Life insurance campaigns that focus heavily on response rates often fail to achieve profitable results
CHALLENGE:
An insurance firm that traditionally relied on response-rate driven segmentation to promote annuities was not attracting profitable customers
Previous campaigns:
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Relied on targeting criteria such as demographics, income, and net-worth estimates
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Had acceptable response rates, yet failed to achieve desired financial metrics
- Did not generate significant annuity initial premium
SOLUTION:
Focus on profit-driven segmentation by enhancing targeting criteria with wealth-based metrics
Annuities require liquid wealth; thus, the firm altered its targeting criteria to incorporate household asset estimates and financial capacity and behavior variables
The firm could now more efficiently allocate responders to the appropriate channel partner:
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High-asset households are assigned to experienced financial planners
- Mid-asset households are assigned to call centers for follow up
RESULTS: Asset-based targeting enables firm to achieve 34% lift in annuity initial premium
Using ASSET-BASED VARIABLES to define the target audience enabled the firm to improve campaign performance:
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Mailing to 30% of prospects yielded about 51% of total initial premium |
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Profit-driven segmentation provides a 34% lift in annuity initial premium over response rate-driven segmentation Results may vary based on actual data and situation. |
