Issue

One of the nation's largest insurance companies needed to develop an approach to direct sales and self-service via new channels. It wanted to build on previous findings that identified a number of customer segments that could be collapsed into three distinct macro-segments, ranging from those who work with a local agent exclusively to those who prefer self service and rarely work with an agent. The challenge was to identify features and levels of a product offering that would maximize the appeal of direct distribution channels (phone and web) to two of the customer segments without alienating the provider's traditional base of customers who prefer to deal with a local agent for their insurance needs.

Process

We assessed the client's goals and determined that our custom product development methodology, which uses discrete choice-based conjoint analysis, would be most effective. To collect data, we conducted an online survey with 3,000 customers. An integral part of the survey was a set of choice tasks that asked respondents to make trade-offs regarding features of a direct channel offering. In addition to the usual factors that influence the choice of an insurance company — price and brand — the discrete choice design included features that pertain specifically to shopping, buying and ongoing customer service via self-service channels.

Result

Market Strategies used the survey results to optimize a preferred product configuration and developed a simulator that enabled the client to conduct what-if scenarios that examine demand among modeled segments. We also conducted a latent class analysis that revealed underlying patterns of customer choice and allocated customers into large groups whose product and service needs appeared similar. The client is actively developing a direct channel offering.

< Back to Library