One of the big challenges for AA Insurance in 2014 was how they were going to sell more car, home and contents policies to its customer base. Historically the business had a lower risk per customer average than competitors. When assessing a range of opportunities to achieve this, using insight and data-driven marketing made sense. With a wealth of customer data and an experienced team, a move away from one-size-fits-all communications was possible.
From this a simple idea was formed: build a lifetime value model that provides the insight for each customer and the way they’re managed and communicated with, now and in the future. This could then be used to guide the customer management programme. They knew how hard it was set up and use well, so believed it could give them a commercial advantage over their competitors.
The Lifetime Value and Contact programme called ‘In it for life’ was born. The vast amount of historical data held by AA Insurance was used to create an insight and communications platform.
The development of the single customer view meant AA Insurance needed to identify all of a customer’s insurance relationships. This required the development of a set of rules to link policies across different customer definitions, including policy owner, policy beneficiary, trusts, and businesses. Being more thorough at identifying and linking these relationships meant creating the view using traditional name and address matching only wouldn’t work. To start with, six disparate internal and external systems needed to be aligned, after which millions of records were iteratively processed to create a customer network of historical and current insurance. The rule set was optimised to run efficiently by only including data and rules that directly contribute to the most up-to- date view, eliminating millions of iterations in the process.
The programme strategy had three main components:
1. Developing a Lifetime Value Relationship and Targeting Tool to create an increased certainty around where budget was allocated. The resulting insight was then used to understand customers’ needs, moments in the future when they would be reconsidering their insurance, and how much could affordably be invested to produce sales;
2. Building a Contact Testing Framework to validate how well the programme was working, and which
campaign mechanics worked most effectively across our different segments;
3. Creating a Contact Programme made up of a suite of coordinated, connected, and tailored DM that
reflected a customer’s future value, needs, and relationship with the brand. The mail was designed
around segment profiles, customer needs and motivations. The contacts included Welcome, mid-year
cross sell and upsell, an at-risk retention contact and an end-of-year surprise and delight.
The heart of the strategy was to align effort and budget on those customers with the most potential. Sales campaign volumes were lowered to eliminate likely non-responders, offers strengthened, and budget reallocated to introduce recognition communications to reinforce that customers are truly appreciated.
Making a complex solution easy for the business ensured the lifetime value model was understood and became an integral part of the AA Insurance marketing programme and produced excellent ROI to the business.