Category Archives: Health Insurance

Anyone who has ever gone to the grocery store knows this scenario well: you turn the corner of the breakfast foods aisle and find yourself confronted with hundreds of different types of cereal. Cheerios alone have over eleven different flavor options (not even considering size variations!), including original, honey nut, honey nut medley crunch, apple cinnamon, banana nut, frosted, chocolate, multi-grain, multi-grain peanut butter, Dulce de Leche, and cinnamon burst. For the average shopper, so many products on a shelf are bound to trigger a headache unless they walk in knowing precisely what they need.

IS MORE REALLY BETTER?

In 2000, researchers Sheena Iyengar & Mark Lepper set out to explore the belief that the more options we have, the better. In a series of experiments conducted in both field and laboratory settings, they found that individuals are more likely to purchase a product (specifically jam) when offered a limited array of 6 choices, rather than a wide array of 30 choices. Moreover, the participants reported greater subsequent satisfaction with their selections when their choices were limited. Think long-term customer retention.

According to a psychology professor and author of “The Paradox of Choice” (HarperCollins, 2003) Barry Collins, an abundance of options can cause a buyer to experience decision paralysis and not make a decision at all. Or they might make a rash decision based on what is easiest to evaluate, rather than what is important and necessary, triggering buyer’s remorse.

FOUR MAIN PSYCHOLOGICAL MECHANISMS UNDERLYING “THE PARADOX OF CHOICE”.

1. Regret: The concept of post-decisional regret states that feeling regret increases with the number of options that we have to turn down. We assume a personal responsibility for making a bad choice and find it easier to replay in our minds what may have occurred had we chosen another option.
2. Opportunity Costs: When making a decision, we are inherently suffering an opportunity cost for not choosing the options we left behind. Our brain requires that we produce reasons why we didn’t go with each of the other options, causing psychological stress.
3. Expectations: As the number of choices increase, so do our expectations to find the perfect option. With higher expectations, we subject ourselves to higher levels of disappointment.
4. Social Comparison: With more options, we are more likely to compare what we have with what others, theoretically, could have, therefore increasing our likelihood of simply comparing ourselves to others.

Barry Collins argues that having some choice is good, as it allows people to recognize their preferences and choose on their own volition. However, when too many choices are introduced, psychological satisfaction with that choice can go in the opposite direction. This also pertains to the people behind the purchasing decisions made for companies. At SBR, we were interested in applying this knowledge in a practical way to help our clients increase sales and drive revenue.

TOO MANY CHOICES CAN RESULT IN LOWER SALES.

This excerpt from Barry Collin’s TED Talk reveals the impact that too many choices can have on sales:

“A colleague of mine got access to investment records from Vanguard, the gigantic mutual fund company of about a million employees and about 2,000 different workplaces. And what she found is that for every 10 mutual funds the employer offered, the rate of participation went down two percent. You offer 50 funds — 10 percent fewer employees participate than if you only offer five. Why? Because with 50 funds to choose from, it’s so damn hard to decide which fund to choose, that you’ll just put it off until tomorrow. And then tomorrow, and tomorrow, and tomorrow, and of course tomorrow never comes. Understand that not only does this mean that people are going to have to eat dog food when they retire because they don’t have enough money to put away, it also means that making the decision is so hard that they pass up significant matching money from the employer. By not participating, they are passing up as much as $5,000 a year from the employer, who would happily match their contribution.”

YOUR SALES TEAM CAN ELIMINATE DECISION PARALYSIS.

Salespeople can mitigate challenges caused by an excessive number of options. How? They can target this psychological process by identifying customer’s preferences and present them with a narrower selection from which they may choose. Rather than “product dumping,” and simply listing all of the features of a variety of products, a sales person must narrow the set of options, and present them in a digestible way.

Naturally, they must first determine what the customer’s needs are (by asking directional questions) and then recommend the product(s) that fit their specific requirements. To further ease the decision-making process, storytelling techniques can be used to help the customer imagine how this product will improve their life or their company.

With a smaller selection of defined options, the buying experience will be less psychologically taxing, and more profitable for the organization. Not only will the customer be more satisfied with your company, but also with themselves for coming to a conclusion seemingly on their own. Win-win. Click here to learn how SBR has catapulted sales performance and results for our clients.

If you run a sales operation, you know and love the challenge of devising plans to achieve a business goal in the midst of numerous competing factors. While some people shy away from being in the “hot seat”, exceptional sales leaders welcome it.

Those who work in healthcare know all too well the intensity of the Annual Enrollment Period (AEP). Close to 50% of the annual sales are obtained in about 8 weeks.

Many healthcare sales and marketing executives spend the better part of the 1st and 2nd quarter reviewing data, analyzing losses and gains. They pull together actuarial, underwriting, legal and other teams across departments to understand the market conditions and health of the products before building sales and marketing strategies. Plus, they need to develop retention plans to maintain their current membership.

To add to the pressure, products are approved by government agencies only a few weeks ahead of the selling window. So the company doesn’t know the competitive landscape until the last moment. Few industries grapple with this level of variable factors as the healthcare industry does.

Combating Declining Sales. 

Given these inherent complexities, it raises the question: how can we consistently boost sales results when consulting with our healthcare clients who face these challenges annually? Here is where course correction has made all the difference.

Some years back, a client engaged us to help their organization reverse a four-year trend of declining sales and repeatedly failing to meet their goal. Using rapid ethnography, we were able to identify the largest barriers and how to correct them.

We had less than 120 days until the start of AEP to make massive changes in practically every corner of the operation. Once AEP started, we vigilantly analyzed daily sales data. Midway through we knew that while the numbers were trending higher than in previous years, at the current rate we would not meet the sales goal. Unacceptable!

Consider Blowing Up Your Plans.

Enter the 11th-hour-course correction. We took a calculated chance that was inspired by how people shop. During the holidays when most supermarkets are closed, there is always one store that remains open. With no other available option, consumers will flock to that store. Applying this to healthcare, we recommended having the contact center remain open until Midnight for the last few days of AEP. During those hours the competitors would be sleeping. Literally!

The result? It worked. In the final three days of AEP, the phone lines were jammed well into 1:00 AM. The extended hours equaled one additional business day, allowing the client to exceed their sales goal for the first time in years. Years later, this technique is commonplace.

While companies may spend months planning for the future, if devised strategies and tactics are not heading in the right direction, you might need to blow up your well-conceived plan. Sure, taking a risk to course correct at the 11th takes some nerve, but in the end, it may be well worth it.

In a 2004 study, researchers assigned participants to consume a snack – either chocolate or prune juice. Half of the participants consumed the snack immediately, while the others had to wait 30 minutes before consuming. Those who ate chocolate enjoyed the product more when they had to wait 30 minutes before tasting it, while those who drank prune juice disliked it even more when they had to wait.

This teaches us an important lesson about emotion – for a positive experience, a delay will increase enjoyment. However, for more negative experiences it is better to, as Nike says “Just Do It” because a delay will intensify the negative emotions when you finally get around to doing it.

In health insurance, it is rare to find someone who equates the annual hunt for adequate health insurance coverage to eating a delicious piece of rich dark chocolate. We know that consumers frequently wait until the final days of AEP (Annual Enrollment Period) to select a health plan. Can health care professionals leverage this knowledge about delays to help members feel more satisfied with their decision at the end of AEP?

Health insurance carriers want prospects and members to have a positive AEP experience – increasing retention and satisfaction. Frequently viewed as a negative experience, putting off a healthcare purchase will surely guarantee an even more extreme response. Health carriers can remedy this by encouraging consumers to sign up early – get the process over with!

The key to successfully changing attitudes about AEP is communication. Reach out to prospects and members early on. Communicate that being an “early bird” will allow for a painless process, guaranteed to be satisfying because your team will support them along the way. While some of the regulations limit offering incentives, you can market the psychological benefit, a value in and of itself. Although members may not recognize the immediate advantages of avoiding delay, they are sure to look back on the selection process more favorably than they would have if they procrastinated.

Does your marketing and sales communication encourage prospects and members to complete the AEP plan selection process early, while emphasizing the ease of purchase? Use your next marketing campaign to inspire consumers to avoid delaying…another way to help boost member satisfaction.

Anyone who has spent time around kids knows that the incessant “Why” query is applied to just about everything. But asking “Why” isn’t just a way to annoy adults. It’s their natural inclination to better understand the world around them using storytelling, a form of communication hardwired in our brains.

Sanden Totten is co-creator of a new podcast, “Brains On!”, which has kids asking their most burning questions about culture, science, art and the like. Totten came upon the idea that kids can be the perfect journalistic tool by observing the way adults responded to them.

On WNYC’s “The Takeaway”, Totten mentioned that scientists spoke differently when talking to adults vs. kids. For example, when explaining El Niño to an adult, scientists might say,“Part of the ocean that we call ‘Niño 3.4’ heats up two degrees above average…”

But when kids asked the scientists the very same question, they turned up their storytelling mojo: “El Niño is basically a weather phenomenon that happens when part of the ocean gets really hot and it messes with all of the wind patterns and sends storms to places they normally wouldn’t be.” Bingo! By giving the microphone to kids, the great questions about the world were not only put within their storytelling context, adult comprehension was boosted as well.

For over a decade now, SBR has helped complex product organizations (like health insurance and financial services) create marketing communications that better reach their consumer audiences. During this time we have tested numerous communications against standard industry barometers like health literacy, which measures a person’s ability to read and understand health-related information. But simply writing communications at a certain grade level doesn’t mean that they are compelling.

When you’re selling something as banal as light fixtures or as complex as health insurance, creativity is often replaced with a product description. Instead of product dumping or feature selling (listing product features one by one), use stories to add both an emotive component to common products and help consumers understand how a product could support them. For example, instead of listing the features of a health insurance plan (deductibles, copays, premiums) create a story about how the consumer will use the product: “When you go to your local pharmacy, you’ll show your membership card to the pharmacist, pay the prescription copay of $10, and then you’ll be on your way.”

You can also use kids to test the relative persuasiveness of your marketing speak. If they can understand it and are maybe even intrigued by it, chances are your adult consumers will as well.

Honoring Valentine’s Day is our chance to say how much we ❤ and appreciate our clients, colleagues and friends. We are not alone. With people in the U.S. spending some $18.9 billion on chocolates, extravagant arrangements and the standard Hallmark card, Valentine’s Day is no joke for businesses big and small. Team SBR dug up some interesting factoids about this holiday to consider what it says about consumer behavior and corporate response.

Artificial Affection

A startling 15% of women will send themselves flowers on Valentine’s Day. Which begs the question, why do we care so much about what other people think? In research, we call this “social desirability bias,” the tendency to report more favorably than your behavior or belief actually suggest. This is one reason why we opt to pair survey research with observational qualitative methods like ethnography to marry what people say they do with what they actually do.

Move Over, Friendsgiving
In Finland Valentine’s Day is called Ystävänpäivä, meaning “Friend’s Day” where they celebrate friends more than significant others. It’s with this sentiment that SBR celebrates as well because building engagement in employees is vital for both our clients and within our own company. A Gallop poll found that workplace friendships could improve employee satisfaction by as much as 50%, noting that camaraderie means more than just lunchtime pal-chats. Creating a workforce built upon communal goals, active participation and a broader sense of purpose are integral to this friendship model.

We Just Love Procrastinating
Procrastination plagues the best of us and we reported on how businesses can embrace the human tendency to delay in order to boost sales and better communicate with consumers. It turns out that people procrastinate even for positive things like Valentine’s Day, with nearly half (47%) of men waiting until February 13th or 14th to shop. The relative risk is pretty low when it comes to a box of chocolates (depending on the relative wrath of your significant other). But when you pair procrastination with higher impact items like health insurance, the risk is much greater.

So there you have it. Whether you feel the need to feign love, celebrate friends with the Finns or simply love to procrastinate, we think dedicating an entire day to amour is so worth it.