Creating a Segment of One through Predictive Personalisation

Most sane marketing people would agree that the objective of marketing is to maximise customer satisfaction and sales at the optimal price. Decades of economic and business theory and analysis has been ploughed into describing how to get there, involving everything from elasticity of demand and supply, through embracing chaos to a modern day focus on mass segmentation  and customer journey planning.

However, to derive the best possible performance from marketing in the insurance industry I would like to propose an equation which summarises where modern marketing has arrived at today.

(360° +I+P) * NBA = OO

Here, 360° is the 360-degree view of the customer, “I” represents the intent for the interaction, “P” = the process to get you there, and “NBA” is the next best action it is possible to undertake in the process.  The letters “OO” describe the optimal outcome for both the customer (sometimes the end client, sometimes an intermediary and mostly both) and the insurer.  Let’s analyse what this means and how it drives marketing performance to new levels of achievement.

Achieving a 360° view of a customer has long ago become step 1 in any serious modern marketing programme. IT has moved to the point where this is cost effective and easy to achieve, both for static analysis, e.g. interrogating a data warehouse, or dynamically pulling together data on the fly for one-off activity. However, this traditional 360°  view of customer is now no longer anywhere near sufficient as it only tells you “who” the customer is.

You need to build on this with an understanding of Intent. As Steven Covey famously said in The Seven Habits of Highly Effective People, “Begin with the end in mind”. This ensures you understand “what” you are trying to do with your customer and “why” you are trying to do it. Without this, you flounder in the world of creating profile but falling short of your goal.

The third dimension of Process tells you the “when,” “where,” and “how” to fulfil the customer’s needs. Often the quality of the customer experience is defined by the efficiency and effectiveness of the steps required to achieve the intent.

Putting these all together enables you to see the whole picture and many insurers have now reached the stage where they fully understand this, even if it is not always brought to fruition yet.

However, in 2013 the really smart money in insurance marketing is being put into NBA. While a lot of commentators are thinly disguising and promoting this as “Big Data” in order to sell data warehouse solutions and data feeds, the truth is you can start NBA with medium or even small data. That is, as long as you have an agile solution which uses smart analytics to drive a better and evolving customer experience and the perfect outcome for both sides. This can be achieved by ensuring that whatever distribution channel the customer uses; mobile, on-line, contact centre, the response is consistently the best that the individual customer can expect. Smart, predictive analytics solutions can now instantly identify all the data available about a customer and decide on the basis of a set of rules exactly what the company would advise as the next best action if the most experienced staff had unlimited time to research and analyse the background and value of that customer. In effect, every operator becomes and instant expert and every customer becomes a unique segment of one through predictive personalisation. NBA is the factor which can really drive Net Promote Scores that result from interactions, unerringly upwards towards the Advocate category. 

This is not “futures” or hype – the smart companies are already doing it.