The Hot New Market - Wellness Programs
By Dave Vagnoni
November, 2011
Looking for a surefire way to expand your business? Speak to every single client about how they can save on health-care costs with wellness incentive programs. Here's how you can convince corporate customers to take advantage of their biggest opportunity to cut expenses right now.
It’s about this time of year when Tom Pela gets especially ambitious. As manager of the wellness program at Quest Diagnostics, Pela encourages employees to improve their health through a unique screening program that runs from September through mid-November. “It’s called Blueprint For Wellness,” he says. “This year we’re going for over 70% employee participation.”
The program, cited by researchers as one of the most comprehensive of its kind in the country, provides Quest employees with information to help them make lifestyle changes. After filling out a health risk questionnaire, participants can go to a Quest lab for tests. Results are given to employees in easy-to-read, color-coded charts. “There are about 30 medical tests an employee can take, but Quest doesn’t see the individualized results,” Pela says. “We’re most concerned about quality of life.”
If an employee wants to get healthier – by quitting smoking, losing weight or reducing stress, for example – Quest offers a variety of assistance programs enhanced by free counseling. As incentives for participation, Quest gives employees weekly health-care credits. “We want to motivate our people and get them on the right track,” Pela says.
Of course, another motivation for Quest – a Fortune 500 company with annual global revenues of about $8 billion – is to reduce its health-care costs. According to a 2010 government report, between 70% and 75% of the $2.5 trillion spent every year on U.S. health care is used for treating preventable conditions. If Quest can improve the health of its employees, it can save money or direct funds to other research. “We’re trying to break the inertia and we’re looking for incremental health improvements,” Pela says. “There is evidence companies can attain a significant ROI through wellness programs.”
And the evidence is mounting. A 2009 survey published by Fidelity Investments showed companies gained a 200% ROI by offering a wellness program. Even more compelling, a 2011 report issued by the Incentive Research Foundation (IRF) found that corporate wellness programs have shown savings-to-cost ratios of $3 for each dollar invested. It’s a 3:1 ROI that companies – distributor clients among them – can take to the bank. Further, companies that provide employee incentives (including promotional products, company stores or corporate gifts) as part of a wellness program appear to earn the best ROI of all. “Offering incentives increases participation at a minimum of 60%,” says Melissa Van Dyke, IRF’s president. “Incentives also have a long-term impact.”
In pitching incentive programs, distributors can have a major impact as well. Data from research firm Viverae shows wellness programs present a targeted opportunity for greater ad specialties sales. While 90% of U.S. corporations provide employee wellness programs, only 44% offer promotional products as incentives for participation. That’s a huge market of companies for distributors to call on – both clients that are already using promo items within their wellness programs and those (like Quest) that haven’t yet been sold on the power of promotional products to encourage participation and reward behavior.
So, don’t you want to walk into the office of every corporate client and discuss the benefits of a 3:1 ROI?
With so many companies for distributors to target and such immense potential for sales, Counselor offers a game plan for wellness program success. Read on for tips on how to approach clients and prospects, plus find out how some distributors have already honed their pitch.
Knowledge Is Power
Before you start to call on customers – whether they’re large or small – experts say you need to understand the wellness marketplace. Health insurance costs are skyrocketing and companies are searching for any way to bring them down. A Kaiser Family Foundation Report shows the total cost of an employer-sponsored health-care family plan increased by 69% between 1998 and 2008. “We’re seeing a lot of on-site services like flu shots, health screenings and counseling,” says LuAnn Heinen, vice president of the National Business Group on Health. “Companies are trying to get to the underlying health issues.”
Simply sending an e-mail blast to businesses with a few product ideas may be the quickest way to have your firm get passed over for a sale. Instead, choose to be a consultative seller with the goal of developing customized wellness plans. “Branding has become very important, with the idea being to attract attention,” says Heinen. “You need to break through the noise.”
Consultants that work with corporations suggest building wellness campaigns around events like health fairs. A distributor can then tie in a wide range of promotional items, from event T-shirts to wellness bags filled with literature to logoed body mass index calculators. Helping companies organize employee fitness clubs can also be a useful selling tool. Workers develop good exercise habits while you customize wristbands, caps and pedometers.
“In an ideal world, you want to intrinsically motivate,” says Quan Campbell, president of the Lifewellness Institute. “People like to get things and see value in what they’re doing. They also like to have bragging rights that they got something.”
Many wellness experts believe to actually improve the health of employees, companies must focus on long-term behavior change. “To get measurable results, businesses have to build around stages of change,” says Leslie Nolen, president of The Radial Group. “That’s about the only thing that works. Most wellness programs are not effective because there’s a lack of real commitment.”
To keep employees from bailing on health commitments, companies need to offer a program of gradual incentives. By proposing wellness plans that allow employees to accumulate points for reaching health milestones, distributors can satisfy a customer’s needs while winning consistent business. But Nolen cautions that patience is required when tailoring such future-looking goals. “Corporations move glacially,” she says. “Try taking the pulse of a company over time and eventually they’ll be ready to use a program.”
Consultants also point out that it’s important for distributors to remember who they’re selling to when developing wellness programs. “Know your client and your audience,” says Ted S. Argerolos, CEO of AMA Systems. “A younger crowd will like electronics, while maybe employees at an outdoor-type company will want camping gear. Somebody else might want a bottle of wine.”
Impact Of Health-Care Reforms
With the passage of national health-care reform in 2010, businesses gained a greater incentive to offer employee wellness programs. Most apparently, by 2014, companies will be able to offer rewards of up to 30% of the total cost of an employee’s insurance coverage. For a single person’s policy, the reward increase will average $483 annually, while family policies will earn an employer credit of about $1,300 each year. “This will certainly allow for more significant incentives and employers can ramp up programs,” says Heinen.
Companies will also have access to free government-provided educational wellness tools like Web portals and call centers. The Department of Health and Human Services will be additionally charged with conducting periodic national surveys to measure chronic disease prevention and the effects of promotional wellness programs – a clear benefit to firms with smaller staffs. “There’s a big push right now to help small and medium-size employers,” Heinen says. “In a lot of cases there’s nobody at these companies with a job description to push a wellness program.”
To further help smaller companies develop wellness programs, the federal government has pledged $200 billion in grant money over the next five years. To earn the money, programs must include health screenings and assessments, specific ways to encourage employee participation, educational presentations and improvement of the workplace environment. Here, once again, the value of incentives is unmistakable. “Less than one in five employees will participate in wellness programs that do not offer rewards,” says Rodger Stotz, IRF’s chief research officer. “This changes dramatically when incentives are offered – four in five will participate.”
In part through the Affordable Care Act, small-business tax credits are also on the rise, which may free up budget money for wellness programs. Companies that have fewer than 25 employees with annual wages of $50,000 or less are eligible to receive a tax credit of up to 35% of their contribution to a worker’s premium. If, by 2014, small businesses buy coverage from insurance exchanges, the tax credit increases to 50%. With money available, experts say distributors should consider bypassing managers and buyers and going right to top executives with a wellness pitch. “The bulk of my clientele are smaller companies, and all you need to drive a wellness program is a champion,” says Connie Roethel, president of Core Health Group, a Milwaukee-based consultancy. “One step to success is to capture the support of a CEO. It’s about making health strategies part of business decisions and goals.”
Ideas That Work
With nearly 17,000 locations in 50 countries, Starbucks is the largest coffeehouse company in the world. The company employs 137,000 people, which is about double the population of Greenland. If any corporation should invest in employee wellness, it’s Starbucks, considering the company spends $300 million annually on health care. That’s more than it spends on coffee beans.
“They’re a pretty progressive company, and like other places, they’ve been in search of ways to mitigate rising health- care costs,” says Nelson Jay, vice president of marketing at Washington-based Sunrise Identity (
asi/339206). “We did a wellness kit for them that they distributed at a leadership conference.”
The kit, which was completely customized, included a backpack, track jacket, plush bear and water bottle. One of the goals of the kit was to present Starbucks’ staff with information about fitness and wellness. “Inside the bottle were printed cards with health tips,” Jay says.
In a separate wellness program – this one developed for a large Orlando-based entertainment company – ad specialties sales rep Cherrah Muscato faced the challenge of satisfying 50,000 on-site employees. She was able to work multiple promotional products into the sale. “The client was hosting a health screening event and wanted to increase employee participation with a giveaway item,” says Muscato, a sales rep for a large national distributor. “It’s sort of like a trade show setting. I came up with grocery bags to reinforce the idea of healthy behaviors and lifestyle choices.”
After completing several screenings, employees received turquoise, lime and papaya-colored bags as a gift. Muscato also designed a full-color digital wrap pen with graphics that matched the grocery bag. On the side of the pen there’s a website address reminding employees to log into their online profiles to set health goals and measure results.
Finally, as an appreciation item for those employees who work the screening event as staff, Muscato pitched a candy jar, not filled with lollipops or chocolate, but with almonds – again relaying a message about healthy choices. “The imprint on the jar had multiple quotes about living healthy,” she says. “We also did thank-you cards that each manager could give to their volunteers with a personal note and their signature.”
Unique Choices
While a personal touch can win a sale, creativity may matter most. Arizona-based Commotion Promotions (asi/166010) specializes in wellness campaigns and has even started up a division called GetHealthyPromos.com. “It’s a real good niche market for us,” says Karen Kravitz, the head of conceptology and president at Commotion Promotions. “There’s no magic panacea, but we know incentives boost employee morale.”
In one of Kravitz’s favorite wellness programs, she designed a campaign for a Phoenix-area hospital that featured everything from slap-on bands to spaghetti measures. “We did really cool pot holders, too, that had ingredients on them that were substitutes for salt,” she says. Like many wellness programs, a key component in this campaign was persuading employees to fill out health assessment surveys. Just for doing so, the hospital’s employees were given embroidered, ribbed sports shirts. “They were really beautiful shirts designed with a logo and the name of the program,” Kravitz says.
While most wellness programs are created to improve employee health and reduce costs, some can also be connected to a grand opening or kickoff party. When a central New York-area university christened a new wellness institute, it turned to Cooley Group (asi/168125) to add some healthy imagination. “We’ve really focused over the past year on becoming more consultative and asking the right questions of our clients,” says Karie Ballway, brand consultant at Cooley.
In this particular case, Cooley’s collegiate customer wanted pretty standard branded apparel to tie into the wellness institute opening. Ballway was happy to oblige, but also offered a signature item ideal for health promotion. “We did anti-microbial towels for their fitness center,” she says. “We can all take people’s money, but we also need to fulfill the objective and understand the message a client is trying to send.”
Web Wise
Known for its recognition programs, Boost Rewards, a division of Ohio-based distributor Shumsky (asi/326300), has steadily built more business by offering wellness incentives. The company has done so through an online rewards platform which can be adapted for health-related promotions. “Wellness programs are gaining steam and there’s huge opportunity for promotional products sales,” says Chris Smith, a senior account manager at Boost. “For us, we can add on wellness programs and allow employees to earn and bank points.”
The setup, according to Smith, is similar to any Web-based awards program, like a safety campaign. The design can be in the mold of an online company store that entices employees to earn different promotional items by accumulating points through participation in wellness activities. “We have a clinical lab as a client and they monitor and track points themselves,” Smith says. “We take in the data monthly and offer 5,000 brand-name merchandise items, including logoed apparel. The program has gotten a tremendous reception.”
Naturally, the nicer the item, the more points it should demand. “The programs should give people something to stretch or reach for,” Smith says. “If somebody really wants that kayak, they’re going to need a lot of points.”
The Finish Line
Closing the deal in any sale can be daunting, but winning a major account from a corporation can be especially difficult. Experts say there are some best practices, though, that will help improve the odds of a desired outcome when selling a wellness incentive program.
“Don’t sell by telling,” says Alice Heiman, a Nevada-based sales consultant. “Start with questions and weave in questions. If you’re talking, you really don’t know what another person is thinking and you don’t have control of the room. It’s by asking questions that you have an executive’s undivided attention.”
Before you make a potentially sales-clinching presentation in front of a top executive for the first time, Heiman suggests role-playing with a friend. That can keep you from losing ground in negotiations. “Don’t ever cut the price to close the deal,” she says. “Build a rapport that’s not based on price. You want a customer for life, not for one sale.”
When selling wellness programs to corporations, besides pointing out the obvious cost savings the company can accrue to its bottom line, there is one more powerful technique to help close the deal: a personal appeal to decision-makers.
“You want people to think about being around to play with their grandchildren instead of being hooked up to some device,” says Michael Beauvais, director of worksite wellness at Corporate Synergies Group. “This is about their lives.”
Dave Vagnoni is a senior writer for Counselor.