I offered my tiny two cents today in an NPR Marketplace story about a new rewards program by John Hancock for their life insurance customers. Under the John Hancock Vitality Program, customers can receive discounts and free rewards for making healthy lifestyle choices. These choices are recorded through smart wearables such as Apple Watch and Fitbit. Since this is a very loyalty program-relevant topic, I decided to repost the radio segment below, followed by a list of the pros and cons that I see in the program.
Pros
- The activities rewarded through the program are things that consumers should be doing and are beneficial to them. So the program is high on both relevance and aspirational value.
- Since most activities are automatically tracked by smart devices, the program is also quite convenient to participate in.
- Most importantly, from a branding perspective, the program turns a negative event driven product into something positive. Customer interactions surrounding life insurance (and most other types of insurance) policies are typically motivated by an unfortunate negative event. This program focuses on the good and creates positive connection between the brand and the customer. It also greatly increases the frequency of brand-relevant interactions with customers.
Cons
- As I mentioned on the show, privacy issue is going to be the biggest concern that can hinder adoption. Some health insurance companies in conjunction with employers already offer similar healthy lifestyle programs. But unlike life insurance companies such as John Hancock, health insurance companies already know a lot about your private health information, like when you saw a doctor, when you did your last annual checkup, etc. For a life insurance company, the program will a lot extra information it does not have about you before. Even though John Hancock promises not to penalize customers for making unhealthy choices, the sheer act of tracking can be disconcerting for at least some customers.
- Research has shown that offering external financial rewards for something that people are internally driven to do and enjoy can actually make people less interested in that something down the road. This is a potential problem with all loyalty programs. Will the Vitality Program make the originally avid workout fans less enthusiastic?
- For individuals who don’t make a lot of healthy choices right now, their reaction can be mixed: either “let me get off the couch and meet my exercise goals, thanks to John Hancock” or “this program is so not for me, and maybe this company too”.
Balancing the pros and cons, I think this is a good move for the company. Whether a significant group of consumers will overcome privacy concerns to sign up or not is something we will have to wait and see.