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Leveraging Brand Equity to Succeed on the Health Insurance Exchanges

young couple shopping health insurance exchangesAs the original March 31 deadline looms for securing insurance on the Health Insurance Exchanges, the number of people who have enrolled topped 6 million — lower than the Congressional Budget Office’s initial projection for needed enrollment, but an achievement for the Obama administration after the ACA’s rocky roll-out. An aggressive marketing campaign was able to drive 1.5 million visitors to the HealthCare.gov website and nearly a half million people to contact call centers on Wednesday this week.

Top government officials and hired celebrities touting Obamacare to younger, healthier consumers seemed to do the trick. Twenty-five percent of enrollees are in the coveted 18-34 age group, though the administration had hoped that number would be closer to 40% to offset the risk of covering older adults with health issues.

The administration is bringing consumers to the dance; insurance companies competing on the Health Insurance Exchanges need to court these consumers so that they are chosen among all the options.

The Importance of Brand Equity for Health Insurance

Differentiating a health insurance plan on anything but price can be challenging when benefits are standardized on the Exchanges.  Brand equity is extremely important for a health insurance company to cut through the clutter and compete on value. Consider the equation:

Value = Equity + Performance
       Price

Equity is a brand’s differentiating characteristics and image in consumers’ minds, and Performance is the extent to which a brand delivers against consumers’ expectations. If a product/service costs more, perceived value can still be higher if that product/service has a superior brand image.

How important is the brand image of health insurance companies to consumers? In a confusing category — especially one that is charged with emotion — consumers default to the familiar. 

For perspective, the 2013 c2b Consumer Diagnostic examined the importance to consumers of 33 health insurance attributes, and brand image was clearly essential. 4,184 respondents in the national study rated the following attributes as Extremely/Very Important:

  • Is one that I can trust  (83%)
  • Will be here for me in the future when I need care (82%)
  • Has a good reputation (79%)
  • Makes me feel like they care about my health (72%)

Brand Equity and Younger Consumers

Younger consumers are critical for enrollment, so how do they value brand equity? While the percentage of respondents answering Extremely/Very Important climb with age, brand image-related attributes were still prioritized among the younger set. 

The following table presents the number of respondents who answered by age range. Letters are assigned to each age range/column for statistical comparison; a letter under the percentage corresponds with the respective column denoting a statistical difference at 95% confidence. 

For example, 84% of respondents age 45-54 indicate that it is Extremely/Very Important that an insurance company be “one I can trust.” This is a statistically higher number than the 76% of age 18-24 (column a) and age 24-34 (column b) who answered the same way.

Attribute

Extremely/Very Important

18-24

25-34

35-44

45-54

55-64

65-74

75+

n = 522

n = 764

n = 724

n = 821

n = 682

n = 397

n = 274

a

b

c

d

e

f

g

Is one that I can trust

76%

79%

80%

84%

ab

88%

abcd

90%

abcd

93%

abcde

Will be here in the future when I need care

73%

76%

79%

a

84%

abc

87%

abc

91%

abcd

92%

abcde

Has a good reputation

72%

75%

77%

a

81%

ab

83%

abc

88%

abcde

86%

abc

Makes me feel like they care about my health

69%

67%

69%

73%

b

74%

bc

80%

abcde

76%

bc

Three quarters of younger consumers believe these brand image attributes are of utmost importance, and a health insurance company should be mindful of building a strong brand among this population.

However, a health insurance company needs to also consider that younger consumers are not all alike. c2b solutions’ research found that consumers can be classified as one of five psychographic segments with differing approaches to health and wellness. Two segments — Balance Seekers and Self Achievers — are proactive and wellness oriented (but for different reasons) while other segments are reactive to varying degrees and not as invested in their wellness.

There are significant differences in how each psychographic segment prioritizes these brand image attributes. Willful Endurers, the most reactive and least health-invested among the segments, place less priority on the attributes (though they are still important).  Self Achievers are the most proactive segment, dedicated to prevention and healthy living, and place the highest importance on brand equity. 

Attribute

Extremely/Very Important

Balance Seekers

Willful Endurers

Priority Jugglers

Self Achievers

Direction Takers

 

n = 711

n = 1,107

n = 733

n = 953

n = 532

 

a

b

c

d

e

 

Is one that I can trust

90%

b

74%

87%

b

90%

bc

92%

bc

 

Will be here in the future when I need care

86%

b

74%

85%

b

90%

abc

89%

bc

 

Has a good reputation

83%

b

71%

80%

b

88%

abc

88%

abc

 

Makes me feel like they care about my health

78%

bc

66%

 

66%

82%

abce

76%

bc

 

A health insurance company’s strategies will dictate the consumer segment it should target for acquisition and loyalty. If Self Achievers are consistent with these strategies, it is imperative the company invests in its brand image.

One must keep in mind a brand isn’t a logo or catchy jingle. A brand is comprised of consumers’ total experience at every touchpoint. This includes customer service, wellness programs, approved services in the doctor’s office, ratings & reviews and yes… advertising.

Each segment has its preferred method of education and communication — “Words to Use and Lose” and media — that resonate positively and help them learn about health insurance companies. A health insurance company that wants to succeed in the new consumer-centric marketplace will be well-served to understand these preferences.

Psychographic Segmentation and its Practical Application in Patient Engagement and Behavior Change

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