The “Customer Advocacy Score” is becoming common as part of marketing and business intelligence for a wide range of firms.  It is particularly useful for firms which rely on a large portion of repeat, even continuing customers, in industries where customers are ‘highly involved” in their supplier relationships because of the importance of the products or services provided.  Banks and other financial service firms, and healthcare providers fall easily into this category.

In population or employee health management (PHM or EHM), insurer and employer clients are sure to be highly involved in their supplier relationships, because of both the amount of economic impact available through these strategies, and the amount of trust that and cooperation that is essential between them and their supplier.  Clients share all kinds of sensitive information with such suppliers, to say nothing of the even more personally sensitive information shared by their employees, where health-plan member or employee trust is essential to gaining adequate participation in PHM or EHM.

A 2007 survey by Forrester Research, Inc. involving more than 10,000 Europeans in seven countries found that only 27% of respondents rated their own banks high in terms of “customer advocacy”, the same percentage as in 2006.  Customers that rate banks’ customer advocacy high are far more likely to turn to that bank for other products and services, while banks with high scores outgrow their lower-scoring rivals significantly, without having to rely on mergers and acquisitions.  [J. Compton “Advocacy Strengthens European Banking Relationships” 1to1 Weekly, Dec 17, 2007]

The score is based on where customers place their bank on a continuum from “Does what is best for its bottom line, regardless of its impact on customers” to “Does what is best for customers, regardless of its effect on its bottom line”.  Firms whose customers’ score them toward the latter pole are considered to have far better scores than those whose customers score them toward the former. [B. Doyle “Customer Advocacy 2006: How Consumers Rate Their Banks, Brokerages, and Insurers” Forrester Research Business View Trends, May 22, 2006]

For healthcare organizations (HCOs)considering entry into the PHM/EHM market, learning how prospective clients, i.e. insurance plans or employers, rate them on customer advocacy, particularly in comparison to other suppliers already active in the market, may help in deciding whether to make the entry, and which prospects to try first.  Learning how consumers rate the organization may also prove helpful, since if they don’t rate the HCO well on this dimension, it is unlikely it will be able to enroll many targeted plan members or employees in an intervention program, even if the client is won over.  And without high participation, success is both less likely and sure to be less delightful for clients.

Since HCOs have been sources of double-digit inflation in sickcare costs for a long time, both employers’ and insurers’ views of them may be somewhat jaundiced.  Employers may be a far better prospect, in any case, since they can gain far more in economic benefits – through improved productivity and performance, turnover reductions, and even increased customer satisfaction and loyalty – while insurers are focused on reducing healthcare expenditures.  Moreover, since reducing insurers’ expenditures tends to cost dollar for dollar in HCOs’ revenue, this class of payer is nowhere near as attractive.  By contrast, employers gain more by reducing productivity and performance impairment than by cutting healthcare costs, so need not affect HCO’s sickcare revenue nearly as much.

Where HCOs are successful in gaining employer clients, checking their perceptions of the HCO’s commitment to their interests vs. the HCO’s own should be a good predictor for retention vs. defection of these clients.  Learning why consumers as well as clients rate the HCO high or low will also help in either maintaining good ratings or improving poor ratings, and thereby gaining an improvement in future attraction of new or retention of current customers. Learning why they rate rival suppliers good or bad on the scale will also provide useful “competitive intelligence” about the market.

In any case, learning how the HCO is rated by prospective clients as well as consumers, will greatly assist in making decisions about the PHM/EHM market.  Learning how its own employees rate it on “employee advocacy” can also help in deciding whether to invest in internal EHM, or even in an outsourced program, since trust in the HCO as an employer will be key in achieving high participation in either case.  Helping employer clients to check their scores on this same dimension will also help in their decisions, and perhaps justify the high level of employer support required when HCOs are suppliers and the employers the clients.