December 16, 2011

From Columbus Business First
By Carrie Ghose

When Mickey Byas shopped for a new car, she turned to an unlikely buying guide: Her employer’s client list.

As part of an initiative by Medical Mutual of Ohio , the sales department secretary in the insurer’s Powell office searched a database and was surprised to find that Lindsay Honda in Columbus – where she and relatives had bought cars before – is insured by Medical Mutual. When she bought her 2011 CR-V, other Medical Mutual employees happened to be at the dealership running open-enrollment meetings.

“I said, ‘I’m patronizing you because you’re a customer of ours,’ ” Byas said.

Effective marketing

Medical Mutual CEO Rick Chiricosta said he’s tried since taking the helm three years ago to foster a culture where the Cleveland company’s 2,600-plus employees direct their buying power to customers. This year, he put technology and money behind the effort.

This fall, the company rolled out a database on its secure internal network that is searchable by category and address. Chiricosta, who lives in Lorain County, was surprised to learn his two favorite restaurants were Medical Mutual customers. Most of the staff is in Cleveland, but the database allows 50 employees in Central Ohio, about 500 in Toledo and a few in Indiana, South Carolina and Georgia to participate.

In early December, Chiricosta sent a memo saying employees who had saved receipts from those merchants could log in their purchases, making them eligible for a drawing of gift cards from clients PNC Bank and Huntington National Bank.

More important, he wants workers to tell the merchants what they’re doing.

“We really feel it’s the most effective way we can use our marketing dollars,” he said.

The day after the memo was sent, employees had logged in $165,000 in saved receipts. The total climbed to $863,000 by Dec. 13 and was on track to break $1 million within the week.

Byas, with Medical Mutual 13 years, said her co-workers followed the philosophy before the promotion.

“We have a (Discount) Drug Mart across the street, and we insure Drug Mart, and we’re over there all the time. If they see that they’re buying our Medical Mutual insurance and Medical Mutual people are patronizing them,” she said, “they’re making money back and they’re building their name, because we have families.”

Chiricosta, whose daughters attend customers Bowling Green State and Cleveland State universities, said he’s “so crazed” he’s asked employees to at least consider whether a finalist in a child’s college decision is a customer.

Encouraging loyalty

A health insurer is uniquely poised to run such a loyalty program because it has customers in just about every industry, Chiricosta said. For instance, it’s hard to avoid doing business with the state of Ohio, another Medical Mutual customer.

“There aren’t many employers that can push that number of customers into a business,” he said.

National insurers don’t have their entire staffs within the state, he said, but perhaps an Ohio bank could run a similar program.

What remains to be seen is whether gratitude translates into loyalty. Chiricosta said one northeast
Ohio company did not leave for premiums that were about 4 percent lower because Medical Mutual was encouraging workers to shop there.

“It will be one more factor in their decision,” he said, “that hasn’t been there in the past.”