healthcare

Hey, Healthcare Companies

Your Metric Needs to Be “Lives Changed” not “Units Sold”

December 22, 2015
by Samantha Katz

I’ve lived in Los Angeles for over six years, and the holiday season still catches me off-guard. I grew up in New Jersey, where pumpkin-flavored everything just made sense, juxtaposed with the smell of falling leaves, but here in L.A., there aren’t seasonal cues telling me to start buying gifts and booking ski vacations. Even as I write this, the A/C unit is turning on and off intermittently to keep my apartment at 74 degrees, and I’m wearing flip-flops.

What I’m not wearing: a fitness tracker of any kind. (It’s in my junk drawer.)

What I’m not wearing: a fitness tracker of any kind. (It’s in my junk drawer.)

I’ve written previously about user retention for consumer and medical wearables and what’s required from a design perspective to achieve it. Retention is not easy. Rock Health, a leading digital health investment fund and accelerator, dug through Fitbit’s recent IPO filing to estimate that more than 70% of purchasers churn in less than 12 months. The “Quitbit” phenomenon is real. Yet there seems to be a lack of focus on retention: Another recent Rock Health report dove deep into acquisition of users, but said nothing about retention.

Acquisition doesn’t keep you in business; retention does. Retention is also what increases the likelihood of positive health change for your users.

There’s another reason why many companies in the health space are missing the mark on retention, and they don’t even realize it: They are measuring their business success in terms of units sold, instead of lives changed.

At the recent Partners HealthCare Connected Health Symposium, Dr. Robert Pearl, Executive Director and CEO of The Permanente Medical Group, remarked that “the majority of wearables solve a problem called December. Because in December you want to give someone a present, and a Fitbit is about the right price.”

the majority of wearables solve a problem called December

How many of you are smiling right now because that is your strategy for this holiday season?
I imagine that few in management at wearables companies are up in arms about this trend.

For example, how many of you, like me, recently received an email from Misfit advertising their holiday sale with an attractive model in elegant holiday attire and wearing a Shine?

Holiday sales and units sold are more appropriate metrics for cartons of eggnog or DVDs. The human element—the engagement-creation element—is totally absent from this approach to business. This is a real issue affecting both the success of companies in the health space and the people they serve.

Treating customers as just a number dictates how we communicate with and relate to them, and they will take note. While revenue forecasts may look good this December, this one-dimensional metric does not signal whether customers feel connected to the product or company. In the absence of customer loyalty, long-term retention, and positive health change, is unlikely.

Treating customers as just a number dictates how we communicate with and relate to them, and they will take note.

In short, when companies think about their users in terms of Q4 sales—rather than as humans with emotions, flaws, fears, and needs—we all lose.

When I worked at Medtronic Diabetes, the idea of changing lives coursed vigorously throughout our culture. The first words of Medtronic’s mission are “To contribute to human welfare…” That may sound lofty, but it got real when, at an end-of-year review, the head of sales reported to our team that we’d helped to change tens of thousands of lives that year. He followed this with the pronouncement that our goal the next year was to change even more. We thought about the parents who slept through the night with peace of mind, trusting the protection of their child’s insulin pump. Or the high school athlete who no longer had to sit on the sidelines because he could catch hypoglycemia with his continuous glucose monitor. This holistic focus on the individual user shaped how we communicated with customers, developed and designed products, and motivated one another to be better at our jobs. Of course, as a publicly traded company, Medtronic focuses on its bottom line, too—tough decisions on R&D investment and hiring are a reality—but shareholder returns are not the only goal.

We thought about the parents who slept through the night with peace of mind, trusting the protection of their child’s insulin pump.

It’s not only large, regulated, medical device companies who think this way. I recently met one of the founders of Canary Health, a provider of digital health self-management solutions here in Los Angeles. It was an introductory meeting, and I was getting to know the company better. I asked, “What growth goals do you have? Number of employees, partners, people signed up?”

His response: “We don’t think of it that way at all, actually. We think about how many lives we’ve changed.” He then went on to proudly quote how many lives they changed last year.

Changing lives means having impact on the world. That’s powerful.

Remove this lens and wearables are just fashion accessories; software-based health tools are just apps and websites.

What impact are you having beyond your income statement?

To the companies in the health space who measure success in terms of units sold, I ask: What impact are you having beyond your income statement? How can you design more of a human element into your products and services? How would your company’s success change if measured by lives changed and not units sold?

No, really—I’d love to hear your answers to these questions. Let’s chat on Twitter: @alphapatient.

filed in: healthcare, customer experience