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Case Study: Insurer Crafts Campaign by Listening to Customer Voice
Date: April, 2013 --
In this case
study we’ll discuss how an insurance marketer utilized Voice of Customer (VOC)
data to better understand their customer and prospect bases, and, through this
exercise, better target them for upsell and/or renewal of their insurance
program. We’ll demonstrate how the insurer effectively utilized the information
garnered from VOC data to craft targeted sets of multi-channel campaigns
utilized to communicate with the various segments of their database, and detail
the outcome of these initiatives. This case study was compiled by Data Services,
Inc. in cooperation with our friends at the Prescott
mortgage security insurance company profiled in this case study seemed to have
grown as much as they could. The company sells a particular type of insurance
which provides warranty protection for the various major systems and appliances
in the home, such as refrigerators, hot water heaters and so forth.
Most of these
policies are purchased by sellers of homes as a sales incentive. Thus, the home
buyer becomes the insured and the customer. However, the homebuyers tend to
believe that warranty service is needed only during the first year of
ownership. Home warranty insurance is not perceived as a long-term
relationship. Consequently, the renewal record in this industry tends to be
wanted to improve the renewal rate, setting as a target a 15% increase. In
order to accomplish this, the company re-examined its marketing strategy with
respect to renewals. They undertook “voice of the customer”, or VOC, research,
a unique form of research that requires an intense listening effort and
disciplined tests of marketing approaches. From this research they learned
several important things about their customers, and were empowered to craft a
multichannel strategy which focused on these insights.
identified the three main segments of their customer base and then crafted
strategies to approach these segments. Not surprisingly, the three populations
were: customers who did not file a claim; customers that had filed a claim
which was approved; customers who experienced a denied claim.
necessary to reach each of these categories in an effective, yet slightly
different, manner. In short, using VOC techniques enabled them to develop a
renewal strategy that was driven by the expressed needs and expectations of
their three categories of customers.
customers did share one thing in common: They did not perceive that they had a
relationship with the company. It was important to build that relationship
among all three categories. The research drove them to develop a new strategy
to confirm customer awareness and engagement.
showed that a traditional aggressive sales approach would not work, and this
tactic was abandoned for a series of carefully-timed and targeted approaches for
each of these segments. These promotions all focused on value creation and benefit
return to the consumer for his/her $500 service contract payment.
insights gained they developed six new touches to establish a relationship. This
was in essence a multimedia campaign.
was based on an insight into the customers’ thinking. For example, customers
said they wanted to be valued and this data inspired the first campaign
element, a telephoned voice message from the company's president 45 days prior
to renewal. The message thanked the customer for their business, referenced the
upcoming contract renewal and announced that further messaging would follow.
This set the tone and laid the groundwork for subsequent communications.
subsequent message was built on a “VOC insight”, e.g., following the call was a
high-quality letter to those who had filed an accepted warranty claim, which included
a personalized summary of the benefits the insured had experienced. This was
based on the insight that these customers did not fully appreciate the value of
their insurance experience and thus had no reason to renew.
For those who
had not filed a claim or had one rejected there was an educational element to
the letter. The next two touches over the next month highlighted the ease of
renewal and the benefits of insurance. A gift card to a home improvement
retailer was included as an incentive as well as a very large 6 x 11"
folded communication highlighting the risks they were running by not renewing.
penultimate touch was a telemarketing effort about two weeks before the
expiration which included a monthly payment option as opposed to a single annual
payment. The last touch, an email marketing campaign, came after expiration of
the lessons drawn from the VOC research, the total renewal effort includes: a recorded
telephone call from the president, three different direct mail pieces, one
personalized telesales call and one final post-expiration email communication.
What did the
marketer learn? In short, listening works. From July to December 2011 the
company experienced an average increase in renewals of 25.5% against the target
of 15%. Results in 2012 continued to be healthy and permitted the company to increase
premium prices by 15%.
Like any campaign,
this one relied on accurate, well maintained data in order to ensure that the insurance
marketer was able to effectively communicate with their customers. Get your
piece of mind by working with Data Services, Inc. to ensure all the postal,
phone and email elements within your database are properly formatted and
cleaned for deliverability!