Health insurer Highmark has enrolled thousands of new members and reduced marketing costs by more than 60% by streamlining its direct response initiatives.
Between 2010 and 2011 Highmark recorded a 32% response volume increase over the prior year while its cost per response fell 3% and cost per member fell 14%, says Tom Reid, an executive director of the Hacker Group, Highmark’s agency.
This is a continuation of a project that began three years ago for the Pittsburgh-based provider of supplemental Medicare plans. A Blue Cross Blue Shield licensee, Highmark has 4.8 million members in Pennsylvania and West Virginia.
This was all accomplished primarily though streamlining the company’s direct mail, DRTV and newspaper freestanding insert efforts. Highmark’s marketing databases were also consolidated into one central location.
These plans offer coverage for benefits such as prescription drugs which Medicare does not provide.
Highmark increased its direct mail from 1.1milion pieces sent entirely to compiled lists of persons ages 65 and over to 3.2 million sent to a combination of compiled files and such response files as magazine subscribers, says Reid.
These pieces were all sent many times during eight weeks at the end of the year, the only time legally when people are allowed to change Medicare plans.
Previously, Highmark only sent mail once during this period, Reid says.
In addition to stepping up direct mail, Highmark also changed its use of television. “We ended up running far more spots but we did it more efficiently increasing the number of spots shown by 30% but we reduced DRTV expenditures by 25%,” he says.
One way Highmark did this was by cutting out 90- and 120-second commercials in favor of 30- and 60-second spots.
For all of its efforts, Highmark legally is only allowed to get basic information such as the names of people and whether they live in the service area of the plans. Nothing is available about medical conditions.
“The more sophisticated marketers begin to capture some additional information about what the individuals’ concerns are,” says Reid. Those include such things as the degree of coverage, the number of doctors and hospitals available locally and whether they can elect their own specialists.
Highmark also consolidated its various marketing databases to give it a more accurate view of customer activity.
“Before we worked with them they weren’t holding that data in a single place,” he says, noting that some was kept at a data processing company and others at a telemarketing agency.
“By bringing all that together you have a much more accurate way to attribute cause and effect between the solicitation vehicle, response vehicle and ultimately what caused a member to enroll,” says Reid.
Highmark also reworked the FSI strategy, dropping about 30% of the newspapers in the two states and focusing on the best responding and cost per response, says Reid.
One of the key changes in all the materials was that Highmark changed the copy from promoting plans such as health maintenance organizations and preferred provider organizations to emphasizing the services that the plans could provide.
“People are not looking to buy an HMO or a PPO—they don’t know what that means,” says Reid. “They’re looking for a solution. They need better Medicare coverage.”