Old Mutual maintains leadership with strategic customer segmentation solution

Old Mutual has successfully aligned its products and marketing campaigns to specific customers, allowing for strategic and accurate cross- and up-selling of products.

SA's largest insurer implemented an analytical segmentation solution from SAS Institute which assisted in defining the organisation's customer segments, as well as analytically defining strategies to develop each segment. The solution was designed to dynamically adapt to meet the changing needs of each customer division.

"We defined four mainstream segments, described by typology in turn as 'first things first', 'aspirers', 'careful controllers' and 'confident planners'," Chris Boonzaier, general manager of Old Mutual, told delegates at SAS Institute's annual European user group conference (seugi21) held in Vienna, Austria recently.

"Each of these segments was determined by the customers' attitude to finance, such as a person's propensity to spend, and then more specifically defined by the clients' particular demographics.

"Demographic segmentation highlighted people profiles and cultural characteristics. For example, we realised that for some segments funeral policies were a priority, whereas in other customer segments, there were other, different priorities."

Old Mutual's segmentation criteria were clearly defined by share of wallet, or spend available for investment in insurance policies. Each of the four segments is supervised by a segment manager whose role it is to constantly understand the current and emerging needs of their customer base.

"The segment manager is also responsible for targeted campaigns to their customers, constant monitoring of insurance activity and client purchase patterns," says Boonzaier.

On a corporate level, the solution has helped Old Mutual to respond to financial regulations and the system has been utilised for the development of lapse analysis and customer lifetime value models.

"The solution has better aligned our products, distribution and service channels to customer needs, thus increasing campaign hit rates and conversion rates, which has an overall positive impact on our bottom line - where a successful business strategy can best be measured," concludes Boonzaier.