Saturday, August 30, 2014

United Healthcare and OptumRx

How “Aggressive Marketing” Can Kill Great Customer Service

By Joni Newkirk -  CEO, Integrated Insight

I loved UnitedHealthcare. They’ve been my insurer for over four years and I’ve recommended them to friends and family as I found their coverage and service to be better than expected - until today.

Recently, UnitedHealthcare chose OptumRx as their mail order provider of pharmaceuticals. Despite the claim of lower cost, I chose to keep filling my prescriptions at my local pharmacy for a number of other, non-cost related reasons. We were automatically enrolled into the OptumRx program by UnitedHealthcare, and OptumRx has been aggressive about trying to get our business, but we’ve declined.

Today, we received a letter saying we would have to start paying 100% of our medication costs if we did not start using OptumRx, or, we could call and dis-enroll from the mail order provider program. Easy decision since we were not using mail order anyway. The OptumRx customer service agent was quick, helpful, and dis-enrolled us with no questions asked. She had obviously been to this rodeo before. She was also a bundle of insight as to what would happen next, letting me know that despite calling and dis-enrolling, UnitedHealthcare would automatically re-enroll us next year when our benefits came up for re-enrollment.

Think about it. On most health plans, if there are no changes, you do nothing. Having dis-enrolled from OptumRx, shouldn’t that now be part of my record? On the phone with UnitedHealthcare I go. The customer service agent tried to smooth over the issue, but when a corporate policy or process is just plain wrong, there is only so much an agent can do. He said we would get a letter, and we could choose to opt out at that time. I challenged him. There is a difference between a letter informing you about the service and giving directions to opt in, versus a letter saying you personally have to take action to dis-enroll – again. Further, he mentioned that if you do not dis-enroll – again - after a couple of retail pharmacy refills, you will be threatened with paying 100% of your medication costs. He offered up without asking that this was “aggressive” marketing, but confirmed that was how the process worked.

Forcing members to experience Groundhog Day every year - to make a phone call or go online to dis-enroll again from a program they intentionally dis-enrolled from the year before – is beyond poor customer service. It ignores what is right for the customer in an effort to hard sell a program that apparently does a poor job of selling itself. I’ll go through the pain each year as I’m otherwise satisfied, but I feel sad about this chink in their armor, and I’ve lost trust in the company. Now my enthusiastic “Yes!” recommendation will become “Yes, but…” You can do better, UnitedHealthcare.

Friday, July 25, 2014

My PSA for the TSA

By Kirsten Snyder - Director, Integrated Insight

After much prodding (and harassment) from my husband, I finally decided to apply for TSA Precheck.  Because I don’t frequently travel internationally, I didn’t think Global Entry was necessary.  However, after reviewing the application process and prices for both Global Entry and TSA Pre-check, the government got me to buy up.

Let’s start with what you get with each program.  TSA Precheck gives expedited security processing via a special line, where you don’t have to remove your laptop, take off your shoes, or any of the other annoying security measures normally required by the TSA.  Global Entry gives you the same benefits as TSA Precheck in addition to expedited and automated entry through customs and immigration.  And once you are approved, the program eligibility lasts for five years for both, after which time you have to go through the application process and pay the fee again.

Because Global Entry has been around for awhile, the introduction of TSA Precheck created a quite an attractive upsell structure, albeit accidental.  At just $85 for TSA Precheck, there is significant benefit for anyone who travels with even mild frequency.  And because they maintained the $100 price, now a mere $15 more you can get you Global Entry.  With most of my flying within the US, receiving expedited security access was of primary interest.  However, for $15 and a five year window to travel internationally, upgrading to Global Entry seemed like a no-brainer, even if I only traveled internationally once.

With one main objective of these programs being to reduce staffing requirements at airports, the strong value of the current pricing should attract frequent fliers in droves.  However, it seems that there is probably opportunity for the government to increase the prices while still continuing to attract new fliers to the program, in particular for Global Entry.  When you compare it to Clear, which costs $179 annually and arguably gives you fewer benefits, it can only be a matter of time before the government realizes the program is underpriced.  How does this apply to your company?  Strong product stratification can provide significant pricing leverage, creating upsell opportunities and generating incremental income.  A 1% increase in price realization can drive 5% to 10% plus increases on the bottom line.  

Thursday, June 12, 2014

Survey Writing

When you emphasize everything, you emphasize nothing

By Laura Iles - Senior Consultant, Integrated Insight

This week, I took a survey to evaluate an online purchase I made with a major company. What I found was an interesting, though ultimately failed, attempt to direct attention through an excessive use of CAPITALIZATION, underlining, bold, and italics. The overall effect, far from helping me to identify key pieces of information, was to overwhelm me with awkwardly presented information.

When respondents find a survey difficult to read, they are more likely to abandon the survey entirely or, worse yet, select random answers. While market researchers put measures in place to identify randomly selected responses, it’s a much better use of resources to reduce the likelihood of capturing invalid data on the front end.

In today’s age of one-sentence updates and bulleted articles, yes, readers skim, and it is necessary to take this into account when designing survey questions. However, overemphasis makes it even more difficult to understand the content. Caps lock reads to most of us as yelling. Which is not to say that it’s never useful, but it is important to retain awareness of how the writing is interpreted by the end user.

The use of formatting to accent particular information is easy enough to get away with on a short question with one detail emphasized. What follows is a logical use of capitalization from the survey in question: the formatting emphasizes the main point of a very simple question.

Even skimming, I know immediately what the survey is asking, and what my answer will be.

It is more difficult to accomplish on the following question, because there are so many parts. By emphasizing everything, the author of the survey made it more difficult to extract the critical information.

I had to read the question multiple times to understand what was being asked; it’s overly verbose and convoluted. Underlining and capitalization do not make up for imprecise sentence structure. Further, the majority of each answer is underlined, rendering the emphasis invalid. When you emphasize everything, you emphasize nothing.

As a writer, it’s tempting to think every piece of information you write is important, and should be accentuated. It’s not. The primary job is to convey information with clarity, and that almost always requires heavy editing.

Knowing how to identify the important information, eliminate the rest, and direct the reader’s attention without causing overwhelm is a critical skill for survey-writing, just as it is in a business plan or the next bestselling novel.

Let’s take a look at a potential rewrite of the offending question:

Extraneous and repetitive information have been eliminated in favor of clarity, and only the details which differentiate each of the answers are emphasized.

Quite a bit of skilled work goes into survey-writing and design, and even small details will impact response rates and reliability. Good surveys start with clearly written questions.

Monday, June 2, 2014

Too Much of a Good Thing is Bad

By Candy Parks - Vice President, Integrated Insight

I love to shop at CVS on Sunday afternoons.  It’s routine – it’s therapy.  I browse the circular in the newspaper, take my coupons, and scan my rewards card the minute I walk in the door to see if there are extra savings surprises awaiting me.  I see the same people every Sunday – they always greet me as I come in and they remember things about me that I appreciate.  They know I buy diapers for my niece who had a baby.  They know I was out last week because I was traveling on business.  This kind of attention is fine with me.

Last Sunday I walked in and was greeted by someone new.  His greeting was a bit exuberant, and considering I’m a fairly bubbly person, for me to say something was exuberant is saying something.  Not only could I hear him, but I’m quite certain shoppers in all four corners of the store and outside in the parking lot could hear him as well.  Just a bit over the top.  I chalked it up to ‘new guy trying to make good’, smiled, responded, and went on my merry way.

Or so I thought.  I’m browsing make-up, and boom – there he is.  He loudly tells me a story about helping a woman pick out lipstick, but he’s not sure he did a good job.  I smile and walk away.  Clearly a clue I’d like to be left alone.  I browse pet treats and boom – there he is to tell me about his Pomeranian who just died.  I nod sympathetically and move along, wishing he would leave.  I hit the greeting cards and boom – there he is to tell me how smart I am to buy my Easter and Mother’s Day cards early.  By now, I’m more than annoyed.  

I’m all about customer service and being attentive. But hounding customers can be as bad as ignoring them.  When ignored, I’m annoyed, but I can ask for help.  If hounded, it’s difficult to say ‘leave me alone.’  I left CVS that day with a receipt totaling $14.27, far less than the $100 plus I usually spend, having literally been chased from the store.   There are some folks who would dearly love to have someone to talk to and walk the store with them, while others will find the attention overbearing.  Teaching employees to “read” the customer is a critical component of exceptional service, and a skill well worth developing.  

Thursday, May 22, 2014

An Unexpectedly Polite Marketing Campaign

By Laura Iles - Sr. Consultant, Integrated Insight

My friend was recently in the market for a new smartphone and service plan. Of course, we knew all the major providers, and had a long discussion about our past experiences with the various firms.

While driving around one day running errands, she was listening to the radio when she heard MetroPCS was sponsoring the station that afternoon. They promised to play only one Metro commercial each 15 minutes, and leave the rest of the time completely commercial free.

She later told me that it was a nice break from the usual influx of commercials, and Metro’s commercial was played just often enough to stick in her mind, but not so often that it became aggravating.

To be honest, Metro had not even occurred to us as a possibility. While they previously merged with T-Mobile, they are still struggling against the existing consumer perception of having a lower-quality network, at least among the individuals with whom I've spoken. Neither my friend nor I would have thought of them as a potential new service provider on our own;  they just weren't top of mind for us in the telecom industry.

But, by the end of the day, she had heard the commercials enough times that Metro was ingrained as a contender for her next purchase. Feeling grateful for the fact that they actually made the drive more pleasant by reducing the number of commercials overall, my friend decided it couldn't hurt to go in and talk with them.

On impulse, she stopped at a store on the way home. Within an hour, she signed up for service with MetroPCS and bought her new phone from them.

A simple, unexpectedly polite, radio marketing strategy drove incremental sales. Metro profited from not only her phone purchase that day, but the ongoing monthly service, and positive word of mouth as well. It’s been over a month and she’s still happy.

While the commercials themselves were nothing special, displaying a little goodwill toward customers can sometimes make all the difference. It’s such a refreshing change from the back to back commercials that, often quite literally, scream at you to BUY NOW!

For Metro to purchase the airtime, and then be gracious enough to resist filling it up nonstop with their firm's commercials, was an unexpected generosity. Customers often switch providers for reasons other than price. Could something so simple, yet unexpected, be your firm’s point of differentiation in marketing?

Tuesday, April 29, 2014

Why the Airlines Created Premium Economy to Solve a Pricing Problem

By Brett Snyder

Brett Snyder is the author of the award-winning airline industry blog, “The Cranky Flier," and president and chief airline dork of Cranky Concierge air travel assistance, for which he has been named one of the Top Travel Specialists for the past three years by Conde Nast Traveler.  He is a contributing editor for PlaneBusiness and he writes for both and the Intuit Small Business Blog.  Snyder previously worked in pricing, marketing and strategy roles with several airlines, including America West and United.  In 2005, Snyder created the travel search site for leading comparison shopping company  Snyder graduated from The George Washington University with a bachelor’s in business in 1999 and Master of Business Administration from Stanford University in 2004.

Part of having an effective pricing strategy is ensuring that you have the right products in the market to cater to interested consumers.  This might sound like a startup issue, but it's not.  Product and pricing are constantly evolving, so ongoing reviews are very important.

One needs to look no further than the airline industry to see an example of how the product offerings have evolved.

Initially there was only one class of service, and it was expensive.  Travelers were treated well (or as well as possible flying small, slow airplanes for hours and hours on end), and they paid for it.  But eventually the airlines began to realize that there was real opportunity at a lower price point.  Coach travel was born.

Initially, the difference between coach and what became First Class wasn't all that different.  And the pricing reflected that.  But as countries moved toward deregulating their airline industries, pricing diverged dramatically.

In the US, coach prices plunged as airlines raced to add capacity and serve this growing demand.  First Class prices, however, stayed high.  They were meant to cater to the original air traveler who wanted a superior experience.

In the intercontinental market, the price differential became so great that eventually a middle tier was introduced.  That was Business Class.  Business Class was created as a way for travelers to get something better than coach without having to pay the many multiples above the coach price to sit in First Class.

That lasted for some time until the same trends from before took hold in the new three-cabin environment.  Many airlines decided to remove First Class or shrink the First Class section while improving their Business Class product, hoping to take traffic from those who flew First Class on competitors.  When British Airways and Virgin Atlantic introduced flat beds in Business Class more than a decade ago, it was the first shot fired in a race that would make flat beds the standard.

First Class became something for the super rich with small, intimate cabins on fewer and fewer flights.  Business Class continued to be a premium product but one that was at a price point that could appeal to more people.  At the same time, coach prices continued to plunge in inflation-adjusted dollars.

The result was yet again a massive divergence between coach prices and the next class up.  How could this conflict be resolved?  The airlines began introducing another class.  This has manifested itself differently in the US than it has elsewhere.

In the US, airlines have simply increased legroom in a few rows at the front of coach and they sell those for a few dollars over the coach fare.  But around the world, airlines like ANA, Japan Air Lines, Air France, British Airways, and, just recently, Lufthansa have introduced a truly new premium economy class.  

Now if a flight from the US to Europe is running about $1,000 in coach, $6,000 in Business, and $9,000 in First, there is now a premium economy option in the $2,500 range.

Having products that fill in the gap like this become important because they provide a real upsell opportunity for the price-conscious consumer who also values a premium offering.  For the airlines, Business Class had become too much of an upsell to tempt the average coach traveler.  But premium economy provides the right product at the right price.

Tuesday, April 1, 2014

Please Don’t Make Me Think

Keeping Promotions Simple

Laura Iles - Senior Consultant, Integrated Insight

My favorite grocery store runs a weekly ad, Thursday through Wednesday. It took me a little while to remember that the ad doesn't run with the calendar week, but I grew accustomed to it quickly enough. The challenge is, the store also gives out coupons in the flier. Coupons that run through Sunday.

Interestingly enough, it’s often the same coupons from week to week, but they are only available half the time. If I want to take advantage of the sales pricing and the coupon, I now have a 4 day window each week to do my shopping. 

I never remember in time. I can’t tell you how many coupons I've thrown away, sadly unused.

A friend who used to work as a cashier at the store rolled his eyes when he saw the most recent coupon. “Oh yes, and come Monday, half the customers will come in and try to use that coupon, since it’s a weekly flier. Explaining why we would put out coupons with different dates than the fliers they are in was always a treat.” 

I thought about that for a minute, relieved that I wasn't the only one who had made that mistake. “Why would the store do that?” I wondered. “They’re just making it harder on everyone.” 

For every customer who tries to use an expired coupon, the manager either has to honor an out-of-date offer (in which case, why limit it at all?) or risk upsetting the client. That’s a losing situation for someone, no matter how it is resolved. And it slows down the checkout process, frustrating other waiting customers. But still the out of sync promotions keep coming, week after week. 

Certain offers need to be fenced, and consumers understand that. But, why is the store running the promotion in the first place? Perhaps it’s driving incrementality, keeping the store front-of-mind, or rewarding longstanding customers. No matter the end goal, if the offer is confusing enough that half the customers consistently misunderstand, is it really driving behavior the way it was intended to? 

So please don’t make me think. We’re all on information overload, and for many of us, we just aren't interested in expending additional mental resources on a company’s promotions. The design team can emblazon “4 DAYS ONLY” in capital letters and bold typeface at the top of the coupon, but when it’s buried in a visually busy flier, it’s still easy to overlook. Online, in print, on TV – we've all learned to tune out the clutter. 

If it isn't necessary, don’t complicate the promotion. Run the coupon for the full week, but don’t run it every single week. Or put out a special insert, separate from the weekly flier. I’ll happily try a new product or buy extras of something if you give me a coupon – but not if I have to rearrange my schedule for it.

This store is not a discount store and, like most of the regulars, I am not an avid coupon clipper. I pay a little more for the service, the selection and the convenience. When promotions are out of sync with each other, it muddies the waters for the customer, which in turn makes work more difficult for the front-line employees. No one wins in that scenario. Whenever possible, keep it simple.