The Customer Loyalty Solution : What Works (and What Doesnt) in Customer Loyalty Programs

BenefitMall.com is an online exchange for buyers, sellers, and providers of employee benefits for companies with 100 employees or less. Through BenefitMall, insurance brokers can access active accounts and receive accurate real-time quotes, reducing the total sales cycle from more than a month to less than an hour in most cases. As well as the Internet, BenefitMall also supports brokers with traditional in-market call center and sales support. The Mall’s quote engine lets brokers quote multiple carriers and multiple products in a single proposal.

There is a large community of brokers in the United States that focuses on providing insurance and benefits contracts to small businesses. Also, there are many companies that offer small-company benefit packages, with many different product offerings. The challenge for a broker is to be able to access information on a variety of options in a timely fashion. Since brokers usually have small budgets and cannot afford sophisticated systems, they find companies like BenefitMall to be quite helpful. Going directly to a carrier can require a lot of paperwork and take weeks to process. By the time it’s all completed, the client may have chosen to purchase from some other broker.

BenefitMall’s director of marketing, Patty Harris, asked SmartDM Chief Analytics Officer Bill Franks to help the company make a major expansion of both its online and its offline capabilities and staff. With more than 50,000 brokers in the company’s database, they decided to launch a program to increase the share of business obtained from brokers.

The goals of the initiative were to

• Set up a new Web-based database marketing system across several channels, including direct mail, email, fax, and Web surveys.

• Provide regular updates to broker segment classifications and respond rapidly to changes in the broker profile.

• Begin marketing to brokers through programs based on the type and frequency of business that they have done with BenefitMall.

• Allow easy collection of broker information, including communication preferences, demographics, and customer satisfaction feedback.

• Have responses tracked and results quantified so that the effectiveness of marketing efforts can be rapidly determined and the efforts adjusted as needed.

• Personalize broker communications with the data collected and the name of the broker assigned to each broker.

To set up the new system, there were several obstacles to be overcome:

• The BenefitMall database was not “marketing-friendly.” Getting data out of it was difficult.

• BenefitMall had not done sophisticated database marketing in the past. It was difficult to sell the concept to management.

• There was no historical information that could be used to benchmark the response to new programs.

• Management, once it was sold on the program, demanded an aggressive implementation process, with not enough time for testing.

Program Communications

To set up the new system, Franks and the SmartDM team set up a number of new communications aimed at building relationships with brokers:

• Welcome kit mailings to new brokers when they first register on the system.

• Activation emails encouraging brokers to make their first quotes and sales.

• New customer thank-you mailings to thank brokers for their first BenefitMall sale.

• Thank-you satisfaction surveys emailed to each broker after each sale. The email links the broker to a Web microsite that asked questions about the experience. The emails came from the regional vice president of sales for the broker’s region.

• Reactivation emails, letters, and phone calls of two types: one for those who stopped selling, and one for those who stopped quoting.

• Broker newsletter emails: nine regional monthly versions.

• Special regional postcard/email/fax promotions. These were special communications aimed at getting information such as new carrier announcements, rate changes, and so on to brokers in a short period of time.

Database Changes

For its marketing database, BenefitMall used SmartDM’s DirectTR@K system, which got updates every 2 weeks from the BenefitMall system. This database stored all the information about each broker: past transactions, past marketing communications received, when the broker became a customer, and so on. The DirectTR@K system sent the emails automatically. It tracked who opened the emails, who clicked on the various links, and what emails bounced. While the DirectTR@K system sent the email communications directly, lists for the direct-mail and fax communications were extracted and sent to SmartDM’s production division for execution.

The communications were personalized and customized to include transaction data, sign-up date, and the sales rep and sales manager and their contact information. In this way, the communications appeared to have been sent to the broker by the rep whom the broker knew.

New Systems

This program was entirely new for BenefitMall. It required setting up

• A Web-based, multichannel, marketing system that tracked customer activity and response.

• Data of much higher integrity than had previously been maintained. It was necessary to pull lists on the same day as the request, which was very new to BenefitMall.

• User interfaces for generating queries, examining data on individual brokers, managing campaigns, and viewing marketing reports.

• Broker profiles, including type of practice, product sales, and transaction types. This information had not been available before.

• Customer satisfaction data from the Web surveys, which enabled BenefitMall to identify strong and weak personnel within the company.

• One-on-one direct marketing communications across several channels (email, direct mail, fax, phone, and Web microsite).

With the new program, the company added a BenefitMall custom proposal, a Microsoft Excel–based software tool designed to make it easier for brokers to customize insurance coverage proposals for clients. The goal of this free software was to help brokers customize proposals so that they could sell more insurance. The Web system (see Figure 9-2) permitted brokers to

• View side-by-side rate and benefits comparisons for multiple policies.

• Add coverage options to help clients compare rates and benefits.

• View preloaded, preset spreadsheets and reports.

• Create final presentations right on their laptops, then view the proposal on the screen or print it out and discuss it.

  Figure 9-2: BenefitMall Web Site

After a 120-day development process, BenefitMall was able to start its first month of the new system by sending

• Welcome kits to 2500 new brokers, personalized for the individual broker and the broker sales representative for each of the 11 regions.

• Activation emails to all new quoting brokers and all new selling brokers. BenefitMall was able to convert 5 to 10 percent of these brokers to full customers within the first 2 months. This was true even though typical sales cycles are 3 to 6 months. It is anticipated that this percentage will at least double over time.

• New customer thank-you letters and gifts to all first-time selling customers in all regions.

• Thank-you satisfaction surveys to all brokers completing sales each month; 25 percent of the brokers reached in the emails participated in the surveys.

• Reactivation emails, letters, and sales phone calls to all lapsed brokers, those who had stopped quoting and selling. BenefitMall was able to reactivate more than 5 percent of these brokers within the first 60 days. This percentage is expected to at least double, since typical sales cycles are 3 to 6 months.

• Email newsletters to all brokers with 45 to 55 percent open rates for HTML. (Open rates refers to the percentage of people who open and read an email instead of just deleting it.) There was a 5 percent click-through rate on links to the Web site and an opt-out rate of 0.3 percent over an 8-month period.

• Eighty special regional postcards, faxes, and emails, all within 48 hours of the event, improving the turnaround time by 62 percent. These communications gave brokers updates on price changes, seminars, new carriers, or other time-sensitive news items.

In the first 8 weeks of the new program, BenefitMall generated over 2000 new quotes and 80 new sales.