Predict Consumer Adoption for Product Launch


Challenge
Launching new insurance plans for the 2006 Medicare Bill, Humana sought a combination of marketing strategy and product design that would provide competitive advantage and differentiation. Current tools are unable to analyze new product launches or competitive environments with hundreds of product offerings.

Approach
Icosystem developed an agent-based model (ABM) as a way of simulating, predicting and optimizing consumer behavior. We applied this technique specifically to understand how WOM impacts marketing and improve return on marketing investment. This model helped Humana understand how marketing initiatives are influenced by a rich network of interactions that include competitive messaging, government information, as well as direct exchange of information among consumers and between consumers and other members of the healthcare “ecosystem,” such as physicians, nurses, pharmacists, service professionals and sales reps.

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Acquiring New Customers with Tailored Offers

Using agent-based modeling, health insurer Humana was able to place underwriting power in the hands of the sales and broker team to provide more responsiveness to employer needs, allowing employers to model different benefit bundles and contribution strategies to achieve its health care and savings targets.

According to Jack Lord, Chief Innovation Officer, using Icosystem’s technology “is a major advance in our ability to develop targeted, customized benefit solutions for employers. This is like moving from the Farmer’s Almanac to Doppler Radar.”

 

“How Word of Mouth Impacts Medicare Product Launch and Product Design”, Measuring Word of Mouth Vol. 3, Word of Mouth Research Symposium, 2007.

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In 2005 we began working with Humana’s Senior Products group to help them plan their marketing strategy for new product launches that were planned for 2006, when Medicare plans were mandated by law to begin including prescription drug coverage. Our tool helped Humana make a number of important predictions and it elucidated key aspects of how WOM would impact the outcome of their marketing initiatives.

One year after the launch of the new Medicare plans, Humana had moved from sixth largest to second largest provider of Medicare plans in the United States.

 

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