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Consumer Centricity in Healthcare

By  Advisory Services Staff Writer Advisory Services Staff Writer  on 2013-03-26 06:12:00  |  Featured in  Insurance
Advisory Services Staff Writer
Posted By Advisory Services Staff Writer
in Insurance
on 2013-03-26 06:12:00

customer.centricity.healthcare.focus

Doing the job
There is a need to combine experience and function into a consumer model and I believe there is a strong use for it in health care to achieve member engagement. An idea came to me after I read about the work of Clayton Christensen and a fellow researcher. It was an article on "Milkshake Marketing" from Harvard Business School published in 2011. Clayton claimed that 95% of new products fail and companies need to look at products in the way that customers do, or how a product “gets the job done.” Jobs have functional, emotional, and social dimensions.

customer.centricity.healthcare.point.view.2016I was fascinated by this article and decided to follow the role of a milkshake in the eyes of a consumer with the goal to increase sales. The study found that consumers bought the most milkshakes in the morning and for common reason. Consumers faced a long commute and needed something to make their drive more interesting. They were not hungry but would be by 10:00 am. The milkshake was thick so sucking through a straw gave them something to do. These consumers also were in dressed in business attire and the milkshake was less likely to get their clothes dirty compared to a donut or a bagel. It was contained enjoyment.

Traditional marketing says to segment the market by demographics and by product. Clayton’s argument was to segment according to jobs-to-be-done. By focusing on the job, it was discovered that by increasing the thickness of the milkshake and adding chunks of fruit, the job-to-be-done was enhanced and sales increased. It was also discovered that there was another type of milkshake, a treat for children with a thinner consistency so parents would not have to wait for them to finish it. This shows two jobs that needed to be done. Now add experience.

Experience
During the study, I noticed a correlation between a product’s job and the overall experience the person has with it. It seemed to be more than just user experience (usability), but also involved the journey or customer experience of the event before use, during use and after use. I observed that products that were lean on features but robust on the experience were more likely to be adopted and successful. This concept of consumers choosing packaging over content has been around for a while. As adults we choose laundry detergent largely because our families used it when we were growing up (brand) or because the color of the package is attractive (packaging). Not many people actually read and understand the chemistry of the ingredients (content). Maybe we are seeing a shift in consumer behavior and the new form of “packaging” is the experience? Personally, I would prefer to sacrifice features in order to remove the hassles of product selection, purchase and use. To me, experience has become the product differentiator if nothing more than to avoid adding frustration to my busy lifestyle. If a vendor has a useful product with a great experience, then I do not mind waiting on lines to get it either. Even the wait can turn into an interesting experience if we design the experience well.

The figure below shows a model for connecting the experience and functionality with consumer relationships.

chart.customer.centricity

Legend: Blue - product type, Red - consumer feeling, Green – consumer mode

Scenario 1 – High Excitement and Limited Use

If a consumer has a useful product that offers a great experience in purchasing it and using it, there could be end up being strong user adoption. The excitement may not be sustained over time as users realize the “fun” is gone and the usability of the product waned. Remember the fads of yesteryear? Clothing can fit into the category of a fad. Articles of clothing that lost its excitement include bleached jeans, hoop earrings, penny loafers, and leggings. They were still functional but a shift in the experience occurred. Experience can impact the functionality as well. If a style no longer creates a good feeling while wearing it, the clothing no longer “performs its job” to make the person feel good and it will be discarded for another piece of clothing. In this mode, the consumer creates a short-term relationship and the product seems more like a fad with a short product life cycle.

Scenario 2 – High Use and Limited Experience

A product such as phone service and cable TV from a cable provider that does an OK job and provides a poor customer experience, may not have a foundation for a relationship to develop. Forrester reports the customer index for cable TV providers is in the poor range. From a consumer perspective, consumers put up with the cable TV provider and they accept what they are given, but will jump to another provider at any opportunity if the product stops performing or they become fed up with the experience. This particular industry has retention issues which could be more severe if there were more vendors offering services. The barrier to switching to another provider is low.

Scenario 3 – High Use and High Experience

Lastly, if a consumer participates in a service with great products and a satisfying experience, such as Amazon.com, there is a foundation on which to build a relationship, even online. Amazon ripped business away from brick and mortar stores and offers excellent customer service throughout the shopping experience. Amazon provides reviews of products, updates on orders and an evolving shipping status in real time. The experience supports two tenants of consumerism, it is convenient and fast.

Facebook is another example of a product that does the job without getting overly complicated and offers a good experience. Users of Facebook are truly engaged and we see this in how much time is spent on the site. It has also integrated into the user’s lifestyle, a powerful combination.

To sustain the relationship and use of a product or service,a consumer must either tune the experience to keep it fresh and maintain the usefulness of the product. I believe I see this with Apple’s iPods. Personally, I own 4 iPods and wondered why? I came to the conclusion that Apple generated a fun experience for me with their initial product launch. It hit the fad stage first and moved into the valued area. Early iPods only did the job of playing music and over time I began to retire my iPods to a drawer. Why? Because, I found that the excitement of having an iPod diminished over time and the experience decreased as well. I then moved into the commodity area.

Soon, Apple released a newer model which increased my excitement and the bonus was the newer model had a new feature making it seem more useful to me So I bought it. Quickly I moved back to the fad area because the usefulness and the experience was high and I drifted into the valued area shortly there after. Repeat cycle 9 months later.

It seems like the experience was being pulsed to hook me into buying “upgrades” to keep the experience going. I call this “Pulsating Experience Marketing”. I was an experience junky and the observed behavior seemed a lot like the way I play with a cat. I would put a toy on a string and then tease the cat by moving the toy close and then pulling it away. Repeat for a sustainable experience.

Without the introduction of a new experience, the first iPod would have gone to my daughter’s play box with no repeat of the cycle. I believe that experience and usefulness are closely linked to driving consumer behavior and behaviors drive consumer engagement.

How do you think this concept applies to healthcare?

Advisory Services Staff Writer

Advisory Services Staff Writer

 

One of Paragon's thought leadership staff writers in the Advisory Services Practice

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