SPSS - Customers

Corona Direct

Situation

Founded in 1931, Corona Direct is Belgium's second largest direct insurance company, employing 150 people and generating revenues of $25.8 million in 2002. A subsidiary of the Belgian-French banking and insurance company DEXIA, Corona Direct provides customers with products such as car, fire, and property insurance.

Corona Direct markets to prospects and customers through four channels:

Direct marketing
Its call center
Its Web site
Affinity insurance writing, through which it underwrites insurance programs for third-party vendors

Challenge

Corona Direct has been growing rapidly. Direct marketing campaigns play a key role in this growth, enabling Corona Direct to acquire new customers by offering attractively priced insurance products. To sustain its current level of growth, Corona Direct's customer acquisition campaigns need to be profitable—that is, first-year revenues generated from new insurance policies should pay for the cost of the acquisition campaign.

However, in the past, the cost of securing new customers exceeded first-year revenues by almost 50 percent, putting Corona Direct's growth strategy at risk.

Solution

To turn its unprofitable acquisition strategy into a profitable one, Corona Direct implemented PredictiveMarketing. This application enables Corona Direct's marketers to efficiently create, optimize, and execute their outbound marketing campaigns. PredictiveMarketing automatically identifies groups for Corona Direct that are likely to respond to a campaign, and then performs a sophisticated profit-cost analysis, balancing growth targets against profit margins. With this dual focus on likelihood of response and expected profitability, Corona Direct is able to optimize its potential for growth.

Corona Direct — In The News

Direct Marketing on Target
by Wendy Toth, Insurance & Technology, April 20, 2005

Interested in Corona Direct? Download the PDF

Two years ago we were mailing four million letters annually at an average cost of $.50 per letter. We decided on a strategy that would help us mail less while maintaining our prospect conversion rate, so we looked for software that would allow us to achieve this goal. After modeling with PredictiveMarketing and then fine-tuning our prospect mailings, we were able to reduce our costs by 30 percent while maintaining new customer conversion rates.
Philippe Neyt
Commercial Director
Corona Direct

Results

As a result of using PredictiveMarketing, the company's acquisition campaigns are now profitable. First-year revenues cover campaign costs, enabling Corona Direct to sustain its growth strategy. In addition:

Campaign costs have been reduced by 30 percent
Long-term customer profitability has increased by 20 percent
Product sales have risen significantly
Payback for the cost of the implementation was achieved within six months

"Using SPSS' software to gain a better understanding of our customers and market opportunities has enabled us to outperform the competition in both growth and profitability," explains Philippe Neyt, commercial director, Corona Direct. "Predicting the needs and profitability of individual customers and prospects is key to this growth. However, creating a profitable acquisition strategy is only the first step. We expect PredictiveMarketing to increase our success rate by 50 percent or more for targeted cross-selling and retention strategies."

Next, Corona Direct plans to use SPSS' PredictiveCallCenter application to increase cross-selling within its call centers and to create profitable retention campaigns that focus on high-value customers.

Corona Direct also plans to use SPSS' PredictiveClaims application. By analyzing historical data, modeling it, and applying predictive analytics, this application will enable Corona Direct to detect fraudulent claims, reduce the costs currently associated with false claim requests, and increase profits.