We have a pilot deal with an insurance payer in negotiation for our mhealth platform, how can we use projected cost reductions to close the deal?

Our behavior change software is to reverse diabetes in its early stages, we can find projections on cost saving with mobile health, and we can find easily the exorbitant cost of lifestyle disease in general (75% of healthcare costs). Assuming our product does not suck and their patients will use it to stabilize their weight or even lose a little, how can we build realistic cost savings projections to close our deal?


I have in the past developed cost-savings calculators and they can be one of the most effective tools in moving an enterprise software prospect through the sales funnel to a closed deal. So I understand why you are so keen to get a handle on these numbers.

Unfortunately, you are in a bit of a chicken-and-egg situation. It reads as though this will be your first deal. By definition, then, you have not yet had a deployment allowing you to properly quantify and document the benefits and cost savings accruing to insurers when their patients use your tool. Without such data, on the other hand, closing this first customer is all the more difficult.

What you do have is a golden opportunity to work with this early adopter of your technology to develop those metrics. Make it worth this customer's while to work with you by offering it a steep discount, or a modest up-front fee combined with payments down the road based on how much they actually save. Or collaborate with this customer on a study that will quantify such savings and will provide this insurer with some effective competitive positioning it can use in its own marketing.

The challenge here is that savings on the mediation of lifestyle diseases like diabetes can take an awfully long time to accurately establish. What metrics, such as weight stabilization, could be harvested in the shorter term? And how convincingly could you extrapolate from those early metrics to estimate eventual cost savings?

You are certainly thinking the right way. Now you just need to figure out how you can collect actual patient data and turn that into a cost-savings calculator that will help you more easily close the next customer, and the scores of customers thereafter.

I hope this helped. If you have further questions, I am only a phone call away.

Answered 10 years ago

Always approach communications from the perspective of "what does the audience what to know" ... So, what does your insurance payer want to know that your software does to benefit them? It saves them from paying out on their plans - well, how much?

There are so many ways to quantify this, just find the most impactful numbers that will make the executives think "we can't afford NOT to do this" ... Surely the cost of your software would be a drop in the bucket compared to the cost of diabetes. Show this on a per-patient basis, and an overall bottom-line 10-year plan. How many millions will they be able to pocket for having helped their members to stay healthy and out of the hospitals?

PS: Great product you are developing - I hope you are using game dynamics in your app! :)

Answered 10 years ago

First off, sounds like a great product. I have a family member with diabetes and this is something they could have used years ago.

I worked with Tom Nagle who wrote the bible on b2b pricing and he taught me to always think about the immediate problem you're solving for your customer and what value that delivers.

In your case that could mean your app increases attendance at diabetes info sessions because patients are having more fun. Or decreases missed appointments (which had an easy to calculate cost) because that functionality is built into your fun app. You need to figure out what's the immediate pain your relieving for the healthcare provider and sell on that, not long-term potential cost savings.

Happy to brainstorm and share some
techniques on zeroing in on how you solve an immediate problem.

Answered 10 years ago

This sounds more like a financial questions or a sales question vs an online marketing question. Ask in a different category and you may get an answer.

Answered 10 years ago

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