CUNA Mutual Pursues Growth With Data-Driven Marketing

Many insurers are struggling to compete on price and product and to improve their bottom lines with every sale. CUNA Mutual isn't playing that game, CIO Rick Roy says. The insurance and financial services company, with about $16 billion in assets, is developing a data-driven marketing strategy to tailor the right product to the right customer in a way that's more likely to result in a sale.

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The Madison, Wis., company had to rethink the role of data in its business in order to come up with this strategy, which it started working on early last year and is still in the early stages of rolling out. That assessment gave CUNA Mutual the insight it needed to transform its direct-to-consumer business and make data-driven marketing a significant component of that business, Roy says.

"We're evaluating what the consumer experience is today and what we want it to be in the future," Roy says. "We're asking how we can work backward from that goal and how our use of data will change to enable the multichannel future we have in mind." So far, the effort has been focused on really understanding the company's data and how to use it, educating management and getting buy-in from the board, he adds.

CUNA Mutual's data has traditionally been organized around products and lines of business, as opposed to being uniformly available across the business, Roy concedes. With the new approach, the company wants to "tip the silos on their sides to look at the consumer more holistically," he says. "We're starting to map how we arrive at a clear identification of the customer that can be shared across the various delivery and communication channels so that marketing, service and claims are coordinated -- and feel like a coordinated effort to the consumer."

Right Product, Right Customer

The company has enjoyed some early successes, mostly in what Roy calls marketing accuracy, or the precision with which products are aimed at a prospect. "We're getting smarter about filtering out the things we might market to an individual or household that are a little off the mark," Roy explains. "It reduces the junk mail effect on the direct mail side and ultimately gives you a higher response rate."

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For example, Roy says, a more precise reading of the data on a customer may reveal that he would more likely be interested in term life instead of the accidental death and dismemberment policy the company has been pitching him.

CUNA Mutual's data-driven marketing effort is supported by IBM's Unica marketing engine, which powers the company's large direct mail marketing operation, Roy says. The insurer also uses SAP's BusinessObjects as its primary analytics engine. And it's revamping its call center customer service operation using a mix of Cisco telephony capabilities and Salesforce.com's Service Cloud offering.

When a consumer replies to CUNA's outreach, the response can be tied back to a specific Internet, call center or direct mail campaign, Roy says. "We use that part of the feedback loop to measure campaign effectiveness," he says. Once CUNA has the customer engaged, it asks a small set of questions to further identify the customer's product needs.

Frequently a customer's needs may not match the product offered in a campaign, so the questions help sales reps match the customer to suitable products. "The agent needs to smoke that out. Making sure the products line up is a very important part of that loop as we're dealing with customers," Roy says.

It's also critical to use the power of data wisely, he says. What a company can do with data may be different from what it should do. For example, CUNA Mutual has a smartphone app to help car-buying customers secure loans. "Because of GIS capabilities on smartphones, the app knows that a customer is at a dealership," Roy explains. "The question is whether we push a message when we know they're on the lot. It's legal, it's kosher from a compliance standpoint, it doesn't cross any ethical lines -- but is there a creep factor?"

Strategic Conception Of Data

In a recent presentation to the company's board, Roy showed how CUNA Mutual's enterprise data strategy is tied to its growth aspirations. Just having the CIO address the board on this topic, as well as the board's receptiveness to it, indicates a profound change in how the company thinks about data, Roy says.

"Data has rapidly become a very strategic asset for the company, a foundation for treating the customer differently," he says. "Today we have a clearer understanding of the importance of how we need to step out of the traditional way we market, serve and underwrite, and transform the business to a more customer-centric approach."

Board members' openness to Roy's approach was conditioned by what he calls the "Amazon effect." "The directors are consumers themselves, anchored in the experience they have dealing with other companies," he says. "They're tech-savvy consumers sitting there with their smartphones and iPads. They get it, and that drives engagement."

Anthony O'Donnell has covered technology in the insurance industry since 2000, when he joined the editorial staff of Insurance & Technology. As an editor and reporter for I&T and the InformationWeek Financial Services of TechWeb he has written on all areas of information ... View Full Bio