Following my last post I have a few more thoughts on segmentation and the impact it has on driving successful health and wellness incentive and communication programs.

In order to be of value, segments must be:

1) Identifiable: distinctly different on measurable variables
2) Substantial: large enough to matter
3) Accessible: reachable through a variety of communication channels
4) Stable: persist over time
5) Responsive: respond to efforts aimed at them
6) Actionable: differences are able to guide communication and reward strategies

In my last post I spoke briefly about the fact that organizations tend to use the health status pyramid or grid (see below) as a starting point for a segmentation strategy.

However, another method of beginning a segmentation strategy could be based on current and potential value of a participant in a specific health and wellness track.

The segmentation strategy sets the framework for whom, how and what the organization wants to communicate and reward. Essentially, segmenting a wellness participant population into more finite segments will enable an organization to better understand 1) how to engage their members, 2) direct the appropriate health management efforts, 3) identify which rewards will have the greatest impact on that population and 4) determine how to make communications more meaningful.

Talk, treat and reward differently. But how do organizations talk, treat and reward differently? The simple answer is the use of segmentation. Segmentation occupies the middle ground between mass marketing and one-to-one marketing methodology. As I have referenced in a previous post prescriptive one-size-fits-all wellness programs are being seriously challenged as organizations continue to struggle with low participation and engagement rates.

As an increasing amount of health data becomes available, employers and health plans are spending more time mining data in an effort to better understand the healthcare issues of their population. However, additional data points beyond health data are being considered in trying to better understand an organization’s unique population. The result: an increasingly narrower set of population segments where wellness interventions and communications are created to better fit the unique needs of those segments.

One of the challenges that organizations continue to face is in determining 1) the most appropriate approach to take, 2) how to begin the segmentation process and 3) what data they need to accurately segment the population.

A common approach has been to utilize the health status pyramid below as a method of segmenting.

While this may be a good place to start, my clients are beginning to acknowledge that the health status pyramid is still too broad to effectively engage their population in optimal health interventions. Additional research and methods of analyzing the data will be necessary to develop more like-to-like segmentation strategies. That additional data may include claims data, activity data, demographics and attitudinal and behavioral data.

Organizations may want to consider some of the following best practices in order to develop effective wellness and disease management segmentation strategies. While these practices seem like common sense, often times they are overlooked and these basic principles often get bypassed in the haste to get to market.

1) Define and measure success: build benchmarks and hurdles up front to drive growth
and ensure the ability to measure program effectiveness.

2) Talk with, treat and reward participants differently. Consider developing a
segmentation strategy based on “value” that leverages participant differences.

3) Differentiate your health interventions and communications by segmented campaigns
to drive participation and engagement.

4) Ignore unprofitable participants. Those that are already catastrophic will continue to
cost substantially more than any wellness program can mitigate. Place investments in
segments that will yield the most value.

Segmentation is becoming a critical success factor in wellness and disease management programs for several reasons. Understanding how participant types are different allows for a more effective health interaction because:

• Segments whose members think differently might be persuaded differently to engage in the use of health services.

• Segments with different needs allow health managers and health plans to address those needs more directly.

• If segments differ in demographics, health status and readiness for change that enables health managers and health plans to target unique messages to them that may have a more sustainable impact on engagement.

Are your organizations using a segmentation strategy in its health and wellness program design?