By Stan Ivankovic
Toronto, ON (Apr. 7, 2014) – For most companies, the keys to success require meeting the needs of current customers, attracting new prospects and increasing brand awareness. But when a company knows little about its current customers, has relied for years on word-of-mouth marketing and faces increasing competition from rivals, the prospects for success can seem challenging.
That was the situation confronting Erie Mutual Insurance Company several years ago when it embarked on a “re-engineering” campaign to improve its sales and marketing efforts. In many ways, the re-boot was long overdue. Founded in 1871, Erie Mutual currently serves more than 3,300 policyholders in the Haldimand-Niagara Region of Ontario with its team of sales agents, underwriters and loss prevention officers. As one of 44 mutual insurance companies operating in the province, it has grown and prospered over the years offering a full line of farm, home, auto and personal liability insurance.
But after nearly a century-and-a-half in business, Erie Mutual found itself treading water in a forgotten consumer cove. Recent surveys showed that although claims and policyholder experience was rated high—and validated by impressive retention rates—brand awareness was low. The industry was changing, with increased regulatory pressures and low-price competition from big direct writers—not to mention the game-changing presence of the Internet. After years of relying on word-of-mouth referrals, Erie’s sales agents were struggling to develop new business. While other insurance companies were moving to web-based platforms and downsizing their sales force, Erie Mutual wanted to increase its agent network to deepen the relationship between policyholders and the company.
“We didn’t have a good grasp of our customers and prospects,” says John Dunton, the president and CEO of Erie Mutual, from his office in Dunnville, Ont. “But we were launching a growth strategy which was high-touch and relationship-driven. We knew we were facing a big challenge.”
To meet that challenge of becoming more customer-centric despite a lack of customer information, Erie Mutual turned to an innovative solution: data analytics. Increasingly, businesses and not-for-profits are leveraging data—from internal and external research sources—to guide a variety of operations: customer acquisition, product development, merchandising, media planning, cross-selling and site location analysis. While many mutual insurance companies are awash in data about policyholder accounts—the square footage of homes, number of cars, size of premiums—their information base focuses on underwriting and typically lacks critical demographic and lifestyle data to execute a more informed and targeted marketing strategy.
“Insurance is a highly statistical business,” explains Dunton. “We have all this quantitative data on the value of a property and how much our policyholders spend on a policy. But we don’t know the qualitative characteristics about how they spend their time and money outside of insurance.”
The effort to gain that customer intelligence began in December 2012 when Erie Mutual engaged Environics Analytics (EA), a Toronto-based company that specializes in data-based marketing and analytics. EA researchers first analyzed Erie Mutual’s active customers with PRIZMC2, a segmentation system that classifies Canadians into 66 lifestyle types—with names like Back Country Folks, Rods & Wheels and Fast-Track Families—based on their predominant demographics, behaviour and attitudes. By knowing where Erie’s current policyholders lived, the PRIZMC2 data allowed marketers to learn how they lived. And because PRIZMC2 is linked to a variety of marketing databases, they were able to develop a 360-degree perspective of each customized consumer segment based on Erie Mutual’s current and potential.
The detailed customer segments helped Erie Mutual understand the potential size of their market, learn more about their policyholders beyond their buying habits and gain insights to guide marketing campaigns. Data-based maps showed the areas in Haldimand-Niagara where Erie Mutual would likely find lookalike prospects—that is, residents who were similar to current customers in their demographics, values and behaviours. And that information helped determine the media mix and how to communicate their unique Mutual value proposition to them. The results helped sales agents identify customers for cross-selling products and rank postal codes in their trade areas for targeting promising prospects.
Armed with this data, Erie Mutual’s marketing team worked to communicate their enhanced understanding of their customers across the company—to sales agents, claims people, even board members. Whereas company marketers previously used anecdotal information to profile their customers, the PRIZM-based data helped Erie Mutual develop its 2014 sales and marketing plan to identify new prospects, target its messages and increase its brand awareness. The company posted billboards in strategic locations in the Niagara region, displayed digital out-of-home screens in a popular regional mall and dispatched mail solicitations to postal codes with high concentrations of prospects—making sure to follow up those cards with personal contacts. And in a burst of outside-the-box thinking, marketers wrapped their fleet of loss-prevention vehicles with brand advertising to capture the attention of customers-on-the-go.
Already, the new campaign has begun to pay off. Revenue from new business climbed 40 percent—nearly twice last year’s growth rate—with much of it coming from the Niagara area where the marketing campaign was focused. Just as gratifying, the company saw an uptick in the number of new policyholders. “We’re benefitting from sending out a targeted message rather than a shotgun message,” observes Dunton. “Anecdotally, we’re hearing from a lot of new customers telling us, ‘You know, we didn’t know you sold insurance in the Niagara area.'” And Dunton is enthusiastic about other initiatives coming in 2014: the launch of a loyalty program, a number of customer appreciation events and a social media campaign.
For a company once considered “so last century,” Erie Mutual is now dedicated to forward-thinking, data-driven analytics to grow its business in a rapidly changing industry. No longer content with maintaining the status quo, now it’s become customer-focused to better respond to demands for new products and new ways to connect with the company. “We’re doing what we need Erie to do,” says Dunton. “But we also think this data-driven approach would be good for a lot of other insurers—and their customers.”
About the Author
Stan Ivankovic is a Sales Consultant in the finance, insurance, travel and telecommunications practice at Environics Analytics ([email protected]). He advises clients on the best ways to use EA’s data products and services to increase their customer base.
About Environics Analytics
Environics Analytics is the premier marketing services and data analytics company in Canada. Specializing in segmentation, site modeling and custom analytics, the Toronto-based company provides data-driven market insights to help its clients grow their business. Its team of veteran modelers and geographic experts are industry leaders in sales forecasting, developing demographic and spending projections, and site location modeling. And it’s a member of the Environics group of companies that offer research, communications and digital services. To learn more about Environics Analytics, please visit www.environicsanalytics.ca.
About Erie Mutual
Founded in 1871, Erie Mutual Insurance Company currently serves more than 3,300 policyholders in the Haldimand-Niagara Region of Ontario. Erie Mutual underwrites and distributes a full line of property and casualty insurance products, including farm, home, auto and personal liability insurance. In addition, it offers commercial insurance to small and medium-sized agriculture-related businesses in Haldimand County and the Niagara Region. Erie Mutual distributes its insurance products through a team of dedicated, professional insurance agents. Each agent is committed to providing their clients with the most appropriate and affordable coverage that best meets their ever-changing insurance needs. For more information, please visit www.eriemutual.com.
Source: Environics AnalyticsTags: analytics, Environics Analytics, Erie Mutual