A Direct Advantage1 Feb, 2014 By: Thomas Haire Response
Jim Havens says a multi-channel direct response campaign for Premera Blue Cross’ new Medicare Advantage plans helped cut through the clutter and drove powerful results.
“For Premera’s Medicare Advantage product launch, our challenge was to grow plan membership in roughly eight weeks in a market where our product offerings were unknown,” says Jim Havens, vice president and general manager of individual markets for Premera Blue Cross in Mountlake Terrace, Wash. “We had to start from scratch to market our products and believed that direct response marketing was the only way to generate the amount of interest needed to meet our enrollment targets.”
Havens, though, knew the power of the Blue Cross brand nationally — and the Premera Blue Cross brand in the Pacific Northwest specifically — would be a boon. What eventually became the Blue Cross Association started in Dallas in 1929 and the company now known as Premera Blue Cross has been operating in Washington since 1933 and Alaska since 1952.
This long history of service and success was part of what drew Havens, a 20-year veteran of Safeco/Liberty Mutual Insurance, to Premera in 2012. Just more than a year later, Havens and Premera faced a difficult task: growing a new portfolio of Medicare Advantage plans in five counties in Washington State during the same timeframe that the media buzz surrounding the federal government’s Affordable Care Act (ACA) was at its strongest.
The Premera team chose a direct response campaign in order to cut through that clutter. “It’s no secret that successful direct response campaigns effectively integrate the creative and messaging platforms to create a cohesive marketing message,” Havens says. “You want to ideally produce a messaging ‘surround sound’ for your products and services.”
How did Premera Blue Cross leverage its talent, history and message into a successful campaign? Let’s dig deeper.
Decades of Service
The company known as Premera Blue Cross since 1998 came together from both edges of Washington State, as well as Alaska, during the preceding six-and-a-half decades. The first tendril began to grow in 1933 in Spokane, Wash., when the non-profit Spokane Medical Service Bureau and the Medical Service Corp. (MSC) were founded to enable people in the Eastern Washington region to afford quality healthcare.
Twelve years later, on the western side of the state, the Washington Hospital Service was incorporated and, in 1948, earned its original certificate of registration from the state, authorizing the acceptance of prepayment for healthcare benefits. This company’s Alaska arm began in 1952, and in 1969, the combined operations were renamed Blue Cross of Washington and Alaska.
In 1994, this company affiliated with MSC, which by then was a Blue Shield plan in Eastern Washington. The two groups finally merged for good in 1998, creating Premera Blue Cross.
Today, the company serves more than 1.8 million members primarily in the Pacific Northwest with health, life, vision, dental, stop-loss and disability benefits and other related products and services. The company’s revenues top $2.5 billion annually and it boasts a network of 27,000 healthcare professionals — as well as 2,800 employees — in Washington and Alaska.
So, when Havens left his job as chief marketing officer (CMO) at Safeco/Liberty Mutual to join Premera two years ago, he wasn’t exactly walking into a startup. At Safeco, Havens says, “I held positions in a number of different departments throughout the organization including claims, innovations and corporate strategy,” before serving as CMO.
“While the property and casualty insurance business is different from the health insurance business, it has some similarities,” Havens adds. “My breadth of experience at Safeco/Liberty Mutual prepared me for my role at Premera. I had experience with direct marketing, strategic thinking and an understanding of how to sell through brokers and how to sell direct to consumers. All of these skills have been critical to my current role with Premera.”
Differentiating the Advantage
That preparation would begin to come in extremely handy when Havens was tasked with introducing the company’s new portfolio of Medicare Advantage plans in five key counties in Washington State.
“In order to be successful we needed to generate a tremendous amount of market awareness for the new products, while also producing significant lead volumes in order to meet our membership targets,” Havens says of the new offering. “It is also important to note that we were working within a restricted timeframe, as we projected that 80 percent of our annual membership would sign up during Medicare’s short open enrollment period (Oct. 15-Dec. 7). To achieve our goals, we developed and executed a successful direct response campaign.”
To put this campaign in full effect, Havens and the Premera Blue Cross team partnered with Chesterbrook, Pa.-based agency DMW Direct. “DMW was a great partner because they have a deep understanding of the Medicare space,” Havens says. “Medicare Advantage is an extremely regulated environment, which can complicate marketing efforts. Due to DMW’s deep experience in the Medicare space they were able to help us sift through ideas quickly and efficiently and we were able to make decisions about how we wanted to position Premera in the market more quickly.”
This was also extremely important with the campaign essentially overlapping the launch of the ACA, the new federal healthcare law. “Without a doubt, the ACA has brought an incredible amount of change for companies like Premera, not to mention the thousands of individuals affected by the changes introduced by the new law,” Havens says. “However, generally speaking, the ACA did not affect Medicare or our new Medicare Advantage plans.”
He continues, “The main challenge that we faced was that with all of the media buzz surrounding the ACA, many seniors were confused about the law and how it affects their Medicare coverage. Therefore, our Medicare Advantage campaigns were challenged to penetrate the market noise associated with the ACA in a compelling way that prompted Medicare consumers to call us to learn about what we have to offer.”
At the same time, Premera was also — in effect — competing for airtime and consumer eyes with itself. “Our other unique challenge was that our Medicare Advantage direct response campaign had to run side by side an individual marketing campaign put out by Premera in the same market,” Havens says. “The Medicare Advantage campaign had to complement, not disrupt, Premera’s individual campaign targeted to individuals under 65. It was important that Premera had the ability to speak to both the under-65 and over-65 audiences without confusing them of what our value proposition was.”
DRTV Doubles Up
Given those challenges, how did Premera’s Medicare Advantage DR campaign work out? “Our direct response campaigns were multi-channel and included direct mail, television, newspaper and digital campaigns,” Havens says. “Each of these channels performed as we expected, and some of the channels far exceeded our lead forecasts.”
Direct response television, in particular, performed well. “Television is a great example of a channel that exceeded expectations,” Havens contends. “DMW Direct did a fantastic job creating and managing a successful television campaign. As a result, call volumes for this channel were almost double what we anticipated.”
At DMW’s urging, Premera enlisted Seattle DR production agency Envision Response for the TV portion of the campaign. “Envision Response had the details of the shoot worked out well in advance and made the day of the shoot as seamless as possible,” Havens says. “Our commercial was well executed — from the location to the actors to the overall look and feel. The final product aligned with our brand and represented how Premera wants to be portrayed in the market.”
DMW Direct’s work on the campaign went even deeper. “DMW provided Premera with an all-in-one solution — doing everything from developing the TV and digital campaigns to executing print and direct mail campaigns,” says Havens.
Premera Blue Cross exceeded its membership targets during the enrollment period. “While there were many elements that contributed to a successful product launch, our marketing campaigns did a lot of the heavy lifting,” Havens says.
Driving Results, Capitalizing on Brand
If Havens wasn’t a believer in the power of direct response — via television, digital and other outlets — before this successful run, he certainly is preaching the gospel now. “The great thing about direct response is that your results tell you pretty quickly whether or not your communication strategy was effective,” he says. “Did the phones ring? Did prospects attend your sales seminars? Did people go online to shop your products?”
As Havens noted earlier, the “surround sound” messaging in a multi-channel direct response campaign is a marketer’s ideal. “However, through my experience, I have found that it is even more critical to have a call-to-action that is easy and memorable,” Havens adds. “If you have a complicated call-to-action, you will often fail to generate your desired response volume. Over the years I have seen fantastic creative that lacks a memorable call-to-action and — as a result — the numbers have been impacted.”
Havens also believes in making sure the measurement tools are in place prior to taking a campaign to market — not just during and after. “Having infrastructure in place to capture consumer response, whether it’s tracking call volumes or click-through rates, allows you to not only improve your messaging in future campaigns but permits you to make on-the-fly changes when your campaigns hit the street,” he says. “DMW did an excellent job managing the efficacy of our digital and television campaigns and adjusting messaging and our media buy based on response rates. We captured response by geography, by day, by hour and by channel.”
Though the power of a well-planned campaign was crucial to Premera Blue Cross’ Medicare Advantage success, Havens knows the power of the brand also played a big hand. But, it’s clear that he believes that combining a strong brand with a powerful direct response campaign is a true recipe for success.
“We were lucky that we were introducing a new product line backed by the foundation of an established and trusted brand such as Premera Blue Cross,” Havens says. “Premera has worked hard over the years to be viewed as an industry leader and an advocate for our members, providers and partners. Our direct response initiatives were less about building a brand and more about making sure we were capitalizing on that brand’s reputation through our creative and messaging.” ■