Seeing patients as customers

Editor’s note: Nancy V. Paddison is senior marketing communcations specialist at CPM Marketing Group, Middleton, Wis.

Customer relationship management (CRM) is a new way of looking at and interacting with patients and prospective patients in a health care market. It represents a change in the way business and marketing are done to build customer loyalty, improve customer service and strengthen the bottom line. To effect organizational change, you must first look at deficiencies or outdated methods in the workplace, along with market trends. Once you’ve identified these issues, it’s easier to find a solution. For a growing number of health care organizations, CRM is that solution.

Health care organizations cite five reasons for adopting CRM:

1. To drive more of the right kind of revenue.

a. Attract the right payer mix while fulfilling the organizational mission.

b. Answer the questions: Are we reaching the right customers? Are preferred patients responding? Do individuals we communicate with actually need the services we are promoting? What is the ROI of our campaigns?

2. To better operationalize business strategy.

a. Prioritize and focus resources based on comprehensive market and patient database information.

b. More carefully align marketing tactics around the organization’s strategic goals.

c. Measure to determine effectiveness and ways to improve.

3. To increase marketing effectiveness.

a. Stretch existing or shrinking dollars to reach more geographic areas and customer segments, and to increase the number of promoted service lines.

b. Respond to more market-savvy health care consumers who are used to CRM tactics and efforts from other industries such as banking, retail and travel.

c. Speak directly to each customer using technology such as variable digital imaging to create unique communications for each individual.

4. To prove (undeniably) marketing’s worth.

a. Effectively track and calculate the return on investment attributed solely to each marketing campaign.

b. Answer the question: What is the ROI of our marketing campaigns?

5. To enhance customer loyalty and build long-term relationships.

a. Offer special programs for specific patient segments such as seniors, cardiovascular and obstetrics patients.

b. Build on overall hospital reputation and skill of the staff to retain patients.

Understanding CRM

Understanding specific problems CRM was designed to solve and how it solves them allows you to build excitement and justify CRM to key decision makers. You must also understand the components of CRM.

Key CRM components:

  • A comprehensive database, which compiles and standardizes information from disparate sources across the organization. This includes patient, non-patient and marketing information: internal information - inpatient and outpatient data, ER, Web site, call center and foundation; external data - state data, demographic enhancements, non-customer lists; computed information - cleaning and scrubbing of all data, duplicate matching, death suppression as well as market and health risk utilization projections.
  • Data mining, analysis and tracking, which allow you to explore your database to discover information, new correlations, and patterns and trends that might not be obvious. Specific online analytical processing tools offer detailed, customized analytical reports based on parameters you define. By setting up a control group for each campaign, you can get a comparison that allows you to measure the exact impact of marketing programs. In addition, you can easily access your database from anywhere with these tools.
  • Predictive segmentation, which offers a look at projected health risks among patients and the market at large so you can more efficiently plan service line strategies, business development and campaigns. Predictive segmentation, also called predictive modeling, uses mathematical techniques, health care variables and disease states to actually predict health outcomes by scoring both patients and non-patients in your database. Predictive modeling can result in more focused intervention, disease management and focused campaign efforts that are more financially beneficial than traditional segmentation methods in reaching the right individuals.
  • Automated campaign management, which allows you to send personalized and relevant information to the right individuals at the right time for more effective behavior modification. A campaign management tool reacts to data captured from every information source in your facility or system and turns it into a variety of programs to help you reach your target audience. This intelligent agent sits on top of your database to manage, monitor and track results of multi-step, multi-channel marketing programs.

Variable digital imaging allows organizations to produce customized pieces for each individual. Rather than sending the identical postcard, brochure or newsletter to thousands, digital imaging allows you to create a unique piece for each individual with relevant copy and graphics.

CRM applications

You can use these CRM tools in a variety of applications:

1. As a strategic planning/decision support system.

- Analyze your organization’s performance year-to-year and compare against other providers in the area to determine market share, gaps in service, and potential for new service.

- Use data to prioritize and focus your resources based on market analysis.

- More strategically plan growth strategies and new product development.

2. As a prime enabler to build and sustain customer loyalty.

- More efficiently and cost-effectively reach the right customers: specific messages for individuals; right time based on event or treatment triggers; right channel(s) based on convenience and preference.

- Watch and respond to market/customer trends indicating needs and desires.

3. As a solution for promoting brand/organizational strengths.

- Demonstrate you know your customers and will respond to their individual needs.

- Respond to customers’ knowledge and savvy about brand, preference and loyalty beyond insurance/payer arrangements.

- Measure customer loyalty to gauge service excellence, areas for improvement.

Build a team

To build excitement for CRM and to get key decision makers on board, you first need to build a team of the right people who share your understanding of and vision for the organization and for CRM. Include individuals from top management, strategic planning/business development, information technology and patient care professionals, who will be directly and indirectly involved and who agree on the organizational mission and vision to be achieved with CRM.

The team becomes an ambassador and champion for promoting acceptance and adoption of CRM within the organization. Here are some tips for promoting CRM.

1. Educate. Explain the reasons, benefits and expected outcomes for CRM to top decision makers. These include generating volume and revenue growth for targeted programs, improving business planning with better customer marketing knowledge, building better physician relations, and enhancing fundraising efficiency and effectiveness.

2. Illustrate. Use application examples to illustrate exactly how CRM works in health care.

3. Seek input. Ask key decision makers to provide input that will ultimately affect the way the organization treats its customers. Then ask for acceptance, including the necessary funding.

4. Implement. Once you gain acceptance for CRM, understand it will take time for the organization to make the transition. Map out a reasonable timetable. Make sure managers have the tools they need to effectively incorporate CRM initiatives in a timely manner.

5. Evaluate. Although organizations usually set a timetable for CRM implementation, it doesn’t have an end date. Effective CRM requires periodic reassessment, evaluation and modification to accommodate changes within the organization and the market.

CRM in practice

Because CRM can represent a major cultural shift within the organization, it is important to illustrate the benefits and rewards of CRM by sharing best CRM practices from other organizations. Keep in mind that the CRM application each provider uses depends on organizational objectives and management’s creativity.

Here are a few examples of CRM applications:

  • Advancing business planning based on more complete customer/marketing knowledge. A health system in the Mid-South uses a CRM system to research and analyze many of its capital investment decisions - usually in ways its operating system otherwise could not do. The organization adopted CRM after it discovered it was the underdog with a distant second-place market share. It used its CRM tools for strategic planning to chart the organization’s overall vision, increase volume in existing practices, improve the image of women’s health services and make inroads in the managed care market. Over time, the organization became the solid market leader and continues to use its CRM system every day.
  • Generating volume and revenue growth for targeted programs. A CRM focus helped a Midwestern hospital strengthen its leadership position in orthopedics by shifting from mass-media promotions to CRM techniques and direct mail that increased attendance at orthopedic seminars by approximately 25 percent. The hospital used predictive modeling and other demographic information to carefully select its campaign audience. Post-campaign, control group-adjusted data analysis revealed the hospital achieved 8 percent of its overall response as a direct result of the campaign, and a post-marketing profit of $152,407.
  • Increasing communications effectiveness/efficiency. A Northeastern health provider improved the interactivity of its Web site using CRM to meet the needs of its market - one of the savviest groups of Web users in the country. First, it conducted market research about its Web users’ preferences and needs. Then it customized its Web portal features and interactivity to increase customer satisfaction. To develop a more personalized Web experience, the health system mirrored trends in direct mail and started segmenting portal content for key audience segments. For example, it offered an interactive pregnancy specialty resource center featuring information on high-risk pregnancy, newborns and delivery options. Compared with previous months, the monthly registration for this type of information doubled following the launch of the center. More than 2,000 new registrants signed on during the first 10 months the center was offered, and more than 26 percent of the registrants became patients. This organization uses the CRM multi-channel concept to promote its specialty centers by e-mailing non-portal registrants from e-mail addresses in the CRM database, by playing a message to callers on hold at the call center, by placing banner ads on a local key newspaper site and by sending immunization and check-up reminders to portal registrants.
  • Improving physician relations. A Midwestern health system turned to its CRM system to promote better patient health and stronger physician-patient relationships. It developed a personalized patient retention program for its health centers and medical group, producing response rates of approximately 15 percent. The provider involved its physicians in the process to get better results and then carefully targeted the health maintenance campaign to the health centers’ and medical group’s respective audiences. It used its database and market information to customize campaign materials, set up control groups and effectively track the results.
  • Enhancing image-building effectiveness. One of the key ways health providers can enhance their image and recruit new patients is to conduct new movers programs for individuals new to the community. While the conventional wisdom is to include all newcomers in this activity, one Midwestern health system used a CRM control group to determine the true effect its program had on new movers by comparing activity within the group who received campaign materials with an identical group of individuals who did not receive them. The organization not only wanted to convert prime new movers into patients with a results-oriented creative campaign, it also wanted to highlight the campaign’s ability to stimulate both “call to action” and service utilization responses. Using its CRM system, it gauged its effect on both and was able to prove it earned a net $126,208 return on investment from the program.

Expected return on investment

Organizations that adopt CRM make the commitment to train employees to use it. These organizations also evaluate and modify the program over time to maximize their return on investment. “With CRM we went 3:1 in consumer preference. By segmenting our markets, targeting our brand messages and tracking results, our ROI gives us more options on where to spend our marketing dollars,” says Jack C. Frank, network vice president, Community Health Network in Indiana.

Inova Health System in the Washington , D.C., area was able to track the impact of its “Don’t Wait” cardiology campaign both within cardiology services only and for all other services. The control-group adjusted ROI for cardiology services only was $225,008, while for non-cardiology services it was $578,605. Other organizations note CRM has impacted the ROI of their programs by offering previously unavailable research and analysis with which they could make more reasoned and complete strategic business decisions.

Necessary response

While organizational change is difficult and time-consuming, it often is a necessary response to market and industry challenges and cultural shifts. CRM is one such endeavor that moves health providers beyond a population or market focus to a lifetime, person-centric philosophy.

Adopting and implementing a CRM system requires a shift in philosophy and a financial commitment that can pay off in customer loyalty and preference, leading to improved financial performance and overall brand strength.

By shifting to CRM, the organization can use comprehensive data to better prioritize resource allocation, improve strategic product and service development, increase marketing effectiveness and reduce costs. You’ll find you can drive more of the right kind of revenue while building loyalty and long-term relationships. CRM also helps identify the best individuals, channel and message for each campaign and tracks campaign utilization results to calculate true return on investment attributed to CRM.

Gaining support and acceptance for CRM within your organization requires a team that can promote the vision and educate key decision markers. Demonstrating CRM’s benefits and financial rewards with best-case practices will help you justify CRM.