The Research Insighter: Doug Cottings, Anthem Blue Cross/Blue Shield (WellPoint)

 

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The Research Insighter Podcast Interview Series 2014 Volume, Episode 2 Guest: Doug Cottings, Staff VP, Market Strategy & Insights, Anthem Blue Cross/Blue Shield (WellPoint) About The Research Insighter The Research Insighter is an executive interview series featuring experts and leaders at the forefront of market research, media intelligence and consumer insights. The Research Insighter is produced by The Market Research Event 2014—the largest and most comprehensive conference in the world dedicated to increasing the business value of insights—taking place October 20-22 in Boca Raton, FL. For information or to register: www.TheMarketResearchEvent.com with Marc Dresner Doug, please tell our audience a little bit about yourself, your role and your responsibilities. Doug: I should note that we recently changed our name from WellPoint to Anthem Blue Cross/Blue Shield. We are the secondlargest health insurance company in the United States. I lead the Market Strategy & Insights Department. It’s a centralized, dedicated team of market research experts. Our team specializes in working with internal clients to help them improve our competitive advantage in these challenging times. Before I joined Anthem I had similar roles at UBS and Bank of America and worked on the supplier side at both GfK and Ipsos. At GfK and Ipsos, I led the financial services practices and also the multicultural practice at GfK. Also, I was Adjunct Professor at Miami

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University and Drake University and taught consumer behavior, marketing research and other marketing courses. The industry you work in currently is undergoing some pretty dramatic change. How has this affected what you do as an insights leader? Doug: I guess I should provide some context before I answer that question. At this point in 2014, the changing environment under the Affordable Care Act—or ACA—is starting to solidify to a degree. It is still very turbulent, but the consumer’s initial response has been simple, straightforward and somewhat predictable. For many years, consumers did not worry about the cost of their healthcare in their daily decisions. Their coverage and a majority of their costs for care were handled by their employers in their place of work. But now— whether they are still part of an employer’s group plan or part of these new Exchanges— it is likely that the consumer’s personal cost related to healthcare has increased significantly. In general, they’re confused as to why and they are not sure what to do to control future costs. “No matter what industry you’re in, a confused consumer generally has a simple response: do not spend.” So, no matter what industry you’re in, a confused consumer generally has a simple response: do not spend. That’s the environment we’re currently in. It is complicated—to try and simplify it—it’s complicated because of legislative mandates. With that as a background, here’s how it has impacted me and my team. The leaders within our company look to us for voice of the consumer, which is typical when they need help answering difficult, thorny questions. So, questions like: “How can our industry help move consumers through a difficult period and help them to be good consumers in the

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future?” or “What will it take for them to have an understanding of their situation and confidence to return to more normal use patterns?” Or another question might be: “How can we help avoid having sicker patients because they have delayed early care because of this inertia and confusion and lack of understanding?” There are many big questions. And now is a great time to understand the current environment and test concepts and approaches that will lead to a stronger future for our company and our industry. Unfortunately, predicting the future by “Past approaches relying on what I used to in the past— approaches that have been tried and true— that have been they are not as effective as they used to be. tried and true are For example, testing new concepts with consumers and then comparing those results not as effective as to results that were collected in years past in they used to be.” normative database comparisons. They are not as meaningful as they used to be. Even if it’s a similar concept, the consumer is so different and the environment has changed so much that it just doesn’t make those comparisons as relevant as they used to be and as meaningful. It’s one of many challenges that we’re facing right now. So, it sounds like projectability is an issue with all the changes taking place. Given these circumstances, what are you doing differently, Doug? How are you handling it? Doug: Everybody wants to know what the future looks like and how they can project business results in the future. Wow. (Laugh) I wish I had a good answer, but what I can say is that we’re doing the best with what we have available today. So, still using the tried and true approaches. They do have value, of course. But, I would say incorporating safety nets within research design. I already mentioned new product development and normative database comparisons. So, we are still doing that, but boy, are we pretty rigid in terms of the time period and how far back that we make comparisons. I would say

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24 months or less—even 18 months or less—in order for them to be incorporated into the analysis and forecast. Also, using control concepts. So, using current offers, products and services that are on the market and incorporating them into the research design so that we get KPIs and those key reads—intent to switch, sign up, understandability, believability, and those types of things—on our existing in-market offers so that we can calibrate. Some of these are just best practices anyway. But we are able to maybe take shortcuts. In the past, we had such strong, solid database comparisons. Going beyond just an ad hoc or the new product development type research, on our tracking and longitudinal studies, of course, so much has changed that we have to—and we are—updating and refreshing our drivers and the attributes that we track. So, the drivers and sub-drivers that we need to use for diagnostic purposes for our existing segments. “So much has changed…” But then we are also working with new people. So, new segments. Really starting from ground zero in working to identify those drivers and all the qualitative and quantitative approaches to get to that so that we load the right things, measure the right things from both the external voice of the consumer perspective and then the internal business stakeholder’s perspective on our study. Of course, modeling, simulators—all of those need to be updated, as well. It’s a lot of work, but we’re getting there. Another quick point. Of course, there is a lot that goes into this, but boy, are we attempting to leverage technology in ways that we hadn’t before just because there is such a need. Manually sifting through stacks of raw data could be compared to panning for gold. So, we are using things like text “Boy, are we attempting to leverage technology in ways that we hadn’t before.”

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analytics and other technology because it is more the equivalent of a state-of-the-art screening plant. We have scarce resources like everyone else and there are so many huge questions out there. So, we are getting our hands on anything that we can through technology, analyzing social media sentiment and open-end, qualitative blogs, whatever, to help merge with our quantitative analysis to help predict where the market is heading. You have to get a lot more creative, obviously. Given the lower certainty that you’ve outlined for us, how is that affecting your relationship with internal clients? They obviously have certain expectations. And then on the flipside of that, how is it affecting your relationships with suppliers because you really do have to change a lot of things that you do? Change them up methodologically and so forth. Can you tell us a little bit about that? Doug: I would say it has changed our relationships with both internal business partners—internal clients—and external partners/suppliers. I would say pretty dramatically, but again, all for the better. I would say that we are much more collaborative today than we were even in just the recent past. Tomorrow we will be even more so. So, collaboration is so important. “Our relationships with both internal business partners and external partners/suppliers have changed dramatically.” To be direct, we can use all the help we can get. (Laugh) So, partnering with internal clients and suppliers is so important in order to be successful. We need fresh thinking; we need healthy, constructive debates for additional points of view as we face these challenging business questions. But, specific to internal clients—as you’ve alluded to already— managing expectations is very important as far as, for example, volumetric forecasts. We have to make sure they understand that in

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this environment, upfront, we are going to do better than a toss of a coin here, but it’s not going to be as good as you may have had in years past in more stable markets. Intuitively, most people get it, but it’s amazing if you don’t address it upfront. There is confusion at “We are going to this point as they get closer to wrapping do better than a things up. We try to validate and improve. coin toss, but...” It’s an iterative process to get them to understand that it goes a long way. But also, both with internal clients and suppliers alike, this is all about changing the business for the better. So, even though it is challenging, getting closer to end-business outcomes as far as “here’s the voice of the consumer,” but also here’s how what they say links to end-business outcomes. That is so much more important today than ever in this environment. Even though it’s more challenging, at least having that line of sight and making the attempt goes so far in enhancing relationships and delivering value and representing the consumer, which is so important in these times. As far as suppliers, any significant changes on that front? I’m sure that you have some preferred vendors in your stable? Doug: Definitely we do. We have wonderful partners that we have been working with for years. I may have alluded to this, but ensuring that we have fresh thinking. We are leveraging new approaches in technology that are appropriate for our business objectives. We have to be having those conversations with other suppliers. And keeping the door open to conversations when we have very little time to do so is something that is important. We do have great, wonderful suppliers that we partner with. And quality, accuracy. So important. Rigor. So important in this environment. This industry is highly legislated. We have to work with people we trust. It’s not just chasing whatever new approach. We have to make sure that the on the service side the accuracy, the discipline, that the rigor is there, as well.

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Right. So, they need that vertical expertise. Doug: Definitely. Doug, thank you for your candor and for a really insightful and refreshing point of view. Doug: You’re welcome. Thanks for making this so easy. It’s always an interesting topic and I’ve enjoyed the conversation. Doug Cottings will present “Leading Insights in Times of Change” at The Market Research Event 2014 taking place October 20-22 in Boca Raton, Florida. For more information or to register, please visit us at www.themarketresearchevent.com Until next time, I’m Marc Dresner and you have just heard the insight scoop. ABOUT THE INTERVIEWER Marc Dresner is IIR USA’s senior editor and special communication projects lead. He is the former executive editor of Research Business Report, a trade publication for market research professionals. He may be reached at mdresner@iirusa.com. Follow him @mdrezz.

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