As health care companies cater to activated and empowered customers, understanding differences in their attitudes, behaviours, and needs is important. Intelligent segmentation can be essential for delivering a unique customer experience.
Many senior leaders in health care and life sciences agree that the future of the industry will be shaped by and centred around customers and customer experience. As customers become more activated and empowered about their health care, and as nontraditional organisations or new entrants continue to offer customer-friendly health and wellness services, organisations are realising that if they don’t evolve with customers, they may risk losing market share. Typically, when we use the term “customer,” we orient toward “consumer.” However, the same points apply to physicians, caregivers, and other family members.
A customer strategy should start with getting to know both current and potential customers and understanding the differences in their attitudes, behaviours, motivations, and needs. This understanding is important for many activities and functions, ranging from developing and promoting digital tools to elevating brand in the market, to designing and offering a new product or service and addressing customer complaints through the channel most important to them. It is also relevant to providing personalised health care, such as advice on improving individual health risks and motivating adherence to a care plan, and meeting the customer where they are when it comes to information, resources, and therapies.
Customer segmentation can be an important approach to target messages that resonate, use resources efficiently, and design products and services in a more personalised way. The approach to segmentation may vary depending on the type of organisation or service or functional business area and data available. Experts we interviewed agreed that the most advanced organisations rely on segmentation as a sophisticated element of their consumer strategies.
As an illustration of segmentation, we share one approach using the Deloitte Center for Health Solutions’ 2020 Survey of US Health Care Consumers. With a focus on consumers’ engagement, agency, and technology utilisation, our segmentation shows that simpler approaches that rely just on age, sex, or insurance status would miss key insights on differences within those demographics. These nuances are particularly apparent for technology use, interest in sharing data, and loyalty to a health plan or health system.
Interviews with internal and external life sciences and health care experts about using segmentation and making it actionable found that:
• Overall life sciences and health care organisations are using a variety of segmentation strategies to attract new members, patients, and customers; onboard them and help them get good care and treatment; and retain them after they’ve had a good experience.
• There’s an increased appreciation for the fact that not all customers are the same, and increasingly, life sciences and health care organisations want to deliver a more tailored, personalised approach.
• Sophisticated use of segmentation may call for enhancing customer data capabilities, creating a consistent view of the customer across all channels, and offering touchpoint systems to deliver the right message to the right person at the right time.
Customer experience has risen to the top among executives’ priorities in both health care and life science organisations. Consider:
• In crowdsourcing studies of med tech and pharma stakeholders, most respondents thought that for life science organisations to stay relevant, they needed to consider partnering with consumer-focused technology and specialised digital health companies,2 as these companies are more likely to have deep insights into what motivates and engages consumers.
• In a Deloitte 2020 survey of pharma company leaders, respondents ranked “changes in consumer behavior and attitudes” as the top issue that will have the greatest impact on their company in the next year.3
We consider the customer using a broader lens that includes the “consumer” or individual person seeking care, plus their physicians, caregivers, and other family members who make up their support network. By using this expanded definition of customer, health care and life science organisations can have a more impactful approach to various business initiative (e.g., outreach, marketing, growth of pipeline, addressing health inequities, and barriers to health).
This expanded definition is a step to creating a more “humanising” approach to health. For example, a recent reframing (Humanizing Healthcare4) of the definition of health care consumer that aims to humanise health care5 expands the definition from just an individual to include his or her “natural support network” or NSN. The framing considers that health is a shared state that impacts more than the individual; and when a person inevitably has a health issue, support comes from various places such as friends, neighbours, and volunteers. When considering how to interact with individuals, health care and life sciences organisations are likely to have a greater impact by considering and using this expanded definition of customer/consumer.
A useful segmentation begins with the outreach goals and outlines actionable steps to effectively reach different target populations.
Many experts working on customer experience at life sciences and health care organisations told us that the use of segmentation varies by type of organisation and function: Health plans focus on enrollment and retention; health systems on gaining market share within a geographic area; and pharma companies on earning trust, increasing brand loyalty, and connecting patients to the right therapies at the right time.
“A segmentation that is not actionable is a waste of resources.”
Traditionally, health plans have mainly focused on employers as customers, or for Medicaid managed care plans, the state Medicaid program that selects plans and pays them. But over the years, especially as more customers entered the individual market via the ACA exchanges, Medicare Advantage has grown as a major line of business, and some new entrants with a strong consumer value proposition entered the health plan business. These trends have motivated health plans to become more customer-focused over the last decade, but these organisations are still catching up to customer expectations that have been influenced by their experience with other industries, especially tech companies.
For example, our DCHS 2020 consumer survey found that exchange customers are 10 times more likely to switch plans if they are dissatisfied than are employer, Medicare, and Medicaid customers. Exchange customers with their expectations of a better experience are likely a glimpse of what health plans should expect in the broader population. One interviewee told us that when his health plan offered an exchange product, customer service interactions of customers in the new ACA market were 30 times those of other government products previously offered. The view of this “new” consumer has prompted many health plan leaders to invest in improved self-service tools and mobile apps. Many large health plans exited this market, but in 2021, companies are coming back into the exchange market as enrollment grows due to the economy, and the last few years have shown stable and positive financials for this line of business.
What business challenges are health plans prioritising using segmentation?
• Tailoring digital solutions to improve customer engagement. Many health plans want to move to a virtual-first health care system, especially since the pandemic. They want to grow consumers’ engagement with technology and virtual health solutions—virtual visits, remote monitoring, patient portals, plan websites, etc.—to manage their health and health care. One question is how much care delivery will continue to be virtual as we recover from the pandemic. Plans want to deepen their understanding of how to match offerings to different groups of customers based on their requirements.
• Determining communication preferences by segment to tailor correspondence in “their language” and thus deliver a more positive customer service experience. Our interviewees told us that they think nontraditional entrants are better at delivering a good customer experience than traditional health care players. One reason might be lessons learned in other industries that have been more closely focused on customers’ demands. Competition from new entrants is creating a burning platform for the traditional players to ramp up their customer strategies.
Segmentation can help health plans understand the best way to communicate with their members by tailoring to each segment’s preferences. The health plan executives we interviewed said that customer loyalty is tied to having an experience that feels effortless or at least easy. Organisations should understand how different segments want to communicate:
Interviewees said that the most highly rated customer service interactions were through a customer service representative who expressed that they understood the consumer’s problem and were confident they could help solve it. By speaking in the segments’ “language,” customers are more likely to feel understood and satisfied, and thus give higher ratings to the health plan.
Interviewees told us that health care organisations are studying the use of artificial intelligence (AI) and chatbots for improving the customer experience.
Efforts to develop and market such tools should begin with an understanding of how different segments want to interact with health care companies and how to engage these segments. One interviewee told us that overall, a well-designed chatbot with a name and a bit of personality can enhance member experience. In some organisations, AI tools are starting to understand consumer sentiments through their word choice and tone of voice. Are they agitated or anxious? Can that information be conveyed so that employees who interact with customers can help them better understand the customer’s concerns? Can customer service representatives use this information in real time to calibrate their interactions?
Interviewees predict this technology will continue to improve over time. In the case of health plans, new members like to reach out through texts and email, and the chatbot can help them navigate, set up their portal account, and understand insurance terminology.
Many health system interviewees told us that their health systems have in the past tended to view the patient or customer through the lens of the physician. They noted that in recent years, this is starting to change. However, with consumers having more options on where they can get services and some payments being tied to the measure of consumer experience, the perspective has changed. Patients may be more inclined to move around to get the experience they want (for example, access to digital tools, short wait times, good customer services interactions). Segmentation is a component of a customer strategy that can support decisions about:
• Where to focus on new patient growth and which markets have potential
• How to deliver the best experience to different types of patients
• How to make various types of patients feel safe and understood
Considerations in developing a segmentation strategy include:
Securing loyalty, as patients have more choice on where to get their care. Clinical care is critical, but several other factors also influence patients’ choice of health care provider. Traditional static segmentation does not often work well for health care, because individuals move in and out of segments. And simple descriptive segmentation can be insufficient to drive health care action and growth planning. Rather, health systems have found that they benefit from leveraging existing nationally representative health care consumer survey data and refining segments using supplemental data and analytics.
Matching digital offerings with the right customers. Individuals vary greatly in their comfort and interest in using digital tools and technology. Since there are tech savvy people in all age, income, and demographic groups, health systems can use segmentation to develop a more nuanced understanding of preferences and comfort with using various virtual health interactions including: virtual visits, remote monitoring, patient portals to access medical records, and easy-to-navigate platforms to schedule appointments and communicate with their clinicians and office staff.
Understanding how to communicate in an in-person and virtual world. In both in-person and virtual visits, individuals say they want to feel heard and understood and be assured that the clinician is providing quality care. However, different segments of the population define those parts of care experience differently. Thus, health systems can use segmentation to help clinicians improve communication strategies in both face-to-face and virtual interactions with all types of consumers.
For health systems, one of the biggest challenges to shift clinicians into this new customer-focused mindset is to help them understand why it is important. Coming from marketers, this can be a tough sell to physicians. One interviewee said having “apostles” helps: Clinicians are more likely to buy in on changes from peers versus hearing a CEO talk about the importance. It will likely require a top-down approach as well as an iterative approach on the ground, showing physicians the data in small bites and focusing on small steps to help them improve.
Traditionally, pharmaceutical companies have viewed physicians and clinicians as their primary customers, since their sales teams have a more direct line to the clinicians who are prescribing therapies, but that has changed in recent years. Pharma companies are marketing more products directly to patients to stimulate interest in options to improve their care. Patients often ask about new medicines and there are more opportunities through social media, apps, and other sources to connect with patient communities and explore different options.
Some goals that pharmaceutical companies are pursuing using segmentation include:
As drug development gets more personalised and complex, pharma companies want to understand which quality-of-life measures patients care about most. The physician is still an important stakeholder, but increasingly, patients are empowered about their health and aware of what they expect from a treatment. Regulators are also moving toward a more patient-centric approach, which has led to change in the industry. Regulators around the world are not only interested in a therapy’s biological impact, but also want companies to demonstrate that they are collecting data on the impact of the condition on the patients’ functioning and quality of life, their experience with treatments, input on which outcomes are important to them, and patient preferences for outcomes and treatments.
Prior Deloitte research showed that pharma companies are trying different strategies to get direct patient input, including hiring ethnographers to capture insights along the treatment journey, partnering with patient advocacy groups to create safe forums to hear directly from patients, and using digital solutions to collect passive data from patients over the long term.
To recruit for clinical trials, and to retain patients once enrolled, companies are working to make trials more patient-friendly and accessible to diverse populations. This means involving patients earlier in the process. As noted in Deloitte’s recent article, the search for a COVID-19 vaccine has spurred customers to seek more transparency in drug development. They want to know people who look like them were represented in trials. The pandemic has spurred more conversation around the importance of clinical trials—particularly within communities of color, which historically have not had adequate representation in trials.
Launching a new product vs. targeting a more mature product. For a new product with less competition, companies might focus on communicating in the consumer segments’ preferred medium to deepen their understanding of their condition and the treatment approach. This can even include having a common set of terms patients use. It is about giving consumers the most relevant platform by which they can engage with physicians.
For a more mature product,companies are trying to understand the unmet need in the market. The traditional pharma model was centered around the sales team that visits physician offices. That model has had to change with the pandemic, as more sales teams work from home and more physicians move to virtual visits. One stakeholder said that the pandemic was making them reconsider their model and their segmentation approach, since some of these changes could be permanent.
For the past decade, the Deloitte Center for Health Solutions has surveyed large, nationally representative groups of consumers in the United States to learn more about their personal experiences and preferences related to health, health insurance, and health care. Using data from our 2020 survey, we conducted a customer segmentation analysis that focuses on health care attitudinal and behavior questions, rather than the more traditional method that uses customer demographics. The analysis categorised individuals into four groups that reflect their preferences for managing their health and interacting with various health care stakeholders. The emerging groups reminded us of the people who were a part of the American frontier during the 19th century. Using this frontier analogy, we describe the segments as follows:
According to our analyses, each of these four groups navigates the health care system differently and has different needs and expectations. This can be critical information in an environment of increasingly patient-centered care, premised upon individuals being active participants in managing in their health.
Our 2020 analysis asserts our previous findings that looking at just typical demographics would mean missing out on important nuance (figure 1).
These insights based on behaviors/attitudes can help organizations target their resources and personalize their communications. For example:
• Trailblazers are the most willing to share their personal data from wearables and apps as well as most likely to consider at-home genetic and diagnostic testing. This data can be harnessed to help health plans, pharmaceutical companies, and technology developers understand the consumer experience, identify unmet needs, and improve products and services.
• To engage Prospectors, organisations should tap into social and patient-advocacy groups. Prospectors rely on recommendations from trusted doctors, but they also seek input from their NSN (e.g., friends and family). Organisations that build patient-focused technology solutions could build trust and reach more consumers by monitoring and participating in patient forums. Health systems, health plans, and life sciences companies should take advantage of online patient groups and social media sites to connect with and understand patient and caregiver concerns, gather feedback, and improve quality of care.
• Use care assistants and case managers to help nudge Homesteaders to use technology. The Homesteader wants a human connection, but is not completely opposed to using technology. Those potentially willing to use a glucose monitor or virtual care/app for mental health services, for instance, will likely need some extra help. For example, a nurse or clinician (or in the future an advocate who is not a clinician) could take five minutes at the end of an appointment to help set up a virtual mental health visit instead of expecting them to do it on their own. Homesteaders can benefit from a health coach who teaches them how to use tools, technology, or digital platforms and solutions that can easily be embedded into their everyday life. Stakeholders should coordinate and partner in offering support services, as multiple care coordinators from various stakeholders could be confusing.
• For Bystanders, involve a caregiver and leverage their community. Bystanders are unlikely to engage with the health system on their own; so, one approach could be to offer services via a formal or informal caregiver (such as a home nurse, a family member, or a friend or advocate) who could encourage Bystanders to engage in their health. Bystanders might also better respond to messages from community organisations that they interact with regularly (for example, churches, grocery stores, or barber shops). Such messages might encourage them to get vaccines at a community pop-up, get information about diabetes or stroke prevention from the local barber shop, participate in mobile screenings at their local grocery store, or partake in healthy eating education at church potlucks.
Finding the right approach is an iterative process and there is no one size fits all. Organisations leading in segmentation have established this as a core competency within their business and have designed the capability to derive continual learnings and adjust as market and consumer conditions change. These competencies include:
Sorting and evaluating data. Most organisations do not suffer from a lack of data; instead, they struggle with sorting through and evaluating the vast volume of data on hand to decide what will be most impactful to their efforts. For example, leveraging self-reported data where possible is a great source of information to help inform segmentation, but this data often sits in siloes throughout the organisation. Where data may be missing, there are also a variety of ways to acquire that data and append that to the information already available. This is a powerful combination that many life science and health care organisations are still not using to their full advantage.
“Decisioning”—taking the optimal data to define segmentation. A key to any successful segmentation is to have the ability to make decisions based on the data and the combination of elements to define the optimal segmentation. But because data and market conditions are always changing (e.g., consider the data that became most important around COVID-19), having a static approach may not provide the best results. Rather, an organisation should regularly revisit their approach: ingesting, evaluating, and prioritising data to optimise the decisions around which segments and subsegments to target (and how and when). The historical hands-on analytics approach is not an efficient one, because it is both slow and resource-intensive. Alternatively, now the opportunities to perform real time decisions on the optimal next best message or next best action have never been greater thanks to:
• Lower computing costs
• A plethora of visual based AI and machine learning tools on the market
• Strong data science resources.
Delivery: Establishing and optimising the segments are critical first steps but delivery sets the wheel in motion. This competency allows organisations to orchestrate the delivery of the message regardless of channel or touchpoint. Much like “decisioning,” this is done with a combination on people, process, and technology and is designed to leverage the data as well as the decisioning, in combination with content and creative, to assemble the right message to the right person (segment) via the right channel and the right time. These output mechanisms can provide a feedback loop on the whole process, informing the decisioning competency with the results of the engagement to drive better segmentation.
Our interviews made it clear that segmentation is essential for understanding and humanising customers and thus differentiating organisations from their competitors. How should life sciences and health care organisations approach segmentation? There is no one right way—different variables and goals call for different approaches. Business need will drive the level of sophistication in segmentation. Some business questions may need a nuanced, sophisticated approach with many variables. Others may be less complex and require fewer variables to gain insights. Another key consideration is what data to use. Increasingly, life sciences and health care organisations will likely want to evolve from the traditional data they have on hand to drawing from new sources of data from third parties or leveraging it from their interactions with consumers to drive more insights.
Target the tools and services they can provide to different consumer segments. Consumers are increasingly open to using digital tools to help them manage all aspects of their lives, and health care is no exception. New digital tools can play an important role in the future of care—from giving consumers the ability to monitor their own health or that of their family members, to helping them access the most convenient care options through minimising time spent in waiting rooms and possibly doctor’s offices, and helping older adults remain in their homes rather than move to institutional care.
Prioritise communication to the segments that are most anxious about privacy and transparency. Our consumer survey shows that many consumers are becoming more willing to share their data if they see a benefit. Increasingly, health care organisations and developers are working together to give consumers one-stop access to their medical information and control over how the data is shared. Historically, consumers have had to deal with lack of transparency in costs and the value of services in health care, making informed decisions difficult. A more informed, empowered consumer is more likely to make decisions that lead to better health outcomes. But health care organisations should provide transparent, accurate information for this to happen.
Engage patients by segment to earn their trust and address their concerns about sharing their data, voice their unmet needs, and be willing to participate in research. Patient data, obtained from more channels and sources than ever before, can yield relevant insights that can allow companies to craft more targeted and meaningful patient experiences. Digital technologies enable patients to control their health care information and partner in their care decisions. Remote sensors capturing patient data could provide better outcomes data to life sciences companies and health care stakeholders, and behavioral “nudges” could improve patient adherence to treatments or lifestyle. As software and health care converge to create digital therapeutics, this new breed of life sciences technology is helping transform patient care and deliver better clinical outcomes and address unmet patient needs. A better understanding of patient-specific disease characteristics could enable more effective, targeted interventions.
Innovation starts with insight and seeing challenges in a new way. Amid unprecedented uncertainty and change across the industry, stakeholders are looking for new ways to transform the journey of care. Deloitte’s US Life Sciences and Health Care practice helps clients transform uncertainty into possibility and rapid change into lasting progress. Comprehensive audit, advisory, consulting, and tax capabilities can deliver value at every step, from insight to strategy to action. Find out more at Deloitte.com.