Marketing Transformed… - Market Research Insight · \\mricentral\shares\MRIFILES\2004\Presentations\MRI BLANK TEMPLATE.ppt \ 6/6/06 09:17 7 Insurance Brand Equity!Brand Awareness!Predisposition!Market

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Marketing TransformedMarketing Transformed……

Value of Customer Retention

Verne Kennedy, Ph.D

Market Research Insight

\\mricentral\shares\MRIFILES\2004\Presentations\MRI BLANK TEMPLATE.ppt \ 6/6/06 09:17

3

Presentation Examines Relationships Between:

• Retention

• Satisfaction

• Trust

• Loyalty

• Product Mix

• Operational Efficiency

• Bottom Line Profit


4

MRI Industry Experiences

Insurance

Utilities

Banking


5

MRI INSURANCE STUDIESMRI INSURANCE STUDIES

• Performance & Marketing Study

• Customer Satisfaction

• Claims

• Retention

• New Customers

• Agent Surveys

• Advertising Surveys

• New Products/Services

• Member Value


6

Insurance Satisfaction StudiesInsurance Satisfaction Studies

• Periodic and Tracking Surveys

• Customer Satisfaction ! 64% plus very satisfied

• Loyalty And Other Brand Characteristics

• Primary Insurance Company ! 70% plus

• Components That Correlate With Customer

Satisfaction

• Trend Analysis

• Customer Demographic Clusters


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Insurance Brand Equity

!! Brand AwarenessBrand Awareness

!! PredispositionPredisposition

!! Market PenetrationMarket Penetration

!! Customer SatisfactionCustomer Satisfaction

!! Primary Insurance CompanyPrimary Insurance Company


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Consumer Expectations AndConsumer Expectations AndCompetitive StrengthsCompetitive Strengths

And WeaknessesAnd Weaknesses


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EXPECTATIONS VS. REPUTATIONEXPECTATIONS VS. REPUTATION

80

90

100

110

120

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Influence Index Company Performance Index


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EXPECTATIONS VS. REPUTATIONEXPECTATIONS VS. REPUTATION

80

90

100

110

120

Convenie

ntO

ffic

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Locations

Easy

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onta

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ledgeable

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Insurance Industry Performance Index Company Performance Index


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Loyalty

That which influences customers to:That which influences customers to:

1.1.Reject competitorReject competitor’’s price ors price or

convenienceconvenience

2.2. Increase tolerance of problemsIncrease tolerance of problems

resulting from poor serviceresulting from poor service


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Retention

R = L x CR = L x C

A product of loyalty representing theA product of loyalty representing the

percent of customers maintainingpercent of customers maintaining

their relationship over time.their relationship over time.


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Loyalty Is A Product Of

•• Number of years for a customerNumber of years for a customer

•• How well customer value is metHow well customer value is met

•• Number of products & services providedNumber of products & services provided

•• Quality of customer serviceQuality of customer service

•• Value of relationshipsValue of relationships

•• Certain demographic factorsCertain demographic factors


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For most companies, the most efficientFor most companies, the most efficientway to improve loyalty and retention isway to improve loyalty and retention isby increasing the number of productsby increasing the number of products

and services used.and services used.

Efficient Way to Change FormulaEfficient Way to Change Formula


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New Products

& Services

Improves Customer SatisfactionCustomer Satisfaction

Develops Stronger Customer LoyaltyStronger Customer Loyalty

Increases Efficiency of OperationEfficiency of Operation

Produces Higher Bottom Line ProfitHigher Bottom Line Profit


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Customer Loyalty Increases

Retention

In mature industries such as banking,In mature industries such as banking,

insurance, and utility service, marketinginsurance, and utility service, marketing

resources that effectively increase loyalty andresources that effectively increase loyalty and

retention provide a higher contribution toretention provide a higher contribution to

profitability than equal resources used toprofitability than equal resources used to

acquire new customers.acquire new customers.


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Multiple product marketing developedMultiple product marketing developedin each of these industries in responsein each of these industries in response

to deregulation, competition, andto deregulation, competition, andrealization that Customer Base andrealization that Customer Base andBrand Equity can be more importantBrand Equity can be more important

than historic missions.than historic missions.

Why Change?Why Change?


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In response to deregulation, many of best

performing electric companies marketed:

•• Back-Up GenerationBack-Up Generation

•• Cell Phone ServiceCell Phone Service

•• Electric OutageElectric Outage

NotificationNotification

•• Energy Audit ServiceEnergy Audit Service

•• Fire/Smoke/CO AlarmFire/Smoke/CO Alarm

•• Gas Home ProductsGas Home Products

•• Green PowerGreen Power

•• Home Repair/RemodelingHome Repair/Remodeling

•• Home Security SystemsHome Security Systems

•• Internet ServiceInternet Service

•• Major Credit CardsMajor Credit Cards

•• Power Surge ProtectionPower Surge Protection

•• Satellite TVSatellite TV

•• Tree Trimming/RemovalTree Trimming/Removal

•• Utility Bill InsuranceUtility Bill Insurance

•• Appliance WarrantyAppliance Warranty

ServiceService


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Determining Value of Expanded

Product Base

Compare ratio of primary to totalCompare ratio of primary to total

customers for your company and majorcustomers for your company and major

competitors.competitors.

Best performing institutions have 75%+Best performing institutions have 75%+

customers who consider them to becustomers who consider them to be

their primary insurance company.their primary insurance company.


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Bundling Products & Services

Market Basket Approach using statistical modeling.Market Basket Approach using statistical modeling.

In cross-selling, bundling is a key to success.In cross-selling, bundling is a key to success.

Products should be bundled based uponProducts should be bundled based upon……

• Customer Values

• Generational Needs

• Personal & Family Life Styles

• Demographic Characteristics


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Successful Cross-Selling Requires

• Understanding Your Brand Equity

• Market Basket Analysis for Product Clusters

• Identify Product Most Likely Next Purchase

• Identifying Values Motivating Customer Needs

• Marketing Messages & Delivery Systems

• Managing Customer Relationships


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Advantages of Successful

Cross-Selling

• Improve Loyalty & Retention

• Higher Customer Satisfaction Index (CSI)

• Improved Efficiencies of Operation

• Market Basket Analysis Constantly Redefines Your

Customer Base

• You Become More Knowledgeable About Your

Customers and Their Needs

• Higher Profitability


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How To Contact Us…

MRI HEADQUARTERS

630 East Government Street

Pensacola, FL 32501

Tel: (850) 433-9191

Fax: (850) 433-9778

Email: [email protected]

Web: www.mri-research.com

Documents

Marketing Transformed… - Market Research Insight · \\mricentral\shares\MRIFILES\2004\Presentations\MRI BLANK TEMPLATE.ppt \ 6/6/06 09:17 7 Insurance Brand Equity!Brand Awareness!Predisposition!Market