs) who were dedicated to just service can now engage across the customer lifecycle.
By continuously providing the CSR with recommendations for the Next-Best-Action,
each interaction becomes a meaningful conversation that leverages opportunities
appropriately across sales, servicing and retention activities.
A good N-B-A strategy mirrors the contact center’s best practices and ensures that CSRs are
making recommendations that best meet the customer’s needs. For example, it can alert CSRs
of a caller’s upcoming life event and suggest pertinent offers, or caution them that a caller is
at risk of terminating coverage and guide them through appropriate retention activities. As a
result, customers and CSRs experience much higher levels of satisfaction and value.
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11. Using N-B-A in Healthcare
There are many functions within the customer lifecycle where a healthcare organization can
leverage Next-Best-Action including:
MARKETING
ƒƒ Increase campaign
response rates via
personalized, multichannel campaigns
ƒƒ Intelligently segment
markets and continuously
hone campaigns with builtin modeling, forecasting
and testing capabilities
ƒƒ Automate real-time event
push and pull marketing
DIRECT &
INDIRECT
SALES
ƒƒ Increase offer conversion
rates with tailored sales
recommendations
CUSTOMER
SERVICE
ƒƒ Improve offer presentation
rates with automated,
cross-channel programs
ƒƒ Deliver dynamic, targeted
retention, service and sales
recommendations
ƒƒ Personalize interactions
with adaptive analytics that
continuously incorporate new
information, including
real-time customer behavior
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ƒƒ Engage customers in dialog
about specific needs with
“what if” and comparison
scenarios
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12. The Benefits of N-B-A for
Optimizing Customer Value
ƒƒ Channel consistency — The decision hub in N-B-A executes a holistic
strategy that recommends the best action across every channel for
consistent communications that avoid channel collisions.
ƒƒ Natural conversations — Dynamic Next-Best-Actions support natural,
interactive communication. Customers easily participate in the
conversation, focusing their attention on what is being offered rather
than being distracted, confused or annoyed by the process itself.
ƒƒ Cost alignment — Predictive models help you to optimize resource use
and align the cost of the effort with key business factors, such as the
likely response to a proposition or customer lifetime value.
ƒƒ Effective monitoring — Every decision and its basis is captured so that
you can accurately judge the performance of the N-B-A strategies, in real
time or later.
ƒƒ Total control — Because information fed to the decision hub is
developed and maintained by line-of-business management rather
than IT, strategies can be adjusted on demand. With the hub as the
central location for making all customer-facing decisions, changing the
instructions changes the way your company does business.
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13. N-B-A: Delivering Real Customer
Centricity for Optimal Results
Next-Best-Action represents a real solution to achieving true customer centricity. It
can add value to each customer decision and interaction, with the bottom line contribution
increasing as both the number of interactions and their complexity grows.
Next-Best-Action coincides nicely with the move to retail healthcare, which will require
organizations to treat customers as individuals. It also supports the customer’s desire
to choose the moment and channel to contact your company, then select, negotiate and
configure a product or service of their choice. Next-Best-Action ideally fits this model,
allowing your organization to effectively manage customer interactions to deliver
outstanding experiences across every channel, fulfill brand promise, increase revenues
and optimize the use of resources.
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