Travelers' One-to-One Boosts Retention
Travelers Personal Lines, Hartford, CT, is the second-largest writer of auto and homeowners insurance through independent agents.
One-to-One was developed to help agents maintain regular contact with their Travelers customers through strategically scheduled, targeted mailings customized with the agency's logo and the agent's contact information.
"The personal mailings are co-branded with Travelers and the agency information so the customer perceives that they are receiving the mailings from Travelers and their independent agents," said Tina Beckwith, director, strategic marketing at Travelers Personal Lines. "The mailings also address the customer by name."
Travelers regularly compares retention rates for customers who get One-to-One communications with those who do not, and "across those groups, the customers are the same, they have the same premium level, products and geography split," she said. "The only difference between the two groups is whether or not they are receiving the mail pieces. We found that customers who receive the mail have a 5-point higher retention rate on average than customers who do not receive the mailings."
The program is executed by Travelers' vendor Moore Wallace, which was purchased by R.R. Donnelley.
Travelers collects customer data when an agent writes a customer's policy with the company, and then segments it based on the customer's relationship with the company, tenure and profitability. The data are housed at the vendor, which also sends the mail pieces.
"The program is designed to communicate with customers at critical points of the lifecycle," Beckwith said. "We identify customers based on their tenure with us and their risk of attrition, and we bucket them into different mail plans."
The program uses various mail packages, such as letters and postcards. New customers get a welcome package with preferred-customer cards, "which make it easy for the customer to get in touch with their agent or Travelers, if they need to," she said.
The new customer mailings also include product safety tips based on the type of insurance product purchased, such as home, auto, boat, flood and identity fraud expense coverage.
Agents looking to cross-sell products have different mailings to choose from.
"The program gives them flexibility to identify their mono-line home customers and send them a mailing that promotes the auto product," Beckwith said.
Many mailings include a questionnaire seeking feedback from customers about their policy satisfaction. Travelers asks customers whether they wish to opt in to receive communications via e-mail.
"When a customer does that, we respond to them via e-mail, then thank them for filling out the survey, and make offers to them based on the input they have provided to us," Beckwith said.
For about $3 annually per customer, Travelers agents can enroll in the One-to-One program through the Personal Lines section of the Agent HQ Web site or by calling a toll-free number. Travelers has 10,000 agents, and "90 percent of our largest and most profitable agencies use the program," Beckwith said.
Ron Patterson of the Ron Patterson Insurance Agency, Richardson, TX, has used One-to-One for three years.
"One-to-One has been a great marketing program for my agency for account development by informing customers of new products and services offered by Travelers," the agent said. "The more policies you write for a customer, the greater the retention rate, and One-to-One has been an outstanding tool that makes dollars and sense for our agency."
Patterson uses the program several ways. Along with sending thank-you letters to long-term customers, Patterson last year promoted an identity fraud expense coverage product to Travelers customers 60 days before their policies were being renewed. He also used the program to promote a valuable items insurance product to customers who have jewelry or collectibles.
"The program allows us to differentiate ourselves," he said. "Instead of just receiving a bill from us, we can communicate with our customers in an effective way."
The program lets him communicate with his customers regularly, though he doesn't have a full-time designated employee on his 11-person staff to handle direct mail. He has a part-time worker who heads the company's DM initiatives.
Travelers launched One-to-One in 1995 and refined it in 2002 based on its research on building customer loyalty.
"We conducted quantitative and qualitative research to understand why customers leave and when they leave, and then leveraged our understanding of customer behavior to develop a program that would help agents reach out to their most at-risk and valuable customers," Sharon Steers, vice president, strategic marketing at Travelers Personal Lines, said of the 2002 refinement. "By building a tighter bond between agents and customers through regular communication and customer service, agencies can dramatically increase their overall retention."