How Health Insurance Companies Survive the COVID Recession - Part I

Create a Revenue Management Plan that allows for needed realignment now and growth capability later.

The looming COVID recession is significantly worsening the revenue picture for most Health Insurance carriers, forcing sales and marketing leaders to make some important decisions about go-to-market strategy. However, for many carriers, using across-the-board cuts may well cripple growth capability and lead to significant share loss. How should leaders respond?

In this, the first of two related articles, Alexander Group draws on its experience helping carriers through multiple downturns to outline the crucial leadership imperatives for this difficult period. Taken together, these imperatives will allow leadership to create a Revenue Management Plan that realigns sales/support resources now–in order to maintain market momentum during the downturn.

Creating a Revenue Management Plan–Health Insurance Leadership Imperatives for the COVID Recession

  1. Prioritize and protect vital accounts/brokers/sales resources
  2. Shift activities to more efficient resources
  3. Reposition resources for mid-term growth
  4. Adjust sales comp and quotas to optimize performance
  5. Deploy a Customer Success mindset
  6. Speed governance and decision-making

Imperative #1: Prioritize and protect vital accounts/brokers/sales resources

Smart leaders will create a high-level team to identify their highest priority customers and sales resources for retention and brokers for extra attention. These teams will then develop tailored engagement and communication plans to ensure coordinated execution. For those crucial accounts, this often involves strengthening the account management function to provide extra guidance, analytics and customer support–to help these accounts and their employees navigate the recession generally, and COVID-19 testing and treatment in particular.

If done right, this extra investment will drive tremendous loyalty and increased wallet share when the economy revives. Meanwhile, management must also take care of its key sales personnel–who face reduced earnings and a higher workload. Similarly, management must prioritize the brokers that really fit with their value proposition and therefore deserve extra attention. This planning should be done quickly and incorporate quota adjustments and increased coaching of, and by, managers. It also requires senior leaders to directly supervise key metrics on personnel performance and retention to make it really stick. This cannot be an optional choice for SEs, AMs and the key support roles.

Imperative #2: Shift activities to more efficient resources

Downturns typically mean that more selling and broker management time is required to maintain the same revenue, so leaders must find more high-value time for SEs and AMs. This means moving quickly now to shift activities/time from expensive sellers to support resources. Even if management has been reluctant to force this shift in the past, it now becomes mission-critical. This means it is also crucial for leaders to set the right headcount levels for each different support role and clarify the “plays” and rules of engagement between sales and support roles under different customer scenarios.

In parallel, more coaching becomes essential. Alexander Group’s health insurance sales time studies consistently reveal that it requires 20%+ more coaching time to ensure that sales executives actually use their freed-up sales time to engage with high-value customers/brokers versus falling back into other low value activities. And, it also takes more coaching to ensure that these pursuits harness the right resources and titles. As part of building this Revenue Management Plan, health insurance leaders should not shy away from challenging some long-held beliefs around traditional roles and reporting alignments.

Imperative #3: Reposition resources for mid-term growth

But the Revenue Management Plan is not just about playing smart defense by protecting key resources and accounts, and increasing efficiency. Our experience shows that successful HI leaders also run significant offensive plays in a downturn. More than ever, the increasingly savvy HI group buyer is favoring trusted-advisor solution-providers. Therefore, preserving new solution and ancillaries’ momentum is crucial. Indeed, a downturn is an opportunity to shift freed-up resources towards developing customer advocates for your new solutions. So, while competitors may pull back, you can increase engagement in new products and with new accounts that may feel neglected by their carrier. Then, when the economy revives, you will be well-positioned to win over those high-value accounts that you specifically targeted.

Of course, this will require the reevaluation of previous growth bets based on where scale is achievable and where you can balance customer acquisition cost (CAC) and customer lifetime value (CLV). Overall, your Revenue Management Plan will help you move resources and capacity from low to high growth activities and build the stronger buyer relationships to ramp-up ahead of the market.

Meanwhile, the second installment of this series will be out shortly and explore the final three Health Insurance Leadership Imperatives pertaining to how adjusting sales comp and quotas, customer success and decision-making should be addressed in your Revenue Management Plan.

We hope you find this article useful. If interested, please contact us to learn how to quickly create your Revenue Management Plan for the downturn.

You may also be interested in:

How Health Insurance Companies Survive the COVID Recession – Part 2

Revenue Leadership Actions for Disruptive Times

COVID-19: Should You Protect Sellers’ Pay?


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