A product-focused approach helped Great-West Life & Annuity Insurance increase member coverage by an average of 7% for its program targeting American Dental Association members.
Great-West introduced enhancements to its ADA offerings to increase interest in the program, including higher volume discounts for members who had $500,000, $1 million or $2 million worth of coverage; higher maximum coverage for the member doctor or his/her spouse; expanded age eligibility; and preferred rates for exceptionally healthy applicants.
The challenges was that the product was mature, as well as being an intangible commodity product in heavily saturated product. ” It’s also hard to make exciting. Insurance isn’t exactly a sexy thing to market,” noted Diane Dvorak, account supervisor with Wilde Direct, Great-West’s agency.
Dvorak and Leslie Franklin, director of marketing for Great-West spoke at the New England Direct Marketing Association annual conference at Bentley College in Waltham, MA.
Great-West specializes in group insurance, retirement plans and annuities. The American Dental Association has been a Great-West client since 1934, and is the company’s oldest and largest account.
Franklin noted that about 80% of the dentists in the U.S. are ADA members. The ADA has about 150,000 member dentists, 70,000 of whom participate in the Great-West insurance program. The members are typically between the ages of 22 and 65, skewing on the older side. The membership is primarily male, although that is changing as more women enter the dental profession.
Typically, Great-West’s marketing approach relies on customer-centric segmentation, looking at variables like age, product history, membership type and family status. All customers are billed twice a year in June and December, so communications are often timed to coincide with those periods.
To promote the new enhancements, Great-West took a different tactic, focusing instead on segmentation based on product attributes. Five segments were identified: “cusps” (people on the cusp of hitting a volume product discount); “old max” and “spouse old max” (members who had the old maximum amount of coverage allowed for themselves or their husband or wife); “new opportunity” (people who might benefit from the extended age eligibility); and “others” (who might quality for the preferred rates).
Outer envelopes with teaser copy, personalized letters with rates quotes, slim jim brochures and applications were created for each segment, and the mailing was timed to hit just before the December billing period. The overall campaign resulted in a 2% response rate, considerably above the typical 0.4-0.5% response, said Franklin.
As a result of the 70,000 piece mailing, applicants on average doubled their coverage, and call center volume doubled. The average spouse coverage grew 10% from $161,000 to $198,000, 132 customers purchased extra coverage and 116 additional customers qualified for new or higher volume discounts.
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