The Direct Marketing Two-Step—A Winning Business Model.

Case study examining the lead generation-conversion business model for life insurance.

A highly adaptable technique that applies to many products that is more complex than normal invitation-to-

contract insurance offers

•Who am I?

•Why am I talking about a two step?

•What’s the two step?

•Zurich Direct – A ‘two step’ case study key success factors

Who am I?

Ric Surowiec

Present: Director of Marketing – Mutual of OmahaPast:

VP Marketing & Sales - Chase Insurance Direct (Protective Life)VP Marketing – Chase Insurance Direct a JP Morgan CompanyVP Marketing – One Life Direct a BankOne companySVP, CMO – Zurich Direct(All the same company – began as Zurich Direct)

• 20 years experience in insurance• 15+ years in direct to consumer insurance• Experience in a broad array of direct response media,

radio, print, direct mail and Internet.

Why am I talking about a two step?

Important DR tactic that insulates from much of what challenges us today.

1. Increasing paper costs

2. Increasing postage costs

3. Increasing regulation

4. Decreasing RR

Most importantly…

Don asked me to do so!!

What’s the two step?

Different things to different people

…for today:

Any direct marketing that includes a proactive call to action and doesn’t include the ability to consummate the transaction in ad that called for the action.

(i.e. Lead Generation)

Rules we’ve generally followed

#1 Mention the product / SELL THE INQUIRY

#2 Emphasize ease of doing business

#3 Set expectations & follow-up

#4 Measure, measure, measureDo more of what workingDo less of what’s not working

#5 Start at the beginning – make the phone ring

Zurich Directa look at real life insurance example

•High level stats• 200% annual growth rate over first five years

• At maturity annual new business ran $25-$30 million per year.

• Over the ~15 years over $400 million in-force premium and ?? billion of coverage

• Generated 500,000 inquiries per year

Zurich Directa look at a life insurance example

•How did it work?• Lead generation marketing

• Radio• Print• Television• Direct Mail• Internet

• Telephone “sales” center • Employees of the company• Licensed in all states• Trained as clean case UW up to $250,000• Sales mentality – very important component

Zurich Directa look at a life insurance example

•Sample ads

Zurich Direct: King

Zurich Direct: Roy

Zurich Directa look at a life insurance example

Key success factors

Focused on the customer• Most of the break - thru creative was driven from research

• Talk to your customers developing – DM, TV, etc.

• Marketing & Sales Process were built around the customer experience

Permitted puritanical approach to testing• Scoring equations

• Development of new creative

Zurich Directa look at a life insurance example

Key success factors (continued)

Highly refined tactics to measure results • Combined a number of traditional tactics – Finder Number & DNIS ANI

• Technology carried the burden

• Redundancy / cross checks

Technology / CRM enabled mass personalization in Sales Center• Personalized contact letters from Sales Representative

• Follow-up strategy enabled on behalf of Sales Representative

• TO-Do’s to remind them of call back dates

• Later years = Strong telephony integration

Zurich Directa look at a life insurance example

Key success factors (continued)

Highly driven sales culture• Sales leadership celebrating successes every day

• Metrics on Sales performance published – culture that encouraged constructive competition

Top management at Zurich committed to new channels

• Invested in learning – the business lost money at the start

Zurich Directa look at a life insurance example

Challenges:

Maintain level lead flow

Capacity utilization

“You’ve got to do the math”

(both sides marketing & sales)

Channel conflict

Early days only

Q&A