Tower
Sector: Insurance
Audience: Existing Tower customers
Campaign: Direct mail
Purpose: Cross-sell insurance products
Details: Mailed to over 40,000 customers
Three creative variables
Multiple offer variables
Response: ROI for the campaign was 275% in the first year of the new policy alone
Tower is a leader in the insurance market, offering insurance for home, contents, income, health, life and more. By analysing their customer base, in 2003-04 Tower was able to accurately target existing customers and cross-sell other Tower insurance products. As well as growing Tower business, having customers with multiple policies significantly increased retention. Return on investment was 275% in the first year alone.
The Challenge
- Cross-selling insurance products makes sense. It builds the customer relationship, grows business and enhances retention. But Tower lacked in-depth information on its customers and did not have the ability to carry out sophisticated communications tracking. So the challenge was to:
- Develop an effective cross-sell strategy that made the most of available information to target those Tower customers most likely to take on additional policies, offering them the right products for their needs.
- Develop compelling creative and offers that got them to take up additional policies.
- Track responses and fine-tune strategies and creative on an ongoing basis.
- Increase the average number of policies held by each Tower customer.
The Thinking
- First target customers with only one Tower insurance policy, followed by those with two policies. Single policy holders were the strongest prospects because they had the most potential to take up additional policies, and they would make the largest potential savings from package discounts.
- Also target new Tower customers. These policy holders are proven to have a higher propensity to take up another policy than long-time customers.
- Develop a warm-hot ranking, depending on what policies customers could potentially take up. Some insurance, such as vehicle, is more difficult to cross-sell.
- Note other profiling parameters such as age, income and home ownership and add these to the propensity model.
- Develop creative to match the profiling. Test variables including format, timing and special offers.
- Make offers reflect the creative concept, for example with the chance to win a $1000 worry-free day, a free car cleaning kit.
- Keep doing the same on an ongoing basis.
The Results
- Average rate of taking up an additional policy was 5.6%
- Average number of policies held by each Tower customer that was mailed rose from 2.1 to 3.2
- ROI for the campaign was 275% in the first year of the new policy alone
“Direct mail allowed us to talk to our customers in a way that strongly supported our 'sort out your worries' brand positioning. It offered each customer the options they needed, in a way that was convenient, personalised and very compelling."
Sean Butler, Customer Communications Manager
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