CRM Strategy for United Behavioral Health: IDIC Framework

Executive Summary

Customer relationship management (CRM) is an essential component of organizational management. The purpose of this discussion is to focus on a CRM strategy for United Behavioral Health (UBH), a subsidiary of United Health Care. United Behavioral Health is dedicated to providing customers with high-quality, cost-effective, managed mental health and substance abuse services. The investigation suggests that the company's core values have been successfully implemented into its CRM strategy.

The current CRM strategy utilizes technology to allow customers to voice their opinions. The company's website provides a page that offers help to members experiencing problems, and it provides customers with "coaches" who can assist whenever issues arise. The company's customers are currently divided into three groups: the employer division, the health plan division, and the public sector. Testimonials from customers indicate high levels of satisfaction with the care and attention they receive. In the future, the company aims to implement a strategy that provides customers with account access, ensures the secure flow of customer information, allows customers to ask healthcare questions and receive answers online, and delivers efficient healthcare services to as many customers as possible.

The discussion suggests that identification and differentiation are essential to building a successful CRM strategy. To properly serve customers, the company must have as much information as possible, including medical records that reflect current and past medications. Proper customer identification can lead to greater customer satisfaction.

Differentiation is also essential. Customer value is identified as the most prevalent method used to differentiate customers. Differentiation is important because it allows organizations to allocate resources toward their most valuable customers.

The new CRM strategy is designed to address many issues, including the customization of services. Improvements include new software and a database of accurate customer information. The IDIC design will incorporate the new strategies discussed throughout this report. These improvements include an identification process that places customers into categories arranged by shared characteristics, a differentiation strategy utilizing a new valuation model based on future earnings, retention rate, profit margin, acquisition rate, and cost of acquiring new customers, an interaction strategy featuring improved dialogue and a drip-irrigation approach, and a customization strategy for the employer division using courtesy calls and mailings to inform consumers of policy or plan changes.

Introduction and Company Background

Customer relationship management is a key component of organizational management. Ensuring that customers are satisfied with the services and products they purchase should be at the forefront of strategic goals at any firm. The purpose of this discussion is to develop a CRM strategy for United Behavioral Health.

United Behavioral Health is a subsidiary of United Health Care. UBH was established in 1985 with the sole purpose of assisting clients with the management of their behavioral health care services. UBH is dedicated to delivering high-quality, cost-effective, managed mental health and substance abuse services to its customers. These services evolve and respond as the field of health care management changes. UBH offices are located throughout the country, with corporate offices in Minneapolis, Minnesota. Each center is divided into different markets. For example, one division—Group South—has its headquarters in Coral Gables, Florida, and serves Florida, Maryland (Mid-Atlantic), Rhode Island, New York, New Jersey, Connecticut, and Virginia.

United Behavioral Health's mission is to improve the mental health and well-being of individuals. This mission is supported by three closely related goals: (1) to provide quality services to patients and customers; (2) to control costs through clinically proven treatment programs; and (3) to develop and manage a system that is attractive to health plan customers.

UBH's vision is focused on improving members' lives through professional service and quality care. Its core values include: responsiveness, compassion, and advocacy for those affected by mental illness and substance abuse; respect for the dignity and privacy of individuals; prevention and education; honesty and integrity; operational excellence; and continuous learning and innovation.

Current CRM State

The current CRM strategy utilizes technology to allow customers to voice their opinions. The company's website provides a page that offers help to members experiencing problems. A "help a member" tool allows customer service representatives to assist customers by providing links to healthcare providers, enabling policy reviews, and allowing customers to complete surveys.

The current system meets some customer needs by enabling inquiries about available services and allowing consumers to participate in surveys that help the company better serve them. The system is also convenient, allowing customers to make inquiries both over the internet and by phone.

According to the company's website, UBH serves a wide range of customers, including Fortune 500 companies, child welfare organizations, disability carriers, and school districts. To better serve these customers, the company has divided them into segments: the employer division, the health plan division, and the public sector.

Customers who utilize UBH's services express satisfaction, in part because the company is innovative and has created a customer relations strategy that leverages current technologies. The company was one of the first in the industry to use the internet to meet and address customer needs, and it was also the first to offer a spectrum of services including disability support, employee assistance, and behavioral health programs.

Customers are also served in a unique way in that they do not need to call different 1-800 numbers to get what they need. Instead, each customer is assigned a coach who aids them with their policies and helps them find solutions. This strategy makes it easy for customers to receive the personalized attention that is often lacking at similar companies.

The company's core values are instrumental in the execution of its CRM strategy. One illustrative example is the feedback received from a customer named Thelma, who lost her husband and had difficulty coping with his death. Thelma explains:

"She had trouble getting out of bed in the morning and watched numbly as her bills piled up. When her car developed engine trouble, she left it in the garage. Bob always took care of these things. She felt sad, alone, and unsure about what to do. Thelma's son encouraged her to call UBH for help. Soon she was working through the grieving process with a therapist. UBH also connected Thelma with a financial advisor and a mechanic. With her household finances under control and her car back in working order, Thelma is slowly learning how to move on with her life."

This story illustrates the level of satisfaction that UBH customers experience. It is one of many testimonials available on the company's website. As reflected in UBH's touch-point map, the post-service stages of the customer service cycle—satisfaction, loyalty, and advocacy—are currently emphasized most heavily.

Identification and Differentiation Strategies

UBH's customers are patients dealing with serious health issues, including mental illness and drug abuse. To properly serve these individuals, the company must have as much information as possible. Medical records—including current and past medications—are essential for providing appropriate care.

If a customer has issues with drug abuse, additional information may be required, such as the duration of drug use and whether the individual has previously received treatment for substance abuse. This information can be gathered from the patients themselves or from their current or former physicians.

To recognize each customer efficiently, the company should place customers into distinct categories that can be arranged to allow searches based on shared characteristics. For example, a database could separate categories by color code:

The primary reason identification is important for this company is patient safety. Because UBH is aiding patients with serious health issues, the accuracy of all information is critical. Identification also allows the company to track patients according to their specific health concerns, enabling timely and effective assistance. As Greco and Ragins (2003) note, CRM "is a business strategy that attempts to ensure every customer interaction (whether for sales or service) is appropriate, relevant, and consistent — regardless of the communication channel." Identifying customers is one of the first steps in creating a successful CRM strategy.

A differentiation strategy is important for distinguishing customers from one another. One key method is differentiation based on value. According to Gupta, Lehmann, and Stuart (2002), customer value represents "the expected sum of discounted future earnings based on key assumptions concerning retention rate and profit margin. The value of all customers is determined by the acquisition rate and cost of acquiring new customers." An article in The McKinsey Quarterly further notes that "today, CRM programs are used in a wide variety of industries to identify and retain valuable customers, to encourage fickle ones to spend more, and to cut the cost of serving those who are less valuable" (Binggeli, Poomes, and Gupta).

For United Behavioral Health, determining customer value may prove challenging given its diverse customer base, which ranges from corporate clients to disability carriers to individual patients. To address this, a customer valuation model must be created that incorporates discounted future earnings, retention rate and profit margin, and acquisition rate and cost of acquiring new customers (Gupta, Lehmann, and Stuart, 2002).

Customers can also be differentiated based on their needs. UBH serves three main groups—employers, health plans, and the public sector—each with distinct priorities. Employers are primarily concerned with plan options and cost for their employees. Health plan customers focus on coverage types and access costs. Public sector customers, who often receive Medicaid and welfare benefits, have limited income and are chiefly concerned with having all of their health needs met.

Customer portfolios will be tailored accordingly. For the employer division, portfolios will reflect the number of employees, the length of the business relationship, and annual expenditure on UBH services. For the healthcare division, customers can be categorized by the type of services (HMO or PPO) offered and by organizational size.