the ten creative commandments september 15, 2008
TRANSCRIPT
The Ten Creative Commandments
September 15, 2008
•What does “Creative” mean, anyway?
•3 Targeting Commandments
•3 Creative Commandments
•4 Call Center Commandments
•1 Free Bonus Commandment
Agenda
What Does Creative Mean, Anyway?
What Does Creative Mean, Anyway?
Creative (Targeting) Commandment 1
Target based on Lifetime Value of
Policyholder (which is rarely the same as Low
Acquisition Cost!).
Risk Model
Revenue Model
Response and
Conversion Model(s)
Retention Model
+ Policy Premium
- Claims
- Operating Expense
- Acquisition Cost
= Annual Profit
X Life of Product
= Lifetime Value of Policy
Auto Insurance Drivers of Profitability
Names
Credit
X Date
Demos
Events
ProspectDatabase
RegressionModels:•Response/ Conversion •Revenue•Risk•Retention
LCRTargeting
Solicit:•Mail•Phone•E-Mail
Phone Center/Website•Underwrite•Sell Product
ProductDelivery
CaptureResponderData
ResponderDatabase
R4PM Direct — Database Marketing Model
•100+ MM Households•Credit Variables•Predicted Renewal Dates•Demographics•Custom Model Scores •Promotion/Response Tracking•e-mail Addresses
165+ MM Prospect Names
500+ Data Variables
Each
R4PM Direct — Prospect Database
• Individual Level
• Dynamic
• “Psychological” Profile
• Accurate
Power of Consumer Credit Data
0%
5%
10%
15%
20%
25%
30%
35%
40%
NS MM Standard Preferred Ultra
Acquisition Cost
LTV Targeting Drives Higher Underwriting Tiers
0%
5%
10%
15%
20%
25%
30%
35%
40%
NS MM Standard Preferred Ultra
Acquisition Cost Lifetime Value
LTV Targeting Drives Higher Underwriting Tiers
Creative (Targeting) Commandment 2
Keep Testing New Targeting Techniques
and Data
Micro Segment Targeting
Models / Segments States Business Missions
Nation wide Response Model All Improve response
Nation wide Net Response Model All Improve conversion
State Specific Response Model CA, FL, GA, PA, TN, TX Improve response further at state level
Risk Model All Target only preferred tiers
BI Limit Model AllDrop the bottom decile to reduce the percentage of sales with low BI limit, therefore to improve loss ratio
Age Specific Tageting
Segment 1: Age group 30 - 49 AllMarketing allowable is $450 for this segment because it is relatively less credit worthy to MetLife's business.
Segment 2: Age group 50 - 70 AllMarketing allowable is $500. Also, this segment is more responsive to Metlife's DM solicitation, therefore, mail deeper into model deciles.
SCF Targeting FL Eliminating low net yield SCFs. Deeper decile penetration in the best SCF group and top score selection in intermediate SCF group.
MetLife Direct Mail Targeting Methodology
• Compiled Demographics
• Aggregated Auto Data
• Real Property Data
• Survey Data
• Lifestyle Data
• E-mail Data
• Life Event Data
• Direct Response Buyers
• Geo-Demographic Clusters
• Zip+4 Aggregated Credit
Non-Credit Data
Credit vs. Non-Credit Response
0.00%
0.50%
1.00%
1.50%
1 2 3 4 5 6 7 8 9 10
Response Decile
Res
po
nse
Rat
e
Credit Data Noncredit Data
R4PM Predictive Auto Clusters
Percent of Resp Cum Cum Cum Resp CumSegment Mail Qty Mail Qty Resp Rate Index Mail Qty Resp Rate Index
1 28,579 11% 9485 33.19% 480 28,579 9,485 33.19% 480
2 37,187 14% 3067 8.25% 119 65,766 12,552 19.09% 276
3 37,096 14% 1847 4.98% 72 102,862 14,399 14.00% 202
4 50,295 19% 1788 3.56% 51 153,157 16,187 10.57% 153
5 27,897 10% 729 2.61% 38 181,054 16,916 9.34% 135
6 36,708 14% 820 2.23% 32 217,762 17,736 8.14% 118
7 51,368 19% 886 1.72% 25 269,130 18,622 6.92% 100
Response Model Using Responders DataCHAID Analysis
Development Sample: 0601 - 0603 Responders
RESPONSE INDEX
480
11972 51 38 32 25
0
100
200
300
400
500
1 2 3 4 5 6 7
Creative (Targeting) Commandment 3
Get the Channel Attribution Right on Marketing Reports!!
Marketing Channels and Attribution
TV
TM Quote TM Sale
Marketing Channels and Attribution
TV
Banner
Search
Aggregator
TM Quote
Web Quote
TM Sale
Web Sale
Marketing Channels and Attribution
TV
Banner
Search
Aggregator
TM Quote
Web Quote
TM Sale
Web Sale
Marketing Channels and Attribution
TV
Banner
Search
Aggregator
TM Quote
Web Quote
TM Sale
Web Sale
•Putting Response in Correct “Bucket”
•Putting Sales in Correct “Bucket”
•Calculating Media Cost per Sale
Channel Attribution Issues
•Spending Next Tactical Marketing Dollar
•Building Media Specific Targeting Models
•Making Strategic Business Decisions
Channel Attribution Methodology
• Individual Customer Identification Numbers
• Marketing Source Codes
• Name and Address Match
• Factor Analysis
• Dynamic Time Series Regression
• Proportionately “Factor” Leftovers into Marketing Channels
Creative (“Creative”) Commandment 4
Synergize Marketing Channels!!!
Measure the Overall Return
The Tagline Breakthrough!!
The Tagline Results
IM Weekly sales including state to states
0
200
400
600
800
1,000
1,200
1,400
1,600
1,800
1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 29 30 31 32 33 34 35
Week
IM sales IM Group sales IA, PCS, ADG sales State to State sales
Tagline Introduction
Notes:
Association sales are equally divided prior to tagline introduction
Jan - April, monthly mail circ - 3.3m, avg wkly sales 1,548May - Aug, monthly mail circ - 2.2m, avgas wkly sales 1,349
Mail reduction -33%Sales reduction -13%
Jan - April, Sale to mail ratio, 448 to 1 itemMay - Aug, Sale to mail ratio, 360 to 1 item
Creative (“Creative”) Commandment 5
Keep Boldly Testing NEW Creative (Not Just Incremental Tweaks)
Try us again
Integrated Marketing
Integrated Marketing
Is less more or can be more be less?
Thou shall not test too much!
Creative (“Creative”) Commandment 6
Too Much Testing!!
Creative (Call Center) Commandment 7
Account for Your Call Center in Your
Marketing Budget
• Cost To Deliver Response
• Volume
• Cost To Make Sale• Agent Capacity
Mail Telephone/Website
Overall Acquisition Cost Depends on Getting This Balance Right . . .
So Measure in Same Cost Center!!
Balancing Mail and Sales Capacity
Creative (Call Center) Commandment 8
Reward Desired Behavior – Pay Sales Reps Per Phone Call
Creative (Call Center) Commandment 9
Send the Best Phone Calls to the Best
Sales Reps.
Capitalism at Its Finest
•All sales consultants are not created equal
•Lobster tails and Chicken salad
• Secondary skilling vs. Performance Mgmt.
• Penalized for more? What?
• Less turnover – Better Performance
• AHT change of philosophy
Calls to Sales (CTS) Results
0.00
1.00
2.00
3.00
4.00
5.00
6.00
7.00
Jan Feb Mar Apr May Jun Jul Aug Sep Oct Nov Dec
Cal
ls p
er i
tem
2006
2007
2006 – Avg 5.122007 – Avg 3.82
Integrated Marketing
Creative (Call Center) Commandment 10
Raise your Handle Time while Dramatically Increasing Sales?
Integrated Marketing
Average Handle Time
12:34
13:24
14:09 14:13 14:13 14:18
15:22 15:2715:11 15:07
14:2614:42 14:54
10:30
11:24
12:19
13:14
14:08
15:03
15:58
Jul 0
7
Aug 0
7
Sep 0
7
Oct 07
Nov 0
7
Dec 0
7
Jan 0
8
Feb 0
8
Mar
08
Apr
08
May 0
8
Jun 0
8
Jul 0
8
Prior 12 mos Goal - 12:00 mins
Free Bonus Creative Commandment
Have a Strategy!!!