CPM Study Indicates Predictive Segmentation 80 Percent More Effective Than Traditional Method

MIDDLETON, Wis., Jan. 22, 2003 -- To determine the most effective way to reach its audience for a cardiac campaign, a leading national healthcare system compared two types of list selection, discovering that predictive segmentation was overwhelmingly more valuable than the traditional cluster code method.

The gross charges attributed to predictive segmentation were more than $4 million, while those linked to the cluster codes were just over $2000. Net profit figures were more than $200,000 for predictive segmentation, and just $102 for cluster codes.

The system used Customer Potential Management (CPM) Marketing Group's proprietary Consumer Healthcare Utilization Index (CHUI)(TM) for the predictive segmentation portion of the campaign. CPM is an international leader of customer relationship solutions for healthcare, with more than 100 clients.

CHUI is a scoring system that predicts the likelihood of each individual to require specific services or products. It is based on the major diagnostic categories (MDC), diagnostic related groups (DRG) and top identified diseases and medical services of this century. Predictive segmentation is a significant departure from the various geographical and demographic segmentation systems healthcare strategists have used in the past to better understand their patients.

While the HIPAA-compliant CHUI is based on more than 20 million healthcare encounters and enhanced with demographic variables, cluster code systems are based on self-reported, non-healthcare information such as psychographic and demographic survey information.

To test its cardiology campaign with each of these segmentation methods, the health system obtained lists of women and men over age 35, with household income of more than $30,000, using both CHUI selection and cluster code selection. The messages, encouraging recipients to take a proactive role in their heart health by scheduling a heart screening, and to learn the warning signs of a heart attack, were written for men and women, and restricted to one per household. Both existing patients and non-patients were included.

In addition to the results showing the superiority of the CHUI system in gaining a desired response from its audience, the CHUI list contained only 3,614 names while the PRIZM cluster code list contained more than double that amount with 7,259 names.

"It's clear that predictive segmentation provided a far superior selection methodology to identify the most appropriate individuals for the cardiac information," said John Hallick, CPM president and CEO. "CHUI served as a better predictor of both the quantity and quality of campaign response."

Bottom line, predictive segmentation provides a more accurate view of customers than previously available methods, ensuring that health providers are more efficiently and cost-effectively reaching the right individuals for each health education and disease management program.

For more information on this case study, go to the Press Room at www.cpm.com to read "Comparing Predictive Segmentation and Cluster Codes to Select Market Lists," or contact us at 1-800-332-2631 for a copy.

About CPM Marketing Group, Inc.

CPM Marketing Group, Inc., headquartered in Middleton, WI, is a pioneer in the development of customer relationship management (CRM) solutions, including information warehousing technology, delivery systems, and portals. Since its inception in 1981, CPM has achieved international recognition for solving healthcare, financial, and telecommunications business problems with this technology.

CPM's CRM integrated solutions allow healthcare organizations to maximize their customer relationships through market analysis, strategic planning and targeted personal communications. The foundation is an accessible, customer-centric web warehouse that includes comprehensive individual and household data. CPM's suite of software tools provide easy and secure access to the data for individual snapshots of patients and health consumers on a "segment of one" basis. For more information, visit www.cpm.com, call 1-800-332-2631, or contact us via email at sales@cpm.com.

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