Insurance Firms Discuss Data Analytics Maturity and Customer Experience

Copyright©Epsilon2016EpsilonDataManagement,LLC.Allrightsreserved.Copyright©Epsilon2016EpsilonDataManagement,LLC.Allrightsreserved.
Source: Bain Digital Insurer of the Future Benchmarking, 2014–2015
“Insurers expect an
increase in the use
of Big Data across
all functions”

Copyright©Epsilon2016EpsilonDataManagement,LLC.Allrightsreserved.
Source LIMRA: Big Data Analytics in Financial Services 2016
“nearly
surveyed
are exploring use of big
data analytics in customer
experience, underwriting,
product development, and
actuarial areas.”
50% of
companies

Chris Campbell
CNO Financial

“The most active
area for big data
analytics is
marketing.”

with the right mix of
technical and analytical
skills with good
communication and
business skills.”
“Shortage of
analytical talent

Carl Madaffari
Epsilon

Source: Samantha Chow, Aite Group
The with
which analytics is used
along the insurance value
chain
it is being used
intensity
does not mean
successfully or
effectively.

Source: Forrester April 2016
of marketers are
to help
achieve their goals.
63%
prioritizing the
implementation of
technology
investments

Dave Edington
Epsilon

of businesses
consider improving the
72%
customer experience
a top priority.

Christopher Campbell, SVP Marketing & Communication, CNO Financial
Carl Madaffari, SVP Innovation and Marketing Technology, Epsilon
David Edington, SVP Industry Strategist, Epsilon
From historic to batch to streaming, where is your firm on the data continuum? There is an abundance
of real-time data that can be used to anticipate consumer needs and engage them with more
meaningful, relevant, and helpful experiences. What steps can you take to accelerate your firm’s data
and analytics maturity? This session will highlight how organizations can fully leverage the abundant
data assets available and showcase examples of what this can look like.
11

13
Chris Campbell
CNO Financial
Carl Madaffari
Epsilon
Dave Edington
Epsilon
13

14
Data, analytics & marketing maturity model
relevancy >>>
sophistication>>>
“your intent”
“their intent”

Context
15

Focused on middle-income
Americans, near
and in retirement
16

17
The struggle to evolve customer experience
Common
barriers
• Data prevents single
view of the customer
• Lack of clarity on which
elements of CX are most
critical to improve
• Limited insights into
customers’ true needs –
including needs they are
not yet aware of
• Lack of customer
feedback – or a culture
that values it
• Organizational siloes;
different teams
responsible for
different channels
• CX is overwhelming
compared to other
initiatives
• Lack of team members with
the right skills, passion
• Budget limitations
• Legacy systems limit
ability to evolve the
experience (particularly
via digital channels)
• The marketers who “own”
the CX are not tech experts
• Concerns about privacy,
security
• Data not fully captured on
how customers are currently
engaging, and where

18
Shifting CXO mindset
“We’re not going to war with cars, we’re going to
war with how we attract people to our brands.”
John Tague, CEO at Hertz, July 2015

19
Default push
marketing:
Program-centric
(brand, channel)
messaging
relevancy >>>
sophistication>>>
“your intent”
“their intent”

20
Push
Focus Product
Marketing Batch and blast marketing
Message Single message
Channel Single channel
Analytics Foundational
Technology No CRM, disconnected tools
Depth of customer connection
Level of
CRM
maturity
Marketing maturity building blocks

21
Excellence in DM, DRTV, and some print –
In 2010 we dropped over
30 million pieces, as one of
the largest health insurance
mailers in the country.

Pretty good models
22
Declining response rates
New phone patterns
More digital interaction

23
Excellence in DM, DRTV, and some print –
no segmentation, no mix, no digital
In 2010 we dropped over
30 million pieces, as one of
the largest health insurance
mailers in the country.

24
relevancy >>>
sophistication>>>
“your intent”
“their intent”
Default push
marketing:
Program-centric
(brand, channel)
messaging
Segment-driven
targeting:
Varying message by
targeting ‘like’ groups
of customers

25

26
• Long-tailed contracts
• Strong incumbent relationship
• Price, hidden costs; large vetting and contingency process
• Organizational priorities.
- 13 “planes in the air” competing for capital and attention
• Business model
- Three separate business presidents with own, unique needs
• Strong desire to maintain / protect current activities
26

27
To grow, we needed to become more
and
in reaching our customers.
targeted,
faster
27

28
New Segmentation Model
July 2015

2929
Legacy Marketing
Technology Platforms –
over 40

30
Marketing technology pillars
Recognition
& reach
Brand
experience
Analytics
& insight
Marketing
operations
ID & profile
Know your
customers through
their lifestyles,
attitudes and
behaviors, and
create the most
complete
individual profile
Find and
communicate with
those customers
where they are
engaging today
Engage them with
personalized
experiences
based on what
you know and
what you are
learning real-time
Track the impact
of those
experiences to
optimize your
message or to
adjust for changes
in market
conditions
Assemble a
team that can
align activities
against business
objectives and
execute
flawlessly

31
Proposed Wellspring Solution
Omnichannel
campaign management
Distributed
Marketing
8
Lead / target
management
Data Management /
Business Rules Engine
2
Wellspring Solution Architecture
CNO Sources
and Systems
ChannelsUsers
Direct mail
Email
Web
Display
Social
Mobile
Call center
BI / analytics
1
Fusion
Identity Management
/ CDI / Online
Onboarding
3
Analytic Environment
6
Marketing DB
Environment
5
Platform Partners
For more than three and a half decades, Oracle has been the
leader in database software. And as it has further developed
technologies and acquired best-in-class companies over the
years, that leadership has expanded to the entire technology
stack, from servers and storage, to database and middleware,
through applications and into the cloud.
IBM Netezza high-performance data warehouse appliances
have revolutionized how organizations approach data
warehousing and analytics. Engineered from the ground up for
analysis of large data volumes, these appliances are purpose-
built to make advanced analytics simpler, faster, and more
accessible. They offer a complete solution that integrates
database, advanced analytics, server, and storage together to
deliver the performance, value, and simplicity that organizations
need to handle their rapidly expanding data.
HP creates new possibilities for technology to have a meaningful
impact on people, businesses, governments, and society. The
world’s largest technology company, HP brings together a
portfolio that spans printing, personal computing, software,
services, and IT infrastructure to solve customer problems.
Tibco's Service Oriented Architecture (SOA) solutions help
organizations migrate to an infrastructure composed of services
that can be assembled, orchestrated, and re-used. Enterprise-
scale SOA comes together when you create services from new
business logic and wrap existing legacy assets to expose them
as services.
 Business Integration – Builds a common framework for
integrating incompatible and distributed systems to tie
together applications and web services.
 External Connectivity – Manages the secure execution of
transactions outside of the firewall and over the internet.
 Messaging – Manages the real-time flow of event-driven
information across networks.
[x+1] has helped marketers connect with consumers in more
meaningful, actionable ways, delivering content and offers
where they’re most relevant. [x+1] can help brands, agencies,
and media companies determine the most valuable customer
attributes (those characteristics that indicate who is most likely
to respond favorably) and then interact with those people when
and where they are online. [x+1]’s Predictive Optimization
Engine (POE™) is at the heart of a product set (Media+1,
Site+1, and Landing Page+1), which enable automated, real-
BI / Analytic Tools 7
Application Software Partners
Business Objects, an SAP company, transforms the way the
world works by connecting people, information and businesses.
With open, heterogeneous applications in the areas of
governance, risk and compliance; enterprise performance
management; and business intelligence, Business Objects
enables organizations of all sizes worldwide to close the gap
between business strategy and execution. Together with a
strong and diverse partner network, Business Objects allows
customers to optimize business performance across all major
industries including banking, retail, consumer-packaged goods
and public sector. Business Objects is committed to helping
customers turn raw data into actionable decisions, regardless of
their underlying database, operating system, applications or IT
system.
Cognos, an IBM company, is the world leader in business
intelligence and performance management solutions. It provides
world-class enterprise planning and BI software and services to
help companies plan, understand and manage financial and
operational performance.
Unica, an IBM company, has been a strategic partner of Epsilon
since 2002. Unica’s award-winning marketing suite is a
comprehensive marketing automation platform that assists
marketers with complex campaign management, marketing
resource management, and analysis functions. Epsilon routinely
Conductor
Campaign
Management
Application
9
Digital Media
Targeting / Analytics
Application Software Partners
Business Objects, an SAP company, transforms the way the
world works by connecting people, information and businesses.
With open, heterogeneous applications in the areas of
governance, risk and compliance; enterprise performance
management; and business intelligence, Business Objects
enables organizations of all sizes worldwide to close the gap
between business strategy and execution. Together with a
strong and diverse partner network, Business Objects allows
customers to optimize business performance across all major
industries including banking, retail, consumer-packaged goods
and public sector. Business Objects is committed to helping
customers turn raw data into actionable decisions, regardless of
their underlying database, operating system, applications or IT
system.
Cognos, an IBM company, is the world leader in business
intelligence and performance management solutions. It provides
world-class enterprise planning and BI software and services to
help companies plan, understand and manage financial and
operational performance.
Unica, an IBM company, has been a strategic partner of Epsilon
since 2002. Unica’s award-winning marketing suite is a
comprehensive marketing automation platform that assists
marketers with complex campaign management, marketing
resource management, and analysis functions. Epsilon routinely
integrates Unica Enterprise applications as part of the overall
direct marketing platforms we host and manage on behalf of our
clients. Epsilon has implemented and hosted Unica Campaign
for more clients than any other marketing service provider.
Adobe Neolane Campaign provides conversational marketing
technology that empowers organizations to build and sustain
one-to-one lifetime dialogues, dramatically increasing revenue
and marketing efficiency. Born digital, with best-in-class email
and inbound-outbound channel fusion capabilities architected
into a single code-based platform, marketers achieve results in
record time. Adobe Neolane Campaign is easy to use for both
power and casual users, but powerful enough to drive the most
sophisticated marketing strategies. Future-proof, Adobe
Neolane Campaign has a track record of enabling its customers
to adapt to new customer engagement challenges and exploit
opportunities more quickly than their competition.
SAS is the leader in business analytics software and services,
and the largest independent vendor in the business intelligence
market. Through innovative solutions delivered within an
integrated framework, SAS helps customers at more than
Campaigns
Branch
Manager
Marketers
Data
scientists
Personalized & Anonymous Analytics
10
Dashboard
OSCR/PMA
Workbench
(Salesforce)
Target Data Store
CNO
Epsilon Replaces in Phase 2
Lead / Enhancement
Data
TargetSource
Plus
4
TV Leads Web
Leads
Vertical
Lists
Other 3rd
Party Data
C3OSCR/PMA
Workbench
(Salesforce)
Print/Digital
Transfer
SMARTS
Media DB
CNO
Direct integration
Real time
Batch

32
32

3333
Insurance
+19.0%Increase in quotes
+13.5%Increase in conversion
+13.4%Increase in PLE
+16.5%Increase in LPT
42%Policies/HH

3434
Banking
84.0%Lift in new accounts
19.8%Lift in customer accounts
16.0%Reduction in CPA
145%Lift in average
account balance

3535
Executive dreams for
• Digital
• Big Data
• Social

3636
Build a separate
digital team or
make everyone
digital?

3737
Migrate from channel-centric
to customer-centric
marketing strategy; manage
and optimize Transition the marketing
organization to be more
digitally focused
Govern the marketing organization
(broadly) and the orchestration of cross
channel communications (specifically)
Governance
Organizational
Change
Management
Integrated
Marketing
Strategy

38
Segmented
Push
Focus Product Customer
Marketing Batch and blast marketing Segmentation marketing
Message Single message Single message
Channel Single channel Multiple channels
Analytics Foundational Descriptive
Technology No CRM, disconnected tools Underutilized CRM
Level of
CRM
maturity

39
“Stop Segmenting; Start Individualizing”
Brendan Witcher

40
Stop thinking CX
Start thinking iX

41
41
relevancy >>>
sophistication>>>
“your intent”
“their intent”
Default push
marketing:
Program-centric
(brand, channel)
messaging
Segment-driven
targeting:
Varying message by
of customers
Real-time
contextual:
Varying message by
incorporating real-time
cues in context

42
To leverage big data virtually
anytime, from anywhere in
real-time you need sophisticated
customer data integration
Customer data integration
Receive Validate Identify Retrieve
Referential data Customer data
42

43
Real-Time
Segmented
Push
Focus Product Customer Relationship
Automated, real-time
marketing
Message Single message Single message Targeted messages
Channel Single channel Multiple channels Cross-channel
Analytics Foundational Descriptive Strategic
Technology No CRM, disconnected tools Underutilized CRM Loyalty and/or CRM platform
Level of
CRM
maturity

44
relevancy >>>
sophistication>>>
“your intent”
“their intent”
44
Default push
marketing:
Program-centric
(brand, channel)
messaging
Segment-driven
targeting:
Varying message by
of customers
Real-time
contextual:
Varying message by
incorporating real-time
cues in context
Anticipatory:
Dynamically controlling
messaging by
anticipating needs

45
45

46
Thru the arc of the day
6am 12pm 6pm
46

47
47
360
o
real-time, actionable consumer profile - for every individual
Who they are
• 120M households; 200M consumer profiles
• Demographic composition: age, gender, HHI, occupation,
• Life-stage (new mover, pre-mover, marriage, baby)
• Automotive (year/make/model, mileage, etc.)
• Neighborhood-level and property data
What they buy
• 86 million purchases per day
• More than Amazon & eBay combined
• Over 4,000 retailer CRM integrations
• SKU level; on & offline
Cross-channel marketing activity
• 42B annual email opens
• Catalog, direct mail, loyalty activity, credit card
applications and survey
• Social media: How I share, what I follow, what I like
What they watch
• In-depth consumer understanding of contextual
video consumption
• 60MM new digital videos tracked monthly
Where they go
• 4B verified lat:long data points a day
• 200 unique points of interest
• Accurate within 10 feet
What’s their worth
• Value scores
• Wealth scores
• RFM data
• Economic Activity Index
How they spend
• Channel preferences, seasonality, categories, etc.
• 200+ propensity models (i.e. Uninsured health households,
insurance switchers, Medicaid potential qualified HHs, etc.)
• Self-reported purchase behaviors and brand preferences
• Unique plan-to-buy intentions not found anywhere else
What they browse
• 86B interactions a day (2nd only to Google)
• 400 days of browsing, engagement
and download activity
• 2nd largest display network (comScore)
• 170K SDK-integrated mobile apps

48
48

49
Emotional Need States
Emotional Context

50
Emotion Arising. Research shows that emotion is the component of customer
experience that has the largest impact on loyalty, but it is also the area where companies
are least adept and often seemingly ignore.
Over the past few years, neuroscience and behavioral science research has begun to
fuel new techniques for affecting human emotions.
In 2016, expect to see a major jump in the number of companies that discuss, measure,
and design for emotion.
Customer Experience Trends for 2016
(The Year of Emotion)

51
Conscious Context:
Aligning with individual’s current emotional state

52
Detecting emotions on:

53
Anticipatory
Real-Time
Segmented
Push
Focus Product Customer Relationship Emotional Context
Automated, real-time
marketing
1:1 dialogue, anticipatory
marketing
Message Single message Single message Targeted messages 1:1 / Dynamic messages
Channel Single channel Multiple channels Cross-channel Optimized omnichannel
Analytics Foundational Descriptive Strategic Optimized
Technology No CRM, disconnected tools Underutilized CRM Loyalty and/or CRM platform CRM with Loyalty platform
Level of
CRM
maturity

5454
Measurement
Return on
Investment.
MC/NAP
Driven by response
rates, appointment
rates, and sales
conversion
Customer lifetime
value matters: policy
size, cross-sales,
retention
Materiality. Lead
Volume; Insatiable
appetite for leads

55
Basic
• Simple campaign
reporting
• A/B Testing
• No control groups
• No targeting models
• Measure / optimize
philosophy not
embraced
Better
• More advanced
campaign reporting
(rules-based attribution)
& dashboards
• Multivariate testing
• Campaign / channel
control groups
• Response models
philosophy more widely
embraced
Best
• Advanced campaign reporting
(data-driven attribution)
• Fractional factorial test
designs
• Universal control groups
• Uplift (incremental response)
models
• Media mix models & scenario
planning
philosophy instilled across
marketing ops
Measurement & optimization

56
of businesses
consider improving the
72%
customer experience
a top priority.
56

57
Top 5 Take-Aways
1. Be Curious and Open to Change
2. Don’t Let Past Success Be a Barrier to Future Growth
3. Center on your Customer
4. Invest Time in Organizational Alignment
5. Remember the Human Element

Chris Campbell
CNO Financial
Carl Madaffari
Epsilon
Dave Edington
Epsilon 59
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Insurance Firms Discuss Data Analytics Maturity and Customer Experience

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