It’s impossible to overestimate the importance for healthcare companies of having an effective Medicare Advantage member acquisition program in place. Here are four tips to kick your AEP acquisition and member retention efforts into overdrive:
Know Thy Member
A key success factor is to collect information about your members throughout the path to purchase – when they buy, what plan they chose, and why they bought. Use internal and third-party consumer data to develop profiles of your best members that include demographics, preferences, behaviors, and average lifetime value and use this information to guide your acquisition strategies. This insight will then allow you to develop personas of the member look-alikes that you would like to target.
Another important benefit of knowing your members is that you’re able to understand how and when they make purchase decisions. Mapping of the member journey can help your company to move prospective members along the path to plan selection by removing barriers in the purchase process.
Finally, by combining member information with predictive modeling, you’ll be able to turn a group of prospects into actual members. More specifically, by modeling response behaviors, such as customer inquiries and purchases, you can use the power of statistical analysis to identify those prospects that are most likely to buy.
Measure Your Programs
As is frequently stated, you can’t manage and refine a healthcare marketing strategy if you don’t measure it. And AEP programs are certainly no exception. To objectively evaluate the success of your acquisition efforts, it’s important to consider two key measures – Average Member Lifetime Value (AMLV) and Member Acquisition Cost (MAC). In its simplest form, AMLV is the average value a member is to your health plan over their lifetime. MAC is the average cost of acquiring a new member and is calculated by dividing the total amount you spent on acquisition marketing in a period of time by the number of new members you gathered during that same time.
Some additional measures of acquisition programs include total net number of new members, ROI of advertising and marketing efforts, as well as the total revenue and initial/first-year profitability of new members. Once you’re armed with these measures you’ll be better prepared to take appropriate action to optimize your AEP efforts.
Constantly Experiment and Test Strategies
I always recommend that healthcare companies experiment and test different techniques and use what is learned from those experiences to develop go-forward strategies. In theory, testing of different acquisition methods is very simple. It’s presenting prospects with different marketing messages to see which ones produce the higher response rates. Different aspects of the message (e.g. headline or call to action) can be varied and tested to produce better and better results. Using this “Champion and Challenger” process you can determine which message/approach is better, and subsequently develop follow-on tests to further improve the message again and again leading to substantial incremental sales growth.
Vary and Combine Acquisition Methods
Diversification in acquisition marketing is important because it reduces risk and provides multiple avenues for experimentation and insight about what works and what doesn’t for your particular business. Leveraging and combining multiple approaches will further enable your ongoing war to gain new members.
For example, the combination of traditional direct marketing with social networking and display advertising can deliver significantly higher levels of quality traffic for low overall cost. Integration of additional media with other proven response channels, such as direct mail, has become much easier with the use of personalized landing pages, offer tracking, IP zone display advertising and digital printing techniques. This synergy allows recipients to quickly take advantage of your offer, seamlessly share it with others enabling you to gather more new members, faster and at a substantially reduced cost.
Member acquisition creates a lifeline of sales that are critical to a healthcare organization’s long-term financial success. Try to integrate these tips into your marketing plans and you will be destined to win the war on member churn and amp up your acquisition efforts.