Customer segmentation drives growth in lifetime value
Updated segmentation model leverages all customer data to engage micro-segments with personalized approaches, boosting sales and retention.
Client background
The company is a Fortune 500 insurance company and one of the largest providers of insurance-related products for individual homeowners.
The business challenge
The organization was losing market share to competitors and needed new ways to engage customers and regain its leadership position. Their customer segmentation model had not been updated in over five years and relied only on demographic data, ignoring available behavioral and persona data. This limited their ability to provide differentiated experiences to customer micro-segments and deliver consistent engagement across channels and geographies.
Strategy and solution
The company collaborated with Baker Tilly to develop an updated, analytics-driven customer segmentation model incorporating demographic, product and behavioral data.
Key elements of the approach included:
- Developing a new segmentation model that identified ten unique customer segments and personas
- Conducting a data assessment to determine data quality, gaps and opportunities to enhance segmentation
- Designing a data collection plan to capture missing customer insights at critical interaction points
- Applying statistical techniques to analyze hundreds of customer attributes, identify key behavioral drivers and refine segment groupings
Impact and value:
- Provided a solid foundation for data-driven marketing and engagement strategies
- Enabled consistent, repeatable customer treatment strategies across geographies and channels
- Positioned the organization to regain market share and achieve an expected $3 million annual sales revenue increase
- Established a model to monitor customer behaviors over time, improve retention, reduce churn and drive growth in lifetime value