Aug 11, 2016

Consumer Directed Care: Understanding what the customer values

It’s started – aged care consumers are speaking out. It is great to see stronger advocacy by consumers of aged care services but I want to explore what is driving this and whether it is shining the light on the right issues in the development of consumer directed care and wellness.
Transparency in costing

Consumers are being loud and clear about their rights when it comes to home care services – they want value for money and it is argued ‘transparency in costing’. There has been a bit of coverage of the emerging consumer voice and advocacy in home care since the introduction of Consumer Directed Care (CDC). While it is not uncommon for consumers to express dissatisfaction and speak their mind directly to their provider about service or pricing, what is emerging with CDC is that these views are now being highlighted in the mainstream media. This is a bit out of the ordinary.

Can you remember the last time you heard or read a story about a bank, hotel or electrician overcharging on overheads or for that matter any complaint on their charges in the press? Yes, we might gripe and complain privately but how often do these make it into the media?

Is a focus on overheads in CDC counterproductive?

I wonder if this focus on ‘overheads’, as presented in the media coverage and in the level of consumer dissatisfaction, has a direct bearing on the mandated direction to specify overheads in CDC invoicing of clients, rather than an interest in overheads per se by aged care consumers. I understand why this was included in the guidelines for CDC but where else in the business world is there a requirement to spell out ‘overheads’ in your invoice?

I’ve argued elsewhere on the overhead debate as it relates to the not-for-profit and mission led focus of organisations. Some believe that the focus on overheads will force increase competitiveness and productivity across the community care sector. I’ve also cautioned against this approach if we want to embed a wellness or reablement approach.

Every consumer looks for value for money and whether the service being purchased meets their needs.
Are we, by arbitrarily focusing the debate on overheads, diluting the scrutiny of the consumer and providers on issues of detail rather than on substantive issues of quality and value for money. Is this also limiting our understanding of what the consumer is looking for and what they see as having value.

Let’s focus on what matters to customers – understanding customer value.

Creating products of service that have value for the consume should be were we put our efforts, or as Slater suggests “the creation of customer value must be the reason for the firm’s existence and certainly for its success”. A focus on value creation will assist businesses in embedding competitive advantage and should form part of their strategic imperatives.

To support an understanding of customer value we must also be able to articulate what our ‘value proposition’ is – that is what are we providing customers as the outcome of their purchase.

It is acknowledged that developing and understanding customer value is not an easy proposition but the additional benefits of doing so have been identified as:

tailoring supplementary services or products,
developing new offerings,
demonstrating value over time and building stronger customer relationships,
targeting marketing offerings at the base and additional services,
eliminating unsustainable elements in the product offering,
crafting persuasive marketing approaches, and
building customer trust and commitment.

Build a wellness customer value proposition in community care

The cost of health care is this what will make us consider wellness so without going into an exhaustive analysis of the customer value elements of CDC from a wellness perspective, it is easy to see that there is a difference between purchasing ‘cleaning services’ versus ‘cleaning service that supports and maintains your independence and physical capacity.’ The first could be the ‘naked’ service, using the Anderson and Narus model – referenced earlier, while the second could represent a wrap around service for a segment of your customers. Consumers assess these two offerings and their price based on what they value and see as important.

By segmenting your products or services and understanding your value proposition to the customer you can explain and price your services appropriately.

Unless we differentiate and define the value of a wellness based community services we will be driving down costs for services without a focus on the health and wellness outcomes that flow from such services.

What do you think? I would love to hear your view.

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