Understanding customers in aged care | KPMG | AU

Understanding customers in aged care

Understanding customers in aged care

To stay successful in a rapidly changing market, providers in the aged care sector must understand their core customers in more detail and be prepared to tailor services to meet their changing expectations.

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Rethinking aged care services through research

Faced with regulatory reform, growing competition and shifting consumer preferences, there is a limited future for aged care providers that don’t fully understand their customers. Without this providers risk a downward spiral of poor customer experience1, weak revenue growth and low staff engagement.

In home care, many providers are still adjusting to a customer-led world following decades of the government being the ‘paying customer’, and with significant changes identified in the ‘Tune Review’ this is likely to soon extend to residential aged care as well. Most providers are not yet gathering basic customer data or using IT platforms such as CRM (customer relationship management) systems to record customer requests, feedback and preferences, and using this information to shape how they engage with their customers and shape their delivery of services.

Aged care is not the only sector with work to do. The KPMG Global CEO Outlook 2017 shows that 61 percent of Australian CEOs were concerned that the quality of their data hindered their ability to access deep customer insights.

With block funding in the aged care sector removed in February 2017, now is the time for providers to focus on the ‘paying individual’.

The 65 + cohort is diverse

Meeting customer needs in aged care means recognising that the 65 years + age group is just as diverse as any other part of the population. Within this cohort there are discrete segments, patterns of needs, attitudes and behaviours that can guide strategy and help providers to design services, packages and facilities.

A deep dive into customer personas

In 2016, KPMG led an investigation into the customer personas of the 60-80-year-old demographic in South Australia2. The research, titled Shaping the Future of South Australia – Ageing Well Report, was undertaken with the support of BankSA, Committee for Economic Development of Australian (CEDA), Flinders University, the Government of SA, RDNS and Telstra. It was designed to help address the largely untapped economic and social opportunities that transitioning SA into a world leader when it comes to ‘Ageing Well’ may deliver. The goal was to help the aged care sector, and other industries that service older people, to see the diversity of needs and aligned business opportunities. The insights are applicable to aged care organisations across Australia.

Based on qualitative and quantitative analysis of 800 people, the research found that segmentation by age is not useful. Rather, behaviour, physical and social function, and socioeconomic factors play a significant role in how customers make decisions. The research discovered five customer personas within the demographic:

The Worker: Age 62, lives in the metropolitan area, in paid work, not accessing superannuation, no pension, concerned about financial security, and good-to-excellent health.

The Renter: Age 77, rents in the metropolitan area, not working, not accessing superannuation, on a full pension, low financial security, and poor-to-average health.

The Regional Resident: Age 65, lives in a regional area, works 2 days per week, not accessing superannuation, on a part pension, medium financial security, and average-to-good health.

The Grandparent: Age 68, lives in a family home in metropolitan area, works 1 day and volunteers 2 days per week, accessing superannuation, has a part pension, medium financial security, and good health status.

The Traveller: Age 66, lives in a family home in the metropolitan area, doesn’t work, accessing superannuation, has no pension, high financial security, and good-to-excellent health status.

Among these groups, we discovered some ‘universal truths’, such as that the cohort don’t like the word ‘ageing’, and that many lacked a financial plan for retirement. Another common thread was the desire to stay connected, maintain mental and physical capacity, be productive and respected.

Building your insights

The road to understanding your customers in a similar way can start small. Here are five key steps to get on track.

Explore existing data
If you have a CRM system and gather data already, use it to identify customer patterns. You may find opportunity groups that are your ideal target market, or that you could potentially get greater value from. Also explore publically available data on demographics such as the Australian Bureau of Statistics’ 2016 Census to see trends in your area.

Conduct primary research
In conjunction with existing data, or to generate data, conducting primary research is key. This involves personally talking to the market to understand the diversity of customer needs. Qualitative research techniques, such as one-on-one interviews and focus groups are suitable, and remember to include current and potential customers, along with their carers. Qualitative research allows you to gather a deeper understanding of the understanding, expectations, and desires of your potential customer base.

Build useful questions
You need to ask questions that paint a clear, and commercial, picture. What do people need and want from an aged care experience; what defines a basic versus a quality experience; and what are their financial/cost expectations? Explore the competitors that they are looking at and why, how they are gathering their information, what criteria they are using to make their decisions, and who is involved in the decision making process – the future residents or their family, friends and/or carers.

Align this to your business model
All of this information must inform your business model. Does it suit your current model, or do you need to shift your strategy? The goal is to be the preferred choice.

Communicate the change
You need to bring your organisation on the journey so that your strategic vision is delivered at all levels. The change must start with a commitment from the top – the CEO, board and other decision makers, but needs to include all parts of the organisation, including parts of the organisation that may not have traditional consumer facing roles.

Rethinking services

Understanding the nuances within the cohort, as well as their families and support networks, presents an opportunity to both tailor existing and develop new products and services, to attract and retain customers. The effort can build a better experience for everyone involved – from the staff, to the residents, the family members, and more, and ensure a more viable future.

Failure to act will mean missing out on a rapidly growing market and not being competitive. By 2050, one in four Australians will be aged over 65 and about one in 14 people will be aged over 85, up from around one in 50 now. That number is an opportunity.

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