Nationwide Leverages Data Warehouse for E-Analysis

Nationwide Insurance (Columbus, OH) began its Customer Choice strategy in 2000, but without the customer behavior data collected by the company's Electronic Business Intelligence (eBI) unit and data warehouse, the strategy would not be as successful as it is today, according to two Nationwide executives who spoke at last week's Teradata (Dayton, OH) Accelerating the Future partners conference in Las Vegas.

When the carrier started on its strategy, "Nationwide counted on the Internet to reduce costs and to respond to competition," said Susan McManus, director, marketing and usability, Nationwide. "We needed to make sure we were providing the right functionality and spending money in the right areas."

The eBI strategy was to first develop a foundation for the "collection and dissemination of data" and then to "analyze and explore data to discover the most effective portions" of the Nationwide Web Site, MyNationwide. The third stage of the eBI strategy was to "integrate the data with all other sources and turn it "into actionable recommendations that will drive the business strategy," said Joyce Edwards, division manager, eBusiness Intelligence Systems. "We are leveraging the data warehouse," which was first implemented in 1997, "to do a combined analysis of who uses the Web, how they use the Web and who are our better customers," said Edwards. Nationwide is using a data warehouse from Teradata.

"To really understand the customer, you need a large volume of transaction data," continued Edwards. "In order to store all of the data, we need a data warehouse." In 2001, Nationwide's data warehouse recorded 358,988 transactions from the MyNationwide Web site.

"We are really trying to understand why customers do what they do," said McManus. "For instance, we want to know why many customers call the call center immediately after completing a transaction on MyNationwide."

One fact eBI uncovered is that most MyNationwide users use the "View Bill" functionality on the site. Nationwide thought that most users would enter the site for quotes, but after analyzing the data the carrier made the "View Bill" functionality more prominent, according to Edwards.

Lastly, some of the challenges that eBI says MyNationwide faces include privacy, a topic about which more users are becoming more concerned; large volumes of data (Web logs generate millions of records per day); and capturing cross-channel metrics.

Greg MacSweeney is editorial director of InformationWeek Financial Services, whose brands include Wall Street & Technology, Bank Systems & Technology, Advanced Trading, and Insurance & Technology. View Full Bio