Segmentation. Customer Strategy Done Right

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Segmentation

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Welcome: Customer Strategy Breakout

Sanjay Mehra

Vice President of Analytics and Customer Management Direct Business

MetLife

Leah van Zelm

Principal Consultant

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Objective

• Demonstrate elements of cCRM Customer Strategy from the general session

– MetLife’s segmentation solution

– Translation of the segmentation solution into strategy

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Background

MetLife developed a new direct-to-consumer life insurance channel to address the

underserved Middle Market.

MetLife traditionally sold life insurance via agents and brokers, who tend to

focus on a more affluent audience

The company recognized an underserved middle market, broadly defined

as 25-45 years old and $150K income or less

MetLife developed a new channel – direct to consumer – to serve the

middle market * Online * * Call Center *

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Challenges with Original Targeting Strategy

The Middle Market consisted of individuals 25 -45 years old with a household income

under $100k, but MetLife needed more insights than what was available at launch.

Go-to-Market Segments

• Not rich enough to inform customer engagement

• Not actionable enough to drive execution – e.g., not

demographically distinct

• Too many segments to actively manage

• Individuals outside of the “Middle Market” were

becoming customers, but weren’t assigned a segment

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What Segmentation Solution Did MetLife Need?

MetLife engaged Merkle to develop Enterprise segmentation – it had to be strategic

AND tactical in nature.

Strategy

Tactics

Brand Strategy

Segment Prioritization Customer Engagement Value Proposition

Media Budget Allocation Product Planning

Customized Treatment

Media Offline Buying Offer Presentation Messaging & Creative Tactical Targeting

Tactical Targeting Competitive Strategy Positioning

Solution

• Richness: attitudes,

needs, behaviors, brand

relationships, media

usage

• Attributable at the

individual level

• Universal view of

insurance market

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The Solution

Approach

Build value analysis based on policy revenue, acquisition cost, survival model + Develop predicted value model to assign to prospects Deeply understand attitudes tied to life insurance + Needs, purchasing behavior, brand relationships, brand imagery, psychographics Cluster on motivations + Link survey response to national file and develop segment assignment model

+

Robust profiling

Value Analysis _ResearchPrimary Clustering & _Mapping Customer _Strategy

Overall portfolio strategy

+

Segment specific strategies

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The Segments

Young

Achievers Concerned Moms Financially Mature Hum Ho Content Solo

Demographics Younger

Skews male

Young, Middle Age Mostly female Mature Skews male Middle Age Mostly female Mature Male and Female

Attitudes Early adopters,

technical Driven, Risk taker

Price sensitive

Use social media, but not otherwise

technical Don’t know where

to begin Price sensitive Recognize value of insurance Confident about financial matters Least price sensitive Late adopters Risk averse Not primary decision makers and not thinking

about LI

Use social media Mistrustful of financial inst. Least interest in LI

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Developing the Portfolio Strategy

Young

Achievers Concerned Moms Financially Mature Hum Ho Content Solo

% of US 20% 20% 30% 20% 10%

% of MetLife 50% 30% 10% 5% 5%

Lapse Rate Low High Low Medium Medium

Value High Medium Medium Low Low

Target

•Large portion of market •Right for business model

Minimize Cost to Serve

•Prefer face to face •Low conversion •Lower value

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Young Achievers Strategy and Journey

Objective: Fill the funnel

Positioning: Like your parents before you Programs: Heavy digital focus

Better Faster Cheaper

Segment Strategy

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Implementing Segment Strategy

11

Segment

Q1

Q2

Q3

Q4

2014

General • Workshop • LTV update • Case mgmt experience • Quote tool enhancements • Seg Website • MMO by segment • Non Buyer program • Segment performance evaluation • Process improvement • eDelivery Young

Achiever •• Call Cnt Trng DRTV spot • Ratings and Reviews • Display • Landing page • Prod Roadmap • Online App Redesign

Concerned Mom • Call Cnt Trng • DRTV spot

• Display • Landing page • Prod Roadmap • Onboarding • Call routing test

• Online App Redesign

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Example: Concerned Mom’s landing page

This Concerned Mom’s specific landing page will be used in conjunction with a display

campaign targeting this segment.

Family focus

Affordability

Relevant tips

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Anonymous Digital Targeting

Purchase Pixel

Prospecting

Back End

Matching / Identify

Most Attractive

Leads

Anonymous

user with similar

characteristics

is served an ad

Anonymous

Browsing

Visitor Becomes

a Lead

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Example: CSR Training

Awareness of segments

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Example: DRTV spot “Real People”

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Example: Media Planning

• Integrated segments into agency’s media planning tool

• Did this by assigning MRI responders to segments

• Agency changed network and programs purchased

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Product Research

Segment Motivations

Product Features & Benefits

Product Roadmap

• Link existing motivations, beliefs, and decision maps to product features through “laddering” • Identify resonant

communication

approaches to promote it once ready

• Unlike more traditional research techniques, the laddering approach allows organic ideation and provides a rich framework in which to develop product

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Outcome

Strategic and Tactical Targeting

Strategy

Tactics

Brand Strategy

Solution

• Invest primarily in two

segments

• Anonymous digital

targeting

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Outcome

Personalization

Strategy

Tactics

Brand Strategy Segment Prioritization Customer Engagement Value Proposition

Solution

• Segment engagement

strategies

• Website personalization

• Call center personalization

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Outcome

Messaging and Creative

Strategy

Tactics

Brand Strategy

Solution

• DRTV spots

• Digital creative, custom

landing pages

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Outcome

Media Budgeting, Planning, Buying

Strategy

Tactics

Brand Strategy

Solution

• Media mix optimization by

segment

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Outcome

Offer Strategy

Strategy

Tactics

Solution

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Outcome

Positioning

Strategy

Tactics

Solution

• Segment attitudes drive

positioning

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Thank You!

Sanjay Mehra –[email protected]

Vice President of Analytics and Customer Management Direct Business

MetLife

Leah van Zelm – [email protected]

Principal Consultant

Management Consulting Group Merkle