You know that the client has left the company.
You know that it's necessary to present a lower price, if you want to win-back that former customers.
But how low should the price be?
We can answer this question.
Data XL allows insurers to setup the win-back price on a complete insurance pricing strategy.
In our experience with motor the Return On Marketing Investment is >60% (including Data XL fees). Nevertheless, it will depend on the market & LoB.
If the lost customer was a difficult one and refused the past insurer renewal offer we should make a counter offer (but profitable) that the client can not refuse.
The idea is simple:
There is no need to offer a bigger discount - we help insurance companies to offer just a sufficient one!
Companies spend huge sums on direct marketing to win-back customers. Yet the return on marketing investment (ROMI) is often poor because the response rates tend to be very low — usually less than 2% and often less than 0.5% — and rates have been declining.
To cope with this, many organizations (still) use traditional A/B testing approaches, that test one sort of offers versus another.
We take A/B testing to the limit and test several variables/factors at the same time.
Experimental design is an efficient method of in-market testing that can improve the performance of direct marketing.
The power of this statistical approach is that it increases response rates by massively increasing the conditions of win back campaigns and identifying which variables are correlated with the customer's behavior.
Maybe the price was not the true reason for the client's lapse.
In the insurance sector, and in the short run, is very difficult to find why customers left. There are not many touch points in the insurance sector. Claims can be a relevant segment variable, but besides that specific variable we can only use the risk factors and the price of the competitive set.
Data XL has a deep knowledge of customer segmentation towards willingness to come back - we can take the most of the variables that exist to anticipate the client behavior.
But a price discount sometimes is not the most profitable answer. So we ask at least two more probing questions to find out exactly what the insurer could do to improve the offer. Insurers may not get them back at a very profitable price, but will have information to design new products or procedures that are more customer focused.
Data XL platform - Lazarus - has the following modules:
Our mathematical algorithm is more comprehensive than others on the market. In fact, we are the only ones that combine risk cost, competitors' view and derive a willingness to came back function.
Furthermore, while our competitors opt to sell a software platform not a solution, they do not isolate the price from other marketing mix elements. Therefore, their solution is based only on (lowering) the price.
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