Four different clients have called me to talk about how best to present corporate wellness ROI for the employee wellness programs they sell.
Since it seems to be the season of wellness ROI, I’ve excerpted some key points from the ROI chapter in our upcoming book “The Step-by-Step Guide to Corporate Wellness Proposals That Close The Sale” to help you rethink your approach to this topic.
1) Wait to be asked
You might be surprised to learn what employers really think about the return on investment for wellness. (To find out more about this, check out the survey data at Healthiest Employers.)
So instead of forcing the ROI discussion, let your prospective client bring it up first. Ask lots of questions so that you understand their perspective, which may be much simpler than you’re fearing:
“How will you measure success for the employee wellness program?”
“What are your thoughts about measuring intangible benefits like productivity improvements?”
“What do you see as the pros and cons of trying to do a traditional ROI calculation?”
2) Back of the napkin
Take them through a “back of a napkin” explanation of the factors your ROI model includes. No actual numbers, just the drivers – days of sick time, for example.
Ask questions like:
“What else do you think we should consider?”
“I’m not sure whether we should include this item, what are your thoughts?”
“How easy would it be to get this particular data point here?”
Inviting their questions moves them “to your side of the table.” Now they feel like they’re helping you develop their corporate wellness ROI model — which means they’re going to champion it with their peers when you’re not in the room. This is a very good thing.
3) Invite criticism
If you’re meeting with folks from the CFO’s office or financial analysts in the benefits and compensation group within Human Resources, odds are good that they’ll start poking holes in your ROI model.
For most of you, the immediate response sounds something like this:
Don’t go there. DO NOT GO THERE.
Instead, always respond by smiling and agreeing. Watch your body language very carefully at this point, because this is when you’re probably starting to either 1) cross your arms in front of your chest and lean away or 2) suddenly lean forward and get very animated.
“You’re right, that issue is really important for this ROI model” and then invite their concerns AND solutions:
“Tell me more about what you’re thinking may be off here.”
“I’d love to get your insights on what might be a better approach.”
“What would you do here? We really struggle with this one.”
4) Sun, moon and stars
Sure, if the sun, moon and stars line up you might see huge savings or massive productivity improvements.
But probably not.
So don’t build your model on those assumptions. You’re just asking for trouble. Deals usually go south when clients start pointing out that your ROI assumptions are wildly unrealistic. At that point, you risk looking either clueless or deceptive. Would you want to do business with someone like that?
Set the bar low. The customer reaction you are shooting for sounds like this:
You say: “We assume 3 fewer sick days per participating department per year. Does that feel like it’s too aggressive an assumption?”
They say “Oh, gosh, no. Surely we can do at least that, probably more. But that’s a good assumption, let’s leave it there.”
Sometimes they say “Oh, I think that should be at least five days per department. Let’s up it.”
If you privately think that’s doable, then go ahead and change it. If you think that’s unlikely, but they’re in love with the better assumption, put the following strategy into action.
5) Best, likely, worst
Never show one set of numbers. Show three scenarios: best case, likely case, worst case. If they want to use a really optimistic assumption, that’s your best case number.
Another bulletproofing strategy: show a range of outcomes rather than a single number.
6) CFO hot buttons
In my CFO, COO and CEO roles, I’ve poked holes in a lot of financial models. Here are the weak spots I see most commonly in corporate wellness return on investment models.
It doesn’t mean your model’s wrong; these are simply the “soft spots” that someone who’s financially knowledgeable is likely to zero in on:
- calculating savings based on changes in risk factors
- including very large productivity improvements without specific causes other than changes in health status or risk factors
- excluding costs other than the price of your programs (ex: the time employees spend tracking diet and exercise)
- assuming that all cost improvements are the direct result of your wellness programs without considering benefit design changes, changes in employee demographics, etc.
- a multi-year program where results are initially small, then skyrocket
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