Blog post by Colin Hung.
Last week, we got surprise news from consumer genetics company 23andMe – the best known for helping everyday citizens discover their ancestry. They announced that GlaxoSmithKline (GSK), the British drug giant, would be investing $300 Million USD into the company and the two organizations would be jointly using the 23andMe genetic database (de-identified of course) for life-saving drug research.
Reaction to this announcement from consumers has been concerned…bordering on negative. Some feel betrayed by 23andMe, believing their genetic data would not be used by the company for profit. Many were concerned about the ability to re-identify the genetic information and have it used against them in the future (de-identified data can be traced back to the original person using a variety of data mining techniques).
There has been a lot of discussion on Twitter about the announcement, the issue of data ownership and the ethics around selling healthcare data. I recently hosted an #hcldr chat on that very topic. You can view the transcript via Symplur and see the blog here.
From a marketing perspective, I found the announcement a fascinating study of permission vs forgiveness. You’ve probably heard the adage: ‘Better to ask for forgiveness than for permission”. I’ve used it myself on many occasions when needing to make quick decisions regarding marketing strategies and program funding. But does this approach work when it comes to customers?
Consider the practice of “negative billing” – where a company foists a price increase on customers by universally moving them from a basic package that is suddenly no longer offered to a higher priced package that offers slightly different features. Cell phone providers and cable companies were notorious for this practice. Negative billing in this context an example of large scale ask-for-forgiveness-vs-permission.
Part of the reason why this approach proved effective was:
- Switching costs for customers was very high (contract restrictions, swapping out cable boxes, new phones/SIM cards)
- Alternatives were limited (AT&T vs Comcast…ugh!)
- The cost increase was relatively small
In 2018, however, switching costs for many products/services is near zero and there are plenty of alternatives just a few clicks away. So does asking forgiveness still work?
23andMe is not a huge company, but it has built a reputation as being a good steward of genetic data. Their management team has made it clear from the beginning that their intent was to use genetic data to improve the health of people around the world. The company recently got FDA approval to report on BRCA1- and BRCA2-related genetic risk for breast, ovarian and prostate cancer. Bottom line, the company is not evil (hello Turing Pharmaceuticals and Theranos!)
That’s why I am puzzled why they would risk their reputation by implementing an opt-out/negative billing approach to sharing genetic data with GSK. From their press release: “23andMe customers are in control of their data. Participating in 23andMe’s research is always voluntary and requires customers to affirmatively consent to participate. For those who do consent, their information will be de-identified, so no individual will be identifiable to GSK.”
In my opinion, it would have been better to approach this from the other side and ask permission from their customers to share data. They could have mounted a marketing campaign encouraging their customers to donate their data to the research endeavors with GSK. They could have highlighted all the wonderful societal benefits that would be possible AND they could have donated a portion of the profits (even as little as 0.05%) to a charity that helps patient in the same space where they were doing research (ie: breast cancer). It would have been a marketing coup.
Instead, the company is now dealing with negative reaction from its customers and it has given pause to anyone considering their ancestry services. Plus, it has opened the door to new competitors who promise to ask permission prior to selling/sharing data whereas before they were the dominant player.
On next week’s monthly #HITMC chat I would love to hear the community’s opinion on permission vs forgiveness. Do people have different views on the approach for projects that only affect internal stakeholders vs customers? Is healthcare marketing held to a different standard than other industries? Is there a best practice for asking permission and forgiveness?
Please join me Tuesday August 7th at noon ET (9am PT) for a discussion on permission vs forgiveness in healthcare marketing:
- T1 Have you ever made the conscious decision to forge ahead with a marketing initiative knowing you might have to ask forgiveness later? Details!
- T2 Better to ask for permission or forgiveness before launching a healthcare marketing program that impacts customers? Why?
- T3 What tips or strategies have you found effective in getting permission from stakeholders for marketing programs? How have you gotten them on board?
- T4 What tips or strategies have worked for you when asking forgiveness from stakeholders for a marketing decision you have made?
- T5 Is there a campaign that you feel is a best-practice example of how to get customers onboard with a change/price increase/new initiative?
- BONUS What topics would you like to see on future HITMC chats?
For those not familiar with Twitter chats, just hop on Twitter and search for #HITMC on Tuesday, August 7th at Noon ET (9AM PT) and you can join in. I look forward to seeing you online!