A member's health journey is top of mind. Healthcare payers and partners should consider the evergreen metric of Customer Lifetime Value (CLV). Industry leaders can focus on Customer Experience Transformation (CXT) and put member needs at the heart of their strategic planning and operations to optimize and improve their membership’s CLV.
Members expect healthcare experiences to emulate the level of service and ease of other experiences from the world of retail and beyond. Since 2019, healthcare industry disruptors such as Amazon, Apple, Google, and Walmart took significant steps to improve the efficiency and accessibility of healthcare
. The pace of change is unprecedented. According to Forbes research
, customer experience is a discipline driving growth and revenue at companies across the globe. As such, Customer Experience Transformation (CXT) spending is expected to reach $640 billion in 2022.
And payers are responding—with 81% saying the pace of digital transformation for their organization is accelerating. To best allocate funds for this transformation and drive benefit for the organization, start with a deep understanding of your member experience. Carefully evaluate digital front doors, apps, and other “silver bullet” transformations as part of larger member-first efforts to drive transformation. Customer Lifetime Value (CLV) acts as a guiding metric to benchmark, plan, and measure progress.
Transformation: Reaching beyond the digital front door
Increasingly, payers shift focus from internal processes and point solutions to the larger picture of member experience. Delivering exceptional experiences requires front-office and back-office transformation—and bringing customers in the “front door” doesn’t guarantee they will stick around.
We define CXT as transforming your values, structures, operations, technology, and culture to obsessively focus on meeting the needs of your customers. These members interact across myriad touchpoints outside of the website or other digital channels along their healthcare journey. The key is to identify and understand the critical moments in the member’s journey to raise awareness of offerings and pre-emptively answer questions to guide your member to choose health plans, programs, health networks, and benefits that best serve them. So, where can you start?
Unlocking the benefits of understanding your member
The member journey is critical, and CXT can be an overwhelming and large investment if thought about as one continuous program. Instead, we recommend using CLV as a metric to aid in understanding and tracking investment in CXT.
How is CLV calculated? Calculating a customer’s lifetime value includes several factors across plans and/or states.
All payers may have slightly different approaches and inputs. We highly recommend customized processes and organization-wide buy-in to set this equation. However, the following are some key criteria to consider as you formulate CLV:
- Average acquisition costs
- Average customer profit
- Member retention rate
- Average lifetime in years