When insurance giant Allstate discovered it was excluding its highest-value customers on digital, it overhauled its strategy. Now, the brand’s primary focus is on Customer Lifetime Value. Marketing Vice President Pamela Moy shares how the company pivoted and found success.
Like many industries, the insurance market has seen dramatic technology shifts in recent years. Because of this, customer expectations are heightened and competition keeps getting more fierce. That prompted us to take a long, hard look to see if Allstate's digital marketing dollars were working as hard as they could—and if our digital strategy was keeping up.
We had always assumed we’d get the best ROI by focusing our digital efforts on net-new customers. But this assumption was wrong. We learned that to drive long-term growth, we needed to nurture the customers we already had. That’s not to say new customers aren’t important. Customer-acquisition will always be a key goal of digital. But it’s also important to use digital to boost Customer Lifetime Value (CLV) at the same time.
You—and your customers—could be missing out
Initially, we started this process because we wanted to learn more about who our customers were and what they knew about our offerings. We gleaned insights from Google Surveys, which we then validated with internal research.
The results were shocking. While 70% of current Allstate customers used digital to research their next policy, only one in five knew that we offered products different from what they currently had. We also found that one in three weren’t aware of the savings they could get through bundling policies.
Until recently, we approached this type of multi-policy cross-selling as an offline activity, leaving it to local agents when existing customers called them. That in itself was based on the faulty assumption that all incoming calls were sales opportunities. We discovered that, unfortunately, sometimes customers called us to cancel a policy—not exactly the best time to cross-sell.
The good news is that this pointed the way to another opportunity. We realized we needed a digital-first touchpoint to assist the huge percentage of current customers who were searching for additional insurance online, but who had no idea what else we offered or that we could save them money.
Chances are, you have similar customers who are basically searching the digital landscape, cash in hand, for services you already offer.
Digital can be personal
Like us, you may focus your online efforts on new-customer acquisition because you believe cultivating existing customers requires a personal touch that can’t be achieved via digital. Half of that statement is no longer true. You’ll always need the personal touch to keep existing customers loyal. But new technologies make it possible to be as personalized online as you are offline—and in some cases, even more so.
New technologies make it possible to be as personalized online as you are offline—and in some cases, even more so.
In light of our findings, we’ve revamped our segmentation, and organized current customers into more than 40 groups to better understand their specific needs. Working with Google, we discovered rich insights about each group, such as mobile usage and shopping behavior patterns, that helped inform our audience targeting and messaging strategies.
Using Customer Match, we were able to leverage this first-party data and meet each customer group with personalized messaging. For example, a customer who has auto and home insurance and is searching for life insurance will get a tailored message directing her to a landing page describing the benefits of bundling her policies. We then follow up with sequential messaging to help her locate her closest agent.
And, by coupling our customer data with Google’s intent signals, we’re able to predict and deliver on customers’ needs more efficiently than individual agents ever could. That works both ways. Agents can now access known customer data and can get right to providing personalized advice. They’re not wasting time gathering foundational facts.
By coupling our customer data with Google’s intent signals, we’re able to predict and deliver on customers’ needs more efficiently than individual agents ever could.
The results so far have been very promising. Many customers who were “at-risk” are now stable. More important, cross-selling to current customers through Search and YouTube is four times more cost effective in generating sales than trying to acquire new customers.
Adding value to your valued customers
And this is just a starting point. Our next step is to look more closely at the segments within our existing customer base so we can prioritize CLV, such as who might be in the market for a second or third insurance policy in the next 12 months. We’re also breaking down the lifetime value of each policy to more fully understand our highest-value customer segments.
The real key is learning who your highest-value customers are, then assisting them in a way that cultivates lifetime value—for them, and for you.
Growing your brand isn’t achieved by focusing marketing efforts solely on attracting and converting new customers. The real key is learning who your highest-value customers are, then assisting them in a way that cultivates lifetime value—for them, and for you.