Reference no: EM13305980
The Insight team for a major household insurance company have generated a new customer segmentation, which could help improve direct mail acquisition marketing through better tailored selections.
This segmentation has been live tested for the first time against a 500k mailing file, summarised by colour segment below. Potential customers were highly incentivised by a free gift introductory offer. Customers were sent this gift on response alongside their welcome letter - customers are asked to return this gift (free of postage charge) if they change their minds or cancel their policy within the first 90 days.
| Direct mail cold acquisition mailing results (using introductory offer) |
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| Customer Segment |
Total records mailed |
Total customers responded |
Total (of responders) paid the full 90 days initial contract period |
Total responders who cancelled within 90 days (no payment), and did not return their free gift incentive |
Total responders who cancelled within 90 days (no payment), but did return their free gift. |
| green |
300,000 |
9,000 |
7,500 |
500 |
1,000 |
| blue |
100,000 |
5,000 |
3,500 |
1,000 |
500 |
| amber |
50,000 |
3,500 |
2,000 |
1,350 |
150 |
| red |
50,000 |
5,000 |
2,000 |
2,950 |
50 |
| Total |
500,000 |
22,500 |
15,000 |
5,800 |
1,700 |
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Case Study Task
Please explore the data (found in the data tab), perhaps using percentages, charts, and additional columns on the data as you see appropriate.
Then answer the following questions
"How could this segmentation be best utilised for direct marketing activity - is it a success, should it be used at all?
How you would design the next campaign - would you do anything different?
What other ways could you segment the data?
What are the future considerations for measurement and evaluation? "
Assumptions
You can assume that your audience has already been introduced to the new segmentation, and you are presenting to the finance manager, and the marketing communications team.
If required, you can assume the initial mailing cost is 60p per mailed, with fulfilment of the free gift costing £25 plus 80p postage per responder. The average policy for this company is billed at £30 per month, under a 12 month agreement.
You are also permitted to make any further assumptions you feel necessary to construct your presentation - if used, please state these at the beginning of the presentation.
NOTE: There is no 'correct' answer to this exercise - the most important aspect is the insight and recommendations gleaned from exploring and interpreting the results.