Brand: LV=
Brief: To build an in-house database to combine affinity partner data with customer data
Supplier: Occam
CHALLENGE
Liverpool Victoria is an insurance brand perhaps best known for its advertising spokeswoman, Cilla Black. A major generator of business for the firm, now known as LV=, is a network of affinity partnerships with large unions, trade associations such as the Royal College of Nursing, and leisure groups.
Direct mail is a primary channel for LV= to reach the members of its eight affinity partners, as well as advertising, web links and banners. But declining response rates for mailshots were a problem.
At issue was the fact that the company had historically used traditional processing services to manage and prepare the affinity data on a campaign-by-campaign basis. This meant LV= was unable to profile data or tailor mailpacks to the individual recipients.
"Every time we had a list sent to us from one of our partners, we had to spend of a lot of time and money processing and cleaning it," says Tara Riches, LV's partnerships sales and marketing manager. "We could do ad hoc profiling on the database but couldn't overlay the experience of previous mailing campaigns or do propensity modelling on our prospects and customers."
To add to the complexity of the task, LV= wanted to save £100,000 a year on mailing costs per partner.
EXECUTION
The solution was a new database containing affinity member and LV='s own customer data. It asked Occam to create and host this database, which would have web-enabled access for LV= and its affinity partners to do their own mailings. "To begin with we focused on the benefits for LV=, but it soon became apparent that there could be benefits for our partners too," Riches explains.
RESULTS
Occam's advice to LV= had been to mail fewer people and concentrate on its profitable customers. Now that LV= has access to a mailing history, over-mailing can be avoided, while data profiling gives it greater guidance on mailpack design. An analytical tool evaluates the use of trigger-based marketing campaigns and improves targeting.
However, all eyes were on how the 'Dynamic Database' would perform response-wise - and LV= was not disappointed. A mailing to Royal College of Nursing members boosted motor insurance conversion from 14 per cent to 32 per cent, and home insurance from 27 per cent to 30 per cent. Cost per response on motor mailings fell by 41 per cent.
"Insurance is competitive and the web has become the predominant channel," Riches says. "With the Dynamic Database we are able to target the right people with strong propositions to compete with the price-comparison sites. It's a means of getting an acceptable response from direct mail, which I believe is here to stay."
POWER POINTS
- LV= asked Occam to create a database containing its own information, and that of affinity partners
- The firm's mailpacks are now generating better response rates and costing less per response.