When Liverpool Victoria decided to implement a Customer Relationship Management (CRM) strategy, it wanted to use behavioral modeling to provide in-depth understanding of its data. Using technology from Quadstone, the company can craft the right offer at the right time for the right person and analyze the effect of its marketing strategies.

Background

Originally formed in 1843, Liverpool Victoria took over Frizzell Financial Services in 1996 and acquired Landmark Insurance in 1997. The company is headquartered in Bournemouth, England with branches throughout the UK. It has more than two million customers. Liverpool Victoria offers protection and investment services as well as credit and savings products. It is one of the largest direct insurance companies. With its Frizzell brand, it is also one of the leading independent advice companies in the UK. As such, the company relies heavily on providing a high level of customer service to maintain excellent relationships with its client base.

Before the takeover of Frizzell, Liverpool Victoria had already formulated a CRM strategy. The acquisition of Frizzell highlighted the need to manage efficiently the relations with the two former companies' existing customer bases. Their goal was to maintain a high level of customer service for its customers and members and also target them with appropriate products and services. In addition, they had a specific requirement to increase its mid-market segment, identified as middle class and middle age, because they were determined to be the largest and most profitable consumer audience.

Following its takeover of Frizzell Financial Services, Liverpool Victoria held large amounts of disparate customer data. Liverpool Victoria was using an Oracle database running on HP K420 servers to consolidate the information within its marketing department. By storing all data centrally, the marketing department was able to gain immediate access to customer information and use the data to direct its activities. In addition to the customer relationship database, Liverpool Victoria wanted scaleable software to enable it to perform advanced customer behavior modeling for their 2 million customers.

Liverpool Victoria Chooses Quadstone

Ultimately Liverpool Victoria selected Quadstone's Decisionhouse to run with their existing campaign management and reporting tools. Quadstone has specialized in designing scaleable business information solutions to handle many millions of customer records since 1995. Their solutions enable clients to analyze information in detail and translate it into useful marketing data and customer models for marketing activities. While there are a number of tools available for data mining and modeling in the marketplace, these appear to be aimed mainly at statisticians rather than business users. In comparison, Quadstone's Decisionhouse is easily integrated into marketing departments and built for use by marketing personnel. The product keeps the analytical process simple and quick by providing detail with their visualization capabilities to make the data easier to understand for those that are not statisticians.

Alan Gravett, database & market analysis manager, Liverpool Victoria, said: "We selected Quadstone's Decisionhouse as one of our suite of products from over 100 tools. Because it can be used in the marketing department, we do not need to rely on technical and statistical analysis from other departments. We can create our own models and identify appropriate segments of our customer base using knowledge in the department to complement the software. As such, it is the best match to our requirements."

Decisionhouse Is a Smart CRM Solution for Marketers

Decisionhouse enables business users such as Liverpool Victoria's marketing department to identify key characteristics that are exhibited by, for example, customers who defect or customers who buy a particular product. Using the tools, marketers can build accurate profiles of customers likely to be receptive to particular products or services. Marketing campaigns can then be logically structured and are more likely to provide a higher return on investment (ROI). In addition, the results can be analyzed to generate information for use in future campaigns.

Gravett added: "Decisionhouse provides a high level of scaleability which is essential to enable us to fulfill our marketing strategy. We can create propensity models based on huge amounts of customer information so we don't need to rely on sample data. But we can also drill down to look at client views, household and policy information, and cross reference to target individual profiles of customers with relevant products or services."

Because Decisionhouse provides data driven customer modeling, it ensures that targeted campaigns are based on proven customer behavior profiles. Liverpool Victoria wanted to analyze all its customer data and know that no vital customer account information had been omitted. Using Decisionhouse, customers are scored according to their propensity to respond to products or services. This means that Liverpool Victoria could create effective marketing operations based on accurate customer profiles.

Quadstone worked alongside Liverpool Victoria's marketing staff to ensure the smooth transfer of knowledge. Gravett says: "Quadstone provided a high level of expertise in the analysis and manipulation of our data and this knowledge was quickly transferred to our marketing staff. We can achieve successful analysis and manipulation of all our customer records more easily than we ever could in the past."

Chris Nelson, business development manager, Quadstone added: "Because customer behavior modeling is a relatively immature market, as with all our customers, we needed to provide specialist training and support to ensure that Liverpool Victoria could take full advantage of the toolsets contained within Decisionhouse."

A Comprehensive Toolset

Rather than relying on disparate toolsets, Decisionhouse incorporates all the necessary tools such as query and reporting, data mining, OLAP and visualization to ensure that all modeling can be done easily from a single desktop location. Because the solution is so user-friendly, it has been quickly integrated into the marketing department. Five of Liverpool Victoria's marketing staff already use the software to perform customer analysis and build propensity models. As a result, the society is already streamlining its marketing campaigns.

Chris Nelson, business development manager, Quadstone, said: "By using CRM and modeling techniques, Liverpool Victoria is managing its marketing campaigns more effectively. It has already achieved a 35% increase in response rate to a direct mail campaign. As a result of this increase in efficiency, the society is dramatically improving its relationship with its clients."

Gravett underlines the benefits of CRM for the Liverpool Victoria marketing department. He said: "We are already realizing the advantages of better control over our data. We are creating more effective strategies, and we can target customer groups with appropriate services and products. Total cost of ownership (TCO) is reduced and we can streamline resources to provide a more efficient all round service. By understanding our customers, we can meet their needs."

The company has also benefited from the rapid deployment of techniques enabling them to quickly follow up organizational developments with marketing strategies based on more accurate information. Chris Nelson added: "Rapid time to market is key for financial organizations. They are operating in a competitive environment and so rapid information dissemination is vital to enable them to follow up findings with creative marketing strategies."

An Eye to the Future

Liverpool Victoria is already planning how to expand its CRM solution. It is considering implementing additional software from Quadstone, such as Transactionhouse, which addresses the deployment of models across the organizations and assesses customer behavior based on information about actual transactions. This is particularly valuable because transaction information reflects customer behavior more accurately than any other statistic.

Copyright © Quadstone Limited, 1999. Quadstone Limited owns the copyright for this document and its contents. Quadstone hereby permits copying of this document for distribution provided that the document is distributed in full, including this copyright notice. All other copying and distribution requires Quadstone's express written consent.