The insurance company’s existing pricing and understanding of their customers was based on an annual policy-level view. It took into account the specific policy such as car or home, and the coverage period, but not the breadth of products a customer held or the potential future value of the customer. The company recognized that a better understanding could allow them to be more customer-centric in all facets of the business.
To be successful, CLV needs to include a complete view of the customer’s relationship to the brand and to be incorporated into all touchpoints a company has with the customer. Reorienting around CLV requires significant organizational change and commitment from leaders across departments and functional areas, including marketing, sales, operations, billing, and product development. CLV is also a long-term initiative and implementing it with the client required a multi-phased approach that allowed for immediate results while laying the foundation for larger changes in the future.
Recognizing the amount of organizational change that was required, Trendline developed a Customer Lifetime Value Roadmap that clearly defined the project over the next several years. The roadmap was built on a phased approach that guided the client through the process of evolving to a customer-centric organization.
Milestones and deliverables, such as CLV algorithm and key pilot initiatives, were included throughout the project to help the organization implement a customer-centric mindset and utilize the new CLV metrics effectively. The use cases for CLV were varied and the roadmap incorporated the strategy for a variety of different business areas such as claims, underwriting, marketing, etc.
The phased approach defined by Trendline will achieve three primary objectives. First, it instills a new customer-centric orientation throughout the organization by applying a holistic view of the customer across products and lines of business. Second, it creates multiple metrics that can be accessed at all touchpoints to effectively allocate resources. Finally, it ensures pragmatism throughout the entire CLV development process, based on a “test and learn” framework that is paced to allow the organization to succeed.