Using Action Standards Improves the Decision Making of Management.
We strive to reduce the uncertainty and financial risk of product development, marketing activities, and other strategic deployments. One way to assure that market research provides these benefits is to emphasize the development of “Action Standards”. This process is certain to add value because it demands a better collaboration between researchers and clients. It involves using the client’s business plan and other inputs to help determine whether a strategy should be pursued or not.
How to Evaluate if a Health Insurer Should Enter the Medicare Advantage Market
Suppose we are working with a health plan that has not yet entered the Medicare Advantage market, but is thinking about it. There are many factors to consider – brand position, market competition, network requirements, consumer attitudes toward MAPDs, and more. Many managerial teams have trouble systematically determining whether favorable or unfavorable conditions exist for moving forward.
In order to break things down into practical pieces, researchers and clients can develop a set of research hypotheses and the action standards to be used to evaluate the corresponding research results.
In this example, one hypothesis that needs to be measured and tested is, “Consumers will accept a Medicare Advantage Plan from our company.” Is this true or false? In order for measurement to contribute to decision making, the client’s marketing and strategic planning teams need to determine what the action standard is. They need to estimate the point at which consumer acceptance is too low to support launching an MAPD, or conversely, at what point do we have a sufficient proportion of consumers accepting the new plan to support the strategy.
The action standard for this case might be, “If more than 50% of consumers accept our brand’s new Medicare Advantage concept, then MAPD development is supported.”
Creative researchers may develop several metrics to produce an overall acceptance score, or the result of a single question may be deemed appropriate. Researchers and clients will also have an opportunity to measure many factors. Beyond acceptance, there lies measures of product performance and likelihood of reaching competitive parity or superiority. Studies that produce multi-factor results can lead to flexible and useful strategy score sheets that enable management to think about different scenarios.
Whenever clients and researchers develop action standards, the market research has a clearer purpose and delivers stronger conclusions.
Learn about Deft Research's Member Experience Studies including Net Promoter Score (NPS) tracking.