Cross-selling in insurance

Value-based management of sales activities

The key focus of every insurer is: "tie our customers to the brand – expand the interlinking of products". Boosting cross-selling is however often hampered by the fact that the sales organisation is usually made up of legally independent representatives, similarly to the automobile and software sectors.

So how does a marketer act in a complex market environment in which direct access to the sales organisation is not feasible? In view of rising competitive pressure, constant increases in incentives and sales commissions cannot be the answer. Equally, high investments in CRM systems typically don't lead to more cross-selling. There is still a lack of intelligent concepts for the profitable application of the technical systems.

The Customer Value Factory, developed by Dastani Consulting, supports insurers by significantly improving the interlinking of products through efficient cross-selling. The tried and tested concept is made up of three interconnected components: The Customer Value Predictor determines the expected turnover per customer and per product group. Revenue expectations are derived from the analysis and classification of historic purchasing behaviour. Customer-specific affinities for individual products and product groups are determined together with an indication of the most suitable cross-selling products.

These indicators are then used to generate centrally managed leads out of the customer base through telemarketing. Our studies repeatedly show that central delivery of "cold" addresses without specific cross-selling indications is not a motivator for the salespeople.

"Cold" addresses tend to be ignored or only superficially dealt with due to the low success rate – worse still, this causes long-term damage to the reputation of centralised campaigns. This can be counteracted with the Customer Value Demand Generator, which optimises centralised lead generation in terms of a permanent improvement of the cost per lead and its inherent quality. Scoring systems automatically select the best addresses – they learn in real time how to interpret the influence of customer value indicators and historic transactions on the contact performance. The Customer Value Demand Generator ensures that successively only such customers are contacted, for whom the product has a genuine relevance. This in turn assures the attention of the customer.

But why is it, that even highly pre-qualified leads do not often enough lead to a sale? In the course of more than 20 lead generation projects, we stumbled again and again on two key causes: unsatisfactory lead quality and lack of sales commitment. To counteract this, our Customer Value Sales Manager accompanies the "lifecycle" of every lead. It determines the quality of the prospective buyers, broken down into individual telemarketing agents, and at the same time is able to to measure the commitment of the salesperson or insurance agency. Benchmarks, key performance indicators and the allocation of marketing budgets to successful agencies facilitate a permanent improvement in performance.

Cross-selling requires a holistic approach – from the viewpoint of customer value potential to the generation of prospects and the actual sale. Successful insurance companies will in future set store on all three optimisation factors of intelligent selling in order to significantly boost their sales efficiency.