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CRM in Health Care Is Gaining Momentum CRM is a strategy that enables greater customer insight and more effective interactions, and it fosters customer-satisfying behaviors. by Joanne Galimi Gartner, Inc. C urrent marketplace dynamics reveal a predominant and The Three Key Business Processes of CRM growing customer-service focus in technology adoption. CRM comprises the following three major business processes: Health care organizations must view customer service 1. Sales, also known as technology-enabled sales (TES), refers based on CRM and pursue strategies to enhance and maintain to the application of technology to enable selling through all customer satisfaction. The rise of consumer-driven health care, sales channels, including selling partners and the Web. as well as the increased consumer demand for accurate and Opportunity management systems (OMS) lay the frametimely issue resolution, has forced health care organizations to work for a TES application solution. An OMS is a combined focus on front-office technologies to streamline processes and business planning, forecasting, and account management increase customer satisfaction. Many health care organizations system. It is the backbone of a multichannel TES system are finding that old ways of doing business no longer foster enabling B2B selling across field sales, inside sales, and strong customer relations. external sales channels. CRM is more of a journey than a set of tools. CRM is a 2. Customer Service and Support is responsible for retaincustomer-focused business strategy designed to optimize profing and extending customer relationships once a product or itability and customer satisfaction. To realize CRM success, service is sold. Customer service and support (CSS) applihealth care organizations must foster behaviors and implement cations are front-office systems with back-end links to supprocesses, applications, and technologies that support coordiport a customer-centric environment. These applications nated customer interactions throughout all communication support and manage relationships with external customers channels. CRM offers health care organizations the opportunity (such as members and physicians) and internal end users. to improve existing relationships and define new long-term Functions within these applications include call tracking customer relationships. and escalation, configuration and workflow management, CRM transformation begins when a health care organization problem resolution, and knowledge bases. chooses to become more customer-centric and addresses IT 3. Marketing, also known as technology-enabled marketing requirements along with the change management (people and (TEM), involves analyzing the marketing process and processes) necessary to transform the enterprise. Executing a automating it for the customer relationship cycle (selecCRM strategy requires long-term planning, synchronization with tion, acquisition, retention, and extension). TEM requires a market dynamics, and resource commitments. To form the founproactive strategy for using information and IT in marketdation for a dramatic shift in customer-interfacing behaviors, ing efforts using data management, mining, analysis, and health care organizations must have integrated systems and reporting tools. share common customer-interaction channels. To produce true business transformation, health care organizations must ultiThe business processes that support CRM offer health care organimately succumb to the challenge of re-engineering their culzations the opportunity to enhance customer service and embrace tures, processes, and IT environments. one-to-one customer management. While the three business CRM technologies enable greater customer insight, increased processes that support CRM are critical for all industries, they are customer access, more effective interactions, and integration applied in a unique way to health care. Most industries are productthroughout all customer channels and back-office enterprise driven and revolve around brand, price, and quality. They have a functions. CRM is a business strategy organized around customer segments Joanne Galimi is a research director in Gartner’s research organization. Prior to joining Gartner, she was part that fosters customer-satisfying of the strategic planning team at Harvard Vanguard Medical Associates in Boston. Ms. Galimi has extensive behaviors and implements customerhealth care experience, with primary focus in the managed care market in areas of system selection and centric processes. implementation, business process re-engineering, strategic planning, and customer relationship management. 188 • crmproject.com INTELLIGENCE sales-driven model that deals with tangible products, and they have the ability to create demand. Product-driven industries rely on CRM to understand consumers and increase sales. Health care, on the other hand, is uniquely service driven and requires health care organizations to understand consumer utilization or medical service needs and the associated costs. For health care organizations, CRM provides the opportunity to create relationships and involve the customer in more active patient care management. Health care organizations must understand how these business processes are defined within the context of health care and apply them to fit a service-driven industry. Health Care Stakeholders The drug companies frustrate many prominent physicians. Our most frequent response from physicians regarding their pharmaceutical reputation is, “When will you show up offering us unobtrusive tools that enhance the process of ‘doctoring’?” The current list of large CRM pharmaceutical vendors is most focused on enabling sales representatives to manage samples, comply with Food and Drug Administration regulations, and understand physician prescription history and influence. They fail to provide the physician or patient with the crucial self-help capabilities needed for unassisted informed decision-making. For health care organizations, CRM provides the opportunity to create relationships and involve the customer in more active patient care management. Another unique factor in health care is the different types of organizations and stakeholders. In the health care industry there are pharmaceutical companies, health care payer organizations, and care delivery organizations (which consist of hospitals, medical groups, and physicians). The stakeholders among the three types of organizations are members, patients, physicians, and consumers (potential members and/or potential patients). In addition, CRM adoption varies widely between pharmaceutical companies, health care payer organizations, and care delivery organizations (CDOs). This is due to budgetary issues, a lack of knowledge regarding CRM strategies, and many unproven vendor solutions in health care. Unlike product-driven industries (such as retail and manufacturing), where substantial benefits for CRM are being realized, health care continues to lag in CRM success. An effective CRM approach is critical to competitiveness as pharmaceutical vendors exploit new communication channels and management strategies. Managing and understanding data is the basis for forming relationships with all stakeholders. Pharmaceutical organizations are realizing that data obtained during the clinical trial process can be used for CRM. Technology can help lay the foundation for CRM by improving the accuracy of the data collection process, as well as the analysis and report preparation processes. Technology also organizes the information into more-easily accessed and manipulated data stores. Sales Pharmaceutical Companies Pharmaceutical companies must provide information and services to a wide range of stakeholders, including consumers, physicians, payers, and care delivery organizations. Pharmaceutical companies are aggressively purchasing CRM solutions from large vendors that offer the full suite of products, including sales, marketing, and customer service capabilities. These products are proven in other industries and best fit the needs of pharmaceutical companies developing and selling a specific product. Pharmaceutical companies are planning a gradual migration to a more robust Internet-built set of CRM modules to drive down both IT and sales and marketing costs, while keeping in step with elevated client demands. A new generation of products for self-service and personalization, together with traditional sales, marketing, and service products, will make it possible for organizations to migrate from both “homegrown” systems and packaged applications with complex and outdated architectures. Pharmaceutical organizations are actively deploying sales applications to sell more to existing customers and extend the duration of customer relationships by providing products and services that are designed to meet specific customer needs. By enforcing product, pricing, and business rules, sales applications: take the complexity out of selling; assure that the right product configuration is selected and that only appropriate valid options can be used; and deliver correct pricing, quotes, proposals, and accurate orders on demand. CSS Customer service and support applications and contact center technologies are allowing pharmaceutical organizations to manage, synchronize, and coordinate service, support, and sales interactions across a broad range of communication channels. Web-based solutions for customer service are also allowing users self-service and assisted-service over the Internet. Applications and solutions in today’s market are designed to leverage a Defying the Limits • 189 >>> CRM in Health Care Is Gaining Momentum company’s existing investment in telephony and systems infrastructure, while enabling rapid deployment to the organization’s contact center. Marketing Pharmaceutical organizations are taking advantage of marketing applications for customer analysis and marketing automation. They are using the software to analyze customer behavior patterns and insights, and implement those insights through personalization and outbound marketing. In addition, it is critical for pharmaceutical organizations to streamline event lead-generation and evaluation. Many pharmaceutical organizations are creating real, measurable sales opportunities. Event management solutions are being deployed to automate pre- and post-campaigns, as well as at-event lead capture, lead-value determination, and quick distribution of leads to sales. Study results from clinical trials are being used to facilitate data mining and trends analysis to support ongoing marketing initiatives. Word-of-mouth marketing, facilitated by access to sponsor-provided chat rooms, can also be a result of providing a good experience for patients. Physicians who were active participants in clinical trials can be targeted to encourage prescription writing for key drugs. organizations have discovered that applying today’s technology and best practices ensures tomorrow’s customer base. No longer can payer organizations sit back and miss opportunities to attract members or expect unsatisfied members to continue to use the payer organization’s services. Sales Unlike product-driven organizations, payers currently rely little on direct sales to individual consumers. Large employer groups select and monitor health plans and pay the premiums. Today, some employer groups are placing more responsibility on employees and allowing them to evaluate and select health Managed care is a highly competitive market, and new technology has irrevocably changed the landscape in which enterprises compete for and retain customers. Health Care Payer Organizations Health care payer organizations (payers) interact with numerous stakeholders, including members, consumers/potential members, brokers, and care delivery organizations (hospitals, physicians, medical groups). Each entity requires a payer to create a CRM strategy to meet the unique needs of each stakeholder. Payers are deploying niche solutions, including CSS applications and TES applications. TEM has not gained momentum because of a lack of proven solutions in health care and the lack of interest from payers due to other business and technology priorities. In addition, payers are taking a phased implementation approach to CRM and are avoiding the implementation of a suite of products that support all three business processes (CSS, TES, and TEM). The reasoning behind this phased approach is the lack of preparedness and resources to implement the full suite of CRM-related products, and there are no proven suite solutions in the health care market. Managed care is a highly competitive market, and new technology has irrevocably changed the landscape in which enterprises compete for and retain customers. Health care payer WEB LINK Read about some of the keys to building stronger relationships with your customers in Dave LaPlante’s interview in this book and on the Web at www.crmproject.com. 190 • crmproject.com plans individually. As sales models in health care evolve to a more direct sales focus, payers are increasingly turning to the Internet as a sales distribution channel. TES applications are being implemented to support the full sales process as well as Internet functionality, including quotations, underwriting, billing, enrollment, and workflow tools. TES applications are designed to streamline the internal and external sales process to increase revenue, market share, productivity, and agent and customer satisfaction, and to reduce costs. Payers are also actively looking to opportunity management systems (OMS) to manage revenue-generating sales activities. Visibility is a must in any economy, and is even more important in a tough economy. Given this, every payer needs the ability to manage sales opportunities. OMS systems provide capabilities such as call scripting, account/contact management, event tracking, lead distribution, forecasting, and pipeline management. CSS To increase customer satisfaction and support self-service capabilities, payers are actively deploying CSS applications. CSS applications enable payers to track, manage, and report information in a timely, flexible, and even proactive manner. CSS is also able to automate front-office business processes, provide data/information flow integration among business functions, facilitate fast and flexible access to critical information, support business rules workflow, and support new communication channels. Payers are also implementing contact center technologies such as email response management systems (ERMS), interactive voice response (IVR), Web call-through, collaboration, and text chat. Payers are prioritizing the adoption of these contact center technologies based on the context of their CRM strategies and on their degree of risk acceptance and how the technology might INTELLIGENCE positively affect productivity, contribute to customer intimacy, or make an enterprise more proactive in addressing customer needs. Marketing Marketing techniques are being applied to medical management, whereby payers use technology to support, profile, and predict utilization and cost with the goal of directing members to the right intervention and thereby improving outcomes. The key is to understand both the clinical and psychosocial characteristics on patients. TEM, especially via the Internet, is critical in the development of collaborative medical management. Care Delivery Organizations Many care delivery organizations (CDOs) realize that the “C” in CRM does not stand for just customer or consumer. There are multiple stakeholders, and each requires the creation of unique CRM strategies and solutions. The key CDO stakeholders include: patients, health care payer organizations, pharmaceutical companies, and consumers/potential patients. Providers are lagging behind in implementing CRM because of an unclear understanding of how CRM can be related to providing a service to each stakeholder and not a specific product. Because CRM is rather immature for CDOs, there are few vendor solutions in the health care market that target a specific stakeholder, never mind all CDOs stakeholders. CDOs need to know everything about their stakeholders and their needs. The business processes that support CRM offer CDOs the opportunity to enhance customer service and embrace one-to-one customer management. CDOs are slowly progressing tient arena, CDOs should focus on Web-enabling their scheduling applications to enable customer self-service, so that they may attract new customers with little incremental cost. In the inpatient arena, CDOs with business intelligence analytics will be capable of offering preferential service to referring physicians during periods of underutilization to improve patient censuses. In the payer organization arena, superior business analytics will give providers better tools to understand their costs during the contracting process. Marketing Most CDO marketing efforts are on health promotion and preventive medicine. CDOs are formulating branding strategies and developing online and offline marketing campaigns. The single greatest area of TEM in the provider marketplace is the coordination of the CDOs’ online marketing strategies. CSS CSS applications include nurse-on-call applications, billing support applications, and contact center technologies (IVR, CTI, ERMS). CDOs have tremendous administrative overhead costs tied into coordinating patient care activities (e.g., patients, referring physicians, payer organizations). Each of these stakeholders has different needs, requirements, and roles in the patient care process. One of the most significant cost categories for CDOs is the expense of labor to coordinate these players. Furthermore, many of the most vocal complaints by consumers and their providers involve poor customer service related to insurance processing and bill payment. CDOs are also developing portals as a communications channel to manage interaction between patients, physicians, hospitals, and health care providers to increase customer loyalty, reduce costs, and increase market share. The portal can supply visitors with specific health care information, services, and benefits (e.g., online prescription orders, health risk assessments, chat rooms, and the ability to communicate via email with physicians). Enterprises no longer view their customer base as a homogenous collection of revenuegenerating units. Instead, they want to be more personal with clients. toward CRM strategies that incorporate Web-based consumer self-services (e.g., registration, scheduling, bill payments), online marketing campaigns, and customer service initiatives. Sales CDOs are turning to the Internet as a sales channel for customer acquisition. A technology-enabled customer acquisition strategy not only involves automating the customer-acquisition and sales process, but also determines which customers should be targeted and through which channel. This requires CDOs to be far more proactive in their customer-acquisition strategies. Many CDOs are focused on implementing enterprise scheduling and registration systems as the core of their customer acquisition strategies. In the future, these goals will become more far-reaching. In the outpa- Bottom Line Enterprises no longer view their customer base as a homogenous collection of revenue-generating units. Instead, they want to be more personal with clients. As the health care organization grows, however, it becomes increasingly difficult to provide personalized levels of service. CRM projects focus on integrating and leveraging all of a company’s outward-facing actions to acquire new customers, retain existing ones and, most importantly, identify the most profitable prospects. Acting on the notion that effectively managing the customer relationship from initial contact through follow-up services yields the greatest chance of keeping customers satisfied, companies are deploying CRM-enabling technologies, such as call center software and self-service Web sites, to please the “never-satisfied customer.” ■ Defying the Limits • 191 If you would like more information regarding this company’s products or services, please fill out the Request for Information. If you would like to help us improve our web site, please fill out the Reader Satisfaction Survey. Reader Satisfaction Survey First name Last name Email How would you rate this web site? (1 is poor, 5 is very good.) 1 2 3 4 5 What would you like to see more information on (check all that apply)? 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