effective financial criteria for integrated marketing
DESCRIPTION
TRANSCRIPT
![Page 1: Effective Financial Criteria for Integrated Marketing](https://reader033.vdocuments.net/reader033/viewer/2022051610/54859ee6b47959f10c8b4ed7/html5/thumbnails/1.jpg)
1
FINANCIAL MANAGEMENT OF INTEGRATED MARKETING PROGRAMS
Jay JaffePresidentActuarial Enterprises, Ltd.Chicago, [email protected]
September, 2009
![Page 2: Effective Financial Criteria for Integrated Marketing](https://reader033.vdocuments.net/reader033/viewer/2022051610/54859ee6b47959f10c8b4ed7/html5/thumbnails/2.jpg)
2
Integrated Marketing
A marketing process which uses coordinated
distribution channels, media and messages to improve
profitability
![Page 3: Effective Financial Criteria for Integrated Marketing](https://reader033.vdocuments.net/reader033/viewer/2022051610/54859ee6b47959f10c8b4ed7/html5/thumbnails/3.jpg)
3
The 5 Risk Elements of any Insurance Marketing Program
Claims Persistency Administrative Expenses Investment returns Marketing costs
![Page 4: Effective Financial Criteria for Integrated Marketing](https://reader033.vdocuments.net/reader033/viewer/2022051610/54859ee6b47959f10c8b4ed7/html5/thumbnails/4.jpg)
4
The 5 Risk Elements of any Direct Marketing Program (in order)
1. Marketing costs
2. Persistency
3. Claims
4. Administrative Expenses
5. Investment returns
![Page 5: Effective Financial Criteria for Integrated Marketing](https://reader033.vdocuments.net/reader033/viewer/2022051610/54859ee6b47959f10c8b4ed7/html5/thumbnails/5.jpg)
5
The Primary Risk Element of any Direct Marketing Program
MARKETING COSTS
![Page 6: Effective Financial Criteria for Integrated Marketing](https://reader033.vdocuments.net/reader033/viewer/2022051610/54859ee6b47959f10c8b4ed7/html5/thumbnails/6.jpg)
6
Why Marketing Costs are the #1 RISK ELEMENT
![Page 7: Effective Financial Criteria for Integrated Marketing](https://reader033.vdocuments.net/reader033/viewer/2022051610/54859ee6b47959f10c8b4ed7/html5/thumbnails/7.jpg)
7
Why Marketing Costs are the #1 RISK ELEMENT
$$$ are spent < any policy is sold When marketing costs > marketing
allowances, it is unlikely that: The costs will be recovered; and The product will be profitable
![Page 8: Effective Financial Criteria for Integrated Marketing](https://reader033.vdocuments.net/reader033/viewer/2022051610/54859ee6b47959f10c8b4ed7/html5/thumbnails/8.jpg)
8
![Page 9: Effective Financial Criteria for Integrated Marketing](https://reader033.vdocuments.net/reader033/viewer/2022051610/54859ee6b47959f10c8b4ed7/html5/thumbnails/9.jpg)
9
Integrated Marketing Introduces Complications
as a Result of Multiple Distribution Channels,
Media and Messages
![Page 10: Effective Financial Criteria for Integrated Marketing](https://reader033.vdocuments.net/reader033/viewer/2022051610/54859ee6b47959f10c8b4ed7/html5/thumbnails/10.jpg)
10
(Internet)
(Agents)
(Worksite) (Telemarketing)
![Page 11: Effective Financial Criteria for Integrated Marketing](https://reader033.vdocuments.net/reader033/viewer/2022051610/54859ee6b47959f10c8b4ed7/html5/thumbnails/11.jpg)
11
(Radio)
(PDA)
(TV)
(Mail)
![Page 12: Effective Financial Criteria for Integrated Marketing](https://reader033.vdocuments.net/reader033/viewer/2022051610/54859ee6b47959f10c8b4ed7/html5/thumbnails/12.jpg)
12
(Fear)
(Free)
(Family)
(Action)
![Page 13: Effective Financial Criteria for Integrated Marketing](https://reader033.vdocuments.net/reader033/viewer/2022051610/54859ee6b47959f10c8b4ed7/html5/thumbnails/13.jpg)
13
We’ve Created the Classic ….
![Page 14: Effective Financial Criteria for Integrated Marketing](https://reader033.vdocuments.net/reader033/viewer/2022051610/54859ee6b47959f10c8b4ed7/html5/thumbnails/14.jpg)
14
&
![Page 15: Effective Financial Criteria for Integrated Marketing](https://reader033.vdocuments.net/reader033/viewer/2022051610/54859ee6b47959f10c8b4ed7/html5/thumbnails/15.jpg)
15
And, We Tend to Create a
Mentality at Our Companies
![Page 16: Effective Financial Criteria for Integrated Marketing](https://reader033.vdocuments.net/reader033/viewer/2022051610/54859ee6b47959f10c8b4ed7/html5/thumbnails/16.jpg)
16
![Page 17: Effective Financial Criteria for Integrated Marketing](https://reader033.vdocuments.net/reader033/viewer/2022051610/54859ee6b47959f10c8b4ed7/html5/thumbnails/17.jpg)
17
The Odd Couple
Jack Klugman (Oscar) and Tony Randall (Felix)
![Page 18: Effective Financial Criteria for Integrated Marketing](https://reader033.vdocuments.net/reader033/viewer/2022051610/54859ee6b47959f10c8b4ed7/html5/thumbnails/18.jpg)
18
Some Examples of Silos Distribution systems within a
company operate that independently Media managers each having their
own plans, budgets and bonuses Underwriters only worrying about
claims
![Page 19: Effective Financial Criteria for Integrated Marketing](https://reader033.vdocuments.net/reader033/viewer/2022051610/54859ee6b47959f10c8b4ed7/html5/thumbnails/19.jpg)
19
The result is that very few insurers have a recognizable and consistent message --- which may mean they don’t have a picture of where they are going.
![Page 20: Effective Financial Criteria for Integrated Marketing](https://reader033.vdocuments.net/reader033/viewer/2022051610/54859ee6b47959f10c8b4ed7/html5/thumbnails/20.jpg)
20
![Page 21: Effective Financial Criteria for Integrated Marketing](https://reader033.vdocuments.net/reader033/viewer/2022051610/54859ee6b47959f10c8b4ed7/html5/thumbnails/21.jpg)
21
The Secret to
Financially Managing Integrated Marketing
is ????
![Page 22: Effective Financial Criteria for Integrated Marketing](https://reader033.vdocuments.net/reader033/viewer/2022051610/54859ee6b47959f10c8b4ed7/html5/thumbnails/22.jpg)
22
The Answer: Integrating Marketing
![Page 23: Effective Financial Criteria for Integrated Marketing](https://reader033.vdocuments.net/reader033/viewer/2022051610/54859ee6b47959f10c8b4ed7/html5/thumbnails/23.jpg)
23
![Page 24: Effective Financial Criteria for Integrated Marketing](https://reader033.vdocuments.net/reader033/viewer/2022051610/54859ee6b47959f10c8b4ed7/html5/thumbnails/24.jpg)
24
INTEGRATED MARKETING =
JIG SAW PUZZLE
You need to look at both the BIG PICTURE
and all the LITTLE PIECES
in order to get everything to fit together
![Page 25: Effective Financial Criteria for Integrated Marketing](https://reader033.vdocuments.net/reader033/viewer/2022051610/54859ee6b47959f10c8b4ed7/html5/thumbnails/25.jpg)
25
Lead Cost: An Example of Non-Integrated
Marketing in an Integrated Marketing Program
![Page 26: Effective Financial Criteria for Integrated Marketing](https://reader033.vdocuments.net/reader033/viewer/2022051610/54859ee6b47959f10c8b4ed7/html5/thumbnails/26.jpg)
26
Lead Program Facets Multiple lead sources Cost of leads varies dramatically by
source Paid policies (conversion) results
are not uniform Value of a “name” for “after sales” is
not easily determined Which area owns the leads?
![Page 27: Effective Financial Criteria for Integrated Marketing](https://reader033.vdocuments.net/reader033/viewer/2022051610/54859ee6b47959f10c8b4ed7/html5/thumbnails/27.jpg)
27
Developing a Lead Program = An Investment Strategy
The problem: All leads are not equal in cost --- so how do you chose which leads to acquire?
![Page 28: Effective Financial Criteria for Integrated Marketing](https://reader033.vdocuments.net/reader033/viewer/2022051610/54859ee6b47959f10c8b4ed7/html5/thumbnails/28.jpg)
28
#1 LEAD SELECTION
CRITERIA (theoretically)The leads that produce the lowest cost per paid policy!
![Page 29: Effective Financial Criteria for Integrated Marketing](https://reader033.vdocuments.net/reader033/viewer/2022051610/54859ee6b47959f10c8b4ed7/html5/thumbnails/29.jpg)
29
But What About? The cost of leads given to agents who
don’t even use the leads? Leads that can be recycled and
produce other business? The value of revenue from products
marketed by other companies that are sold to your customers?
![Page 30: Effective Financial Criteria for Integrated Marketing](https://reader033.vdocuments.net/reader033/viewer/2022051610/54859ee6b47959f10c8b4ed7/html5/thumbnails/30.jpg)
30
AND
OTHER QUESTIONS
![Page 31: Effective Financial Criteria for Integrated Marketing](https://reader033.vdocuments.net/reader033/viewer/2022051610/54859ee6b47959f10c8b4ed7/html5/thumbnails/31.jpg)
31
Modeling Integrated Marketing Activities is Very Complicated
(Live Oak Tree)
![Page 32: Effective Financial Criteria for Integrated Marketing](https://reader033.vdocuments.net/reader033/viewer/2022051610/54859ee6b47959f10c8b4ed7/html5/thumbnails/32.jpg)
32
Decision Making for Integrated Marketing Systems
Requires complicated analytic models Calls for acquiring additional data but only
when it will improve the quality of a decision and at an affordable cost
Is partly a scientific and partly a gut reaction process but decisions should be made using more than an “I think” basis
![Page 33: Effective Financial Criteria for Integrated Marketing](https://reader033.vdocuments.net/reader033/viewer/2022051610/54859ee6b47959f10c8b4ed7/html5/thumbnails/33.jpg)
33
Some Things You Need to do if You Want to Make Quantitative
Decisions Create comprehensive data bases Identify the key metrics that need to be
tracked and understood Start with simple models Increase the complexity of models as you
gain knowledge Recognize the team aspects of Integrated
Marketing
![Page 34: Effective Financial Criteria for Integrated Marketing](https://reader033.vdocuments.net/reader033/viewer/2022051610/54859ee6b47959f10c8b4ed7/html5/thumbnails/34.jpg)
34
The Team Multiple marketing types Underwriters Actuaries Lawyers IT people Claim processors Etc.
![Page 35: Effective Financial Criteria for Integrated Marketing](https://reader033.vdocuments.net/reader033/viewer/2022051610/54859ee6b47959f10c8b4ed7/html5/thumbnails/35.jpg)
35
REMEMBER RULER #1: REMEMBER RULER #1: IF YOU CAN’T IF YOU CAN’T MEASURE IT, MEASURE IT, DON’T DO IT.DON’T DO IT.
![Page 36: Effective Financial Criteria for Integrated Marketing](https://reader033.vdocuments.net/reader033/viewer/2022051610/54859ee6b47959f10c8b4ed7/html5/thumbnails/36.jpg)
36
![Page 37: Effective Financial Criteria for Integrated Marketing](https://reader033.vdocuments.net/reader033/viewer/2022051610/54859ee6b47959f10c8b4ed7/html5/thumbnails/37.jpg)
37
EXAMPLES OF TARGETS Profit Claims (mortality, morbidity, etc.) Lapses Conversion rates Expenses:
Marketing Administrative
![Page 38: Effective Financial Criteria for Integrated Marketing](https://reader033.vdocuments.net/reader033/viewer/2022051610/54859ee6b47959f10c8b4ed7/html5/thumbnails/38.jpg)
38
Actual to Expected Ratios A/E rations are helpful because they
give you an instant picture If conversion rate A/E = 105%, then
good If lapse rate A/E = 105%, then bad
![Page 39: Effective Financial Criteria for Integrated Marketing](https://reader033.vdocuments.net/reader033/viewer/2022051610/54859ee6b47959f10c8b4ed7/html5/thumbnails/39.jpg)
39
The new direct marketing is an information-driven marketing process,
made possible by database technology, that enables marketers to develop, test, implement, measure, and appropriately modify customized marketing programs
and strategies.
From The New Direct Marketing, David Sheppard Associates, p. 3
![Page 40: Effective Financial Criteria for Integrated Marketing](https://reader033.vdocuments.net/reader033/viewer/2022051610/54859ee6b47959f10c8b4ed7/html5/thumbnails/40.jpg)
40
NEW INSURANCE PROGRAM ASSESSMENT FORMULA
Excellent
Good
Average
Poor
![Page 41: Effective Financial Criteria for Integrated Marketing](https://reader033.vdocuments.net/reader033/viewer/2022051610/54859ee6b47959f10c8b4ed7/html5/thumbnails/41.jpg)
41
THE ULTIMATE TEST OF A PRODUCT
WILL THE
EAT THE ???
![Page 42: Effective Financial Criteria for Integrated Marketing](https://reader033.vdocuments.net/reader033/viewer/2022051610/54859ee6b47959f10c8b4ed7/html5/thumbnails/42.jpg)
42
![Page 43: Effective Financial Criteria for Integrated Marketing](https://reader033.vdocuments.net/reader033/viewer/2022051610/54859ee6b47959f10c8b4ed7/html5/thumbnails/43.jpg)
43
THE INSURANCE DIRECT MARKETING FORUM 2009