Lookalike modeling is an integral strategy that harnesses the power of data analytics to help businesses with customer acquisition. Instead of targeting prospects at random, brands can utilize lookalike modeling to optimize the ROI of their advertising efforts. However, its success is heavily dependent on the quantity and quality of the data available.
When working with Speedeon, brands can effortlessly enrich their limited first-party data with comprehensive third-party data to build a solid look-alike model and target customers with more accuracy. Here’s a case of how Speedeon helped a new insurance provider gain leverage and win customers with the exact strategy to target new movers!
Let’s first take a look at the concept of lookalike modeling and why you need it.
What Is Lookalike Modeling?
Lookalike modeling utilizes machine learning to identify potential customers based on attributes, behaviors, interests, and demographic features of your existing customers. Essentially, you build a clone out of a seed set to identify lookalike audiences. This way, you can reach out to those interested in your products or services. They may even be looking for solutions at present. This targeted approach can also help you cut back marketing spend and benefit from increased conversions.
How to Build a Lookalike Model?
Lookalike modeling primarily requires input from first-party data sources to build a solid and accurate customer profile, which is often challenging for businesses that don’t have much to start with. Input from a wide range of first-party data sources is essential for a comprehensive and well-rounded persona profile. Only then you can succeed in targeting high-performing audiences.
Now, what if your seed audience is small or you lack sufficient first-party customer data to kick off the process? Can you still make your lookalike modeling work?
Absolutely. While you have to compensate for the lack of direct data with other supplementary data sources, it is possible to build a highly successful lookalike model with the power of predictive analytics. In fact, that’s how we helped our Insurtech client with customer acquisition.
The Indispensable Role of Third-Party Data
If you want to reach the right audience segments to promote one of your products but don’t have sufficient first-party data, don’t worry. In such scenarios, you need reliable and relevant third-party data to provide additional context to the customer segment you wish to clone. A reliable data provider like Speedeon becomes critical here.
Third-party demographic, behavioral, and lifestyle data can immensely be useful in providing context to your limited seed set and expanding on the information available. It will provide useful insights into your audience’s behaviors and expectations and focus on different subcategories of people who will be more likely to consider your offers. Here’s how we put this strategy into practice.
Choosing the Right Customer Segment
Our client, a disruptive Insurtech company, wanted leads for one of their novelty services. They particularly wanted to target drivers who would be interested in their newly-introduced usage-based insurance model. This included users who were at a point of upgrading to a new plan as well as people who would be interested in signing up for a new model.
Identifying an addressable audience for marketing campaigns based on new products or services can be challenging because in such cases, the availability of first-party data is very limited. At the same time, generic customer profiles are also not the solution, and they can take a big chunk of your marketing budget with little ROI.
Speedeon’s reputation for helping clients out of challenges didn’t come out of nothing. Our treasure trove of third-party data on different audience segments can help brands build solid marketing strategies from scratch!
Do All New Movers Need New Insurance?
We started by analyzing the company’s current offering to identify where it stands in the market, the value of its services, and what will be covered by the model. We also looked at its existing policyholders to determine the type of customers catered to by the company. While it gave us the bigger picture, the analysis was also essential for studying trends and insights related to the clientele of the business and thereby identifying the ideal customer profile to target.
Following our analysis, we found that movers are the best category. New movers, and more particularly, those who moved in from a different city, were strong performers as opposed to those who moved within the city.
New movers are a high-spending group and a segment more inclined to sign up for new products and services. People switching cities or even states have to replace many of their service providers, from doctors to insurance providers. They are also more receptive to trying new goods and services and likely to spend more than the average consumer.
While this was a breakthrough already, our client’s small seed list wasn’t sufficient to build a fully-fledged model. Therefore, we coupled the existing data with Speedeon’s high-value demographic and lifestyle data to identify the exact audience who will respond to our targeting efforts. Our highly enriched data provided us ample context to develop a strong look-alike model. We then utilized it for developing a highly personalized marketing campaign.
Our Sophisticated Model, Your Jackpot
Within a short time, it was clear that our advertisements targeted the right people. The company’s acquisition rates picked up, and we saw a 77% lift in responses. Our lookalike model leveraged specific customer attributes such as geographic location and credit score level to identify people more likely to be responsive, and it helped the company reduce the cost per lead significantly. The cost of acquisition dropped by half thanks to the specificity of the cloned model that accurately pinpointed the target audience. Without a look-alike model, the marketing cost would have been much higher.
Is Your Insurtech Strategy Ready?
Speedeon is not just a data platform that gives you access to the most recent data on different audience segments. Our solutions, like the AudienceMaker, ensure that our clients can optimize the use of our data. We can help you build successful models, and design effective marketing programs for your current and potential customers. Want to discuss a strategy for your insurance company?
