News
Building an Effective eCRM Strategy in Healthcare
By Bob Weil on Thursday, September 21, 2006 at 3:03:25 PM
Healthcare at the Crossroads
In the late 1990s, a Health Forum Journal article summarized the present healthcare market imperative effectively with this statement: “Who stands to gain and lose most among the current health care industry players? Those players who use information technology to embrace the patient, to create trust and long-lasting relationships, to provide the patient with comprehensive yet understandable information and to ease the transactional burdens of doing business with health care will win. All others will lose.” (1)
A key differentiator for healthcare organizations will be how they meet and exceed the expectations of their customers, as those customers define them. Described in this fashion, the concept may be an uncommon orientation for healthcare. Hospitals should consider successful organizations like Land’s End and Amazon as their primary competition – that is the customer-care benchmark against which customers will measure their experience, not merely other hospitals.
One of the most compelling definitions of Customer Relationship Management (CRM) contains little reference to technology. A financial services researcher described CRM as “Activities an enterprise performs to identify, select, acquire, develop and retain increasingly loyal and profitable customers. CRM integrates sales, marketing and service functions through business process analysis, technology solutions and information resources to maximize each customer contact.” (2)
As noted in an earlier newsletter, effective healthcare CRM has never been primarily about technology – but first and foremost about how an organization interacts with its patients, physicians, consumers and other constituents to provide value. The right technology is always a vital part of enabling a CRM strategy, but technology alone cannot take the place of an organizational culture, business processes and staff that are customer-centered in their focus. eCRM may be seen as the online expression of an organization’s CRM strategy, and is the primary focus of this article.
Initial eCRM Successes
Healthcare’s first forays into eCRM have typically been targeted initiatives for which the organization is well prepared culturally and technologically, and where a rapid return can be identified. Examples of such applications include:
•Henry Ford Health System – Secure HIPAA-compliant patient-physician communications (goal: reducing calls to call center and enhancing communication)
•MedStar Health – Targeted direct mail and e-mail communications with constituents (goal: incremental new revenue through predictive database marketing)
•Strong Memorial Hospital – online physician approval of discharge summaries and examination notes (goal: physician outreach and other efficiencies)
Initial successes with these and other hospitals include:
•Building and maintaining patient and consumer loyalty through relevant, personalized and timely communications
•Helping patients and consumers achieve better health and wellness by providing self-service health and disease management resources
•Reducing costs and increasing effectiveness by identifying patient and consumer needs and providing the correct services online
•Tracking the results of ongoing communications with patients and consumers, and refining the customized messages and services based on what is learned
•Using business analytics and modeling tools to predict patient and consumer needs and behavior
•Measuring, tracking and reporting on ROI
CRM best practices for the healthcare are still evolving, but they will likely include the following:
•Understand the cost to acquire and retain profitable patients
•Understand what provides value for the “customer” (patients, physicians, consumers, etc.)
•Value data and its ability to help predict future patient behavior
•Leverage value-based services to support targeting, cross-selling of other system services
•View technology as a key enabler to automatic business processes
•Understand how to track and measure results to determine ROI
“What’s in it for me?”
The old marketing was based on the concept of “tell and sell” – companies controlled all aspects of the message, which was biased toward brand and image rather than features and content. The customer’s role in the process was clearly passive, until it came time for him or her to purchase a product or service.
Today, the rise of consumerism has caused people to take charge of their health care, and the expectation is a “dialogue” with rather than a sales message from a service or product provider. And today’s consumer is not ready to part with his or her personal information until there is an assurance that the receiving organization will provide real value (as interpreted by the consumer and not by the service provider) in exchange.
The equation is now “learn and earn” (3) (‘Learn about my needs, and earn the right to communicate with me on a recurring basis.’) The man in the street might call this the ‘what’s in it for me’ factor.
The chart below illustrates the shift from a traditional/message-based to an interactive/value-based messaging paradigm:
The 1999 Gartner Research chart below has been extended to illustrate how the healthcare-wide “eHealth Transformation” from basic web presence (“brochureware”) to a website has begun to recast the way hospitals interact with consumers, patients, physicians and employees using Internet technologies. For hospitals and health systems moving toward levels 3 and 4, eCRM initiatives have become a core element of their Internet strategy.
Developing an eCRM Strategy
What steps can a hospital or health system take today to begin developing eCRM capabilities? Here is a checklist – your organization may enter the sequence at some point beyond the start of the process:
•Get stakeholder agreement on top 5–8 achievable website and eCRM goals
•Determine competitive pressures
•Confirm and prioritize website audiences (e.g., consumers, patients, potential employees, etc.) – hospitals cannot be all things to all people
•Consider “voice of the customer” research to understand how your constituents (consumers, patients, physicians, employees) view their needs
•Develop business case for acquisition of a content management system with functionality that will support your eCRM efforts
•Through a formal (ideally guided) planning effort, develop scope of work, then create phased plan for implementation
•Confirm readiness to improve business process as part of the effort
•Develop website success metrics
•Review project timeline, identify internal resources, factor budget considerations
•Set appropriate internal expectations for next phase
•Identify appropriate technology partner with the right tools
•Build the infrastructure
•Train to ensure adoption
•Measure results
•Begin next phase of the effort (start at the top of the list)
What will determine which audiences should be targeted with what functionality and content, and to what depth? Each hospital will need assess its unique market challenges, strategic business objectives and community commitments in the context of available resources. As Adam Klaber of PwC Consulting noted: “The real trick to CRM is not treating everyone well; it’s treating the right people well based on their profit profile.” (4) Even in not-for-profit environments, there is typically a need to balance support for the underserved with services that provide revenue for the hospital. So, identifying the ideal intersection of hospital needs and the needs of its constituents is vital.
In the late 1990s, a Health Forum Journal article summarized the present healthcare market imperative effectively with this statement: “Who stands to gain and lose most among the current health care industry players? Those players who use information technology to embrace the patient, to create trust and long-lasting relationships, to provide the patient with comprehensive yet understandable information and to ease the transactional burdens of doing business with health care will win. All others will lose.” (1)
A key differentiator for healthcare organizations will be how they meet and exceed the expectations of their customers, as those customers define them. Described in this fashion, the concept may be an uncommon orientation for healthcare. Hospitals should consider successful organizations like Land’s End and Amazon as their primary competition – that is the customer-care benchmark against which customers will measure their experience, not merely other hospitals.
One of the most compelling definitions of Customer Relationship Management (CRM) contains little reference to technology. A financial services researcher described CRM as “Activities an enterprise performs to identify, select, acquire, develop and retain increasingly loyal and profitable customers. CRM integrates sales, marketing and service functions through business process analysis, technology solutions and information resources to maximize each customer contact.” (2)
As noted in an earlier newsletter, effective healthcare CRM has never been primarily about technology – but first and foremost about how an organization interacts with its patients, physicians, consumers and other constituents to provide value. The right technology is always a vital part of enabling a CRM strategy, but technology alone cannot take the place of an organizational culture, business processes and staff that are customer-centered in their focus. eCRM may be seen as the online expression of an organization’s CRM strategy, and is the primary focus of this article.
Initial eCRM Successes
Healthcare’s first forays into eCRM have typically been targeted initiatives for which the organization is well prepared culturally and technologically, and where a rapid return can be identified. Examples of such applications include:
•Henry Ford Health System – Secure HIPAA-compliant patient-physician communications (goal: reducing calls to call center and enhancing communication)
•MedStar Health – Targeted direct mail and e-mail communications with constituents (goal: incremental new revenue through predictive database marketing)
•Strong Memorial Hospital – online physician approval of discharge summaries and examination notes (goal: physician outreach and other efficiencies)
Initial successes with these and other hospitals include:
•Building and maintaining patient and consumer loyalty through relevant, personalized and timely communications
•Helping patients and consumers achieve better health and wellness by providing self-service health and disease management resources
•Reducing costs and increasing effectiveness by identifying patient and consumer needs and providing the correct services online
•Tracking the results of ongoing communications with patients and consumers, and refining the customized messages and services based on what is learned
•Using business analytics and modeling tools to predict patient and consumer needs and behavior
•Measuring, tracking and reporting on ROI
CRM best practices for the healthcare are still evolving, but they will likely include the following:
•Understand the cost to acquire and retain profitable patients
•Understand what provides value for the “customer” (patients, physicians, consumers, etc.)
•Value data and its ability to help predict future patient behavior
•Leverage value-based services to support targeting, cross-selling of other system services
•View technology as a key enabler to automatic business processes
•Understand how to track and measure results to determine ROI
“What’s in it for me?”
The old marketing was based on the concept of “tell and sell” – companies controlled all aspects of the message, which was biased toward brand and image rather than features and content. The customer’s role in the process was clearly passive, until it came time for him or her to purchase a product or service.
Today, the rise of consumerism has caused people to take charge of their health care, and the expectation is a “dialogue” with rather than a sales message from a service or product provider. And today’s consumer is not ready to part with his or her personal information until there is an assurance that the receiving organization will provide real value (as interpreted by the consumer and not by the service provider) in exchange.
The equation is now “learn and earn” (3) (‘Learn about my needs, and earn the right to communicate with me on a recurring basis.’) The man in the street might call this the ‘what’s in it for me’ factor.
The chart below illustrates the shift from a traditional/message-based to an interactive/value-based messaging paradigm:
The 1999 Gartner Research chart below has been extended to illustrate how the healthcare-wide “eHealth Transformation” from basic web presence (“brochureware”) to a website has begun to recast the way hospitals interact with consumers, patients, physicians and employees using Internet technologies. For hospitals and health systems moving toward levels 3 and 4, eCRM initiatives have become a core element of their Internet strategy.
Developing an eCRM Strategy
What steps can a hospital or health system take today to begin developing eCRM capabilities? Here is a checklist – your organization may enter the sequence at some point beyond the start of the process:
•Get stakeholder agreement on top 5–8 achievable website and eCRM goals
•Determine competitive pressures
•Confirm and prioritize website audiences (e.g., consumers, patients, potential employees, etc.) – hospitals cannot be all things to all people
•Consider “voice of the customer” research to understand how your constituents (consumers, patients, physicians, employees) view their needs
•Develop business case for acquisition of a content management system with functionality that will support your eCRM efforts
•Through a formal (ideally guided) planning effort, develop scope of work, then create phased plan for implementation
•Confirm readiness to improve business process as part of the effort
•Develop website success metrics
•Review project timeline, identify internal resources, factor budget considerations
•Set appropriate internal expectations for next phase
•Identify appropriate technology partner with the right tools
•Build the infrastructure
•Train to ensure adoption
•Measure results
•Begin next phase of the effort (start at the top of the list)
What will determine which audiences should be targeted with what functionality and content, and to what depth? Each hospital will need assess its unique market challenges, strategic business objectives and community commitments in the context of available resources. As Adam Klaber of PwC Consulting noted: “The real trick to CRM is not treating everyone well; it’s treating the right people well based on their profit profile.” (4) Even in not-for-profit environments, there is typically a need to balance support for the underserved with services that provide revenue for the hospital. So, identifying the ideal intersection of hospital needs and the needs of its constituents is vital.
1. Umhoff, Barry and Jennifer Winn, “The Health Care Profit Pool: Who Stands to Gain and Lose in the Digital Economy” in Health Forum Journal, Vol. 42 No. 3 May-June 1999, pp. 46-50, 52. as quoted in The CRM Health Portal, by Customer Potential Management Corporation, 2000.
2. J. Galbreath, “Relationship Management Environment,” Credit World, 87 (2): 14-21, as quoted in Boxwell, Laurie, “Customer Relationship Management,” February 2000 (http://start.it.uts.edu.au/pgproj/crm.pdf)
3. Doc Searls, “Broadsmiths, Go Home,” MarketSmith (http://www.ssc.com/websmith/issues/i2/ws33.html)
4. John Zipperer, “Going Global: PWC Consulting's Global CRM Leader Talks About What Consulting Firms Bring to the Table,” Internet World, June 2002. (http://www.internetworld.com/magazine.php?inc=060102/06.01.02feature2.html)
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