Our customer’s challenge
A direct insurer had been running successful acquisition marketing initiatives and decided to embark on an upsell marketing program. The aims were to ensure products remained relevant to customers’ changing needs and increase the dollar value of the business. There were a number of challenges to overcome:
- Data quality – Older policy data was often unreliable, potentially wasting precious marketing dollars when attempting to contact customers who had changed address or phone number. Data came from different systems and even newer records suffered from data entry inaccuracies, reducing the number of contactable customers and therefore the size of the business opportunity.
- Complex segmentation – The insurer offered a diverse range of policy types, premium structures, cover levels and payment frequencies, requiring a finely-tuned segmentation to enable personalisation.
- Detailed offer calculation – Underwriting limits and large sum insured discounts, where customers could end up paying less if offered the wrong cover level increase, added further complexity.
- Life and death – Insurance offers are sensitive and it was critical to ensure that an upsell offer would not be made to customers who had been declined for any other cover or, worse, had recently experienced a death in their immediate family.
How Marketsoft helped – the customer success tools
✓ Data cleansing
- Reduce waste by removing old contact details using credit bureau information as well as undeliverable records with insufficient contact details
- Address strings and business rules are tailored to specific business needs
✓ Data enhancement
- Creating new fields – such as additional cover offer and premium calculations
- Deliverability and therefore the size of the opportunity is improved using Marketsoft proprietary address correcting
- Opportunity further increased by updating customer details using Australia Post and credit bureau information where consent provided
- Negative customer experience and complaints are avoided using Marketsoft proprietary ‘Deceased’ wash – death notifications advertised in public domain are used to suppress recently deceased customers and their families
✓ Segmentation and personalisation
- Segmentation of policyholder data to increase relevance with personalised messaging
- Definition and measurement of factors driving response and profitability
- Marketing resources can be focussed on most profitable customers
✓ Marketsoft proprietary ‘fuzzy’ matching
- Enables a single customer view
- Responder data is matched to campaign data for results and segment analysis
- Ensures full and accurate exclusion of customers who should not be offered insurance, such as when a member of the household is deceased, policy is too new or when close to underwriting limits
✓ Single customer view
- Brings disparate data sets from across the business together in one single source
- Enables a historical view of the customer, measuring the impact of recency and frequency of offer and purchase on results
- Ensures deduplication with customer data from disparate sources
The success story
✓ Over $5.8 million of additional premium revenue is generated from annual upsell programs, assuming repeating annualised revenue based on a conservative five-year tenure of the additional cover.
✓ ROI from the program is estimated at 1892%, assuming five year revenue estimate as indicated above and no increase in expenses above those of the initial upsell campaign costs and those associated with the base policy.
✓ Lapse rates remain low for customers receiving the upsell offers as their cover is brought into line with their needs, avoiding the ‘set, forget and lapse’ pattern.
✓ Highly personalised campaigns ensure the relevance of the upsell offer based on factors shown to affect buying behaviour. High response rates and profitability are maintained thanks to a customer-centric approach.