Auto insurers confounded by shifting purchase patterns can
better understand the mindset of consumers � and adjust marketing
plans accordingly � with today�s release of the first Insurance
Consumer Dynamics study by Acxiom� Corporation (Nasdaq:
ACXM), a global leader in interactive marketing services.
The �eye-of-the-consumer� analysis reveals which consumer
segments are more likely to maintain policies with their current
insurer and which are actively looking for change to fulfill their
auto insurance needs.
�As the auto insurance industry navigates through this
challenging economy, consumers are instrumental in driving change,
creating a new model for insurers,� said Holly Marr, Acxiom vice
president, insurance practice. �Using proprietary
segmentation-modeling, Acxiom offers insurers a new and timely
approach to segment and group consumers, creating a competitive
market advantage.�
Acxiom�s proprietary research was conducted to help auto
insurers confront a number of critical issues:
- Changing shopping and buying
patterns of auto insurance consumers
- Increased customer churn of
certain customer segments
- Evolving customer preferences
related to desired value propositions
- Commoditization of auto
insurance
Acxiom�s Insurance Consumer Dynamics study was designed to help
insurers find solutions to these challenges and to identify key
consumer segments for new and existing customers. The study
identifies which segments of consumers are looking for a new value
proposition, which are shopping online for new alternatives and
which have the greatest potential for direct or agent led
insurers.
Acxiom analyzed auto insurance consumer-behavior traits and
general motivations, which resulted in the identification of eight
differentiated consumer segments: Price Isn�t Primary, Solid
Suburbans, Full House, The Nest is Empty, Country Middles,
Stretched Singles, Hands Full and Getting By.
The study groups each segment into three categories to indicate
likely purchasing behavior:
Staying the Course represents the status quo. These
consumers value the agent relationship, are the most economically
stable, have the highest income and are least likely to shop
around. This group comprises Price Isn�t Primary, Solid Suburbans
and Full House consumer segments.
Open to Options consumers believe price is important but
is not the only consideration. They have the most adults and
vehicles per household. They are economically stable in the
mid-range of incomes. They are willing to consider a good value but
are not desperate to change. This group is made up of The Nest is
Empty and Country Middles consumer segments.
Cutting Corners is looking for ways to save. Household
members share vehicles and are actively engaged in price shopping.
They rank at the bottom of the scale in economic stability.
Consumer segments include Stretched Singles, Hands Full and Getting
By.
�For auto insurers, the implications of the study are
significant,� said Marr. �With nearly every insurer facing
constrained marketing budgets, effectively reaching offer-receptive
consumers is more critical now than ever. The consumer segmentation
and analysis contained in this study helps guide strategies for
reaching the right consumer with the right offer via the right
channel.�
Acxiom�s study finds a consumer-centric approach can help a
variety of auto insurers in several ways:
- Captive and direct insurers can
more accurately target specific groups of consumers who are less
active in the marketplace yet open to change (Open to
Options consumers).
- Member-based firms can deliver
timely communications to consumer households recognized as actively
shopping (consumers who are Cutting Corners).
- Direct insurers can study the
characteristics of consumers who prefer the agent model and target
them with appropriate offers, emphasizing reliability and service
(Staying the Course consumers).
The study reveals why Staying the Course consumers
generally view price as less important and are likely to generate
higher premium dollars because they favor more coverage, drive more
vehicles and have more licensed drivers per household. Compared
with other groups, they tend not to favor direct carriers.
�Insurers servicing these customers should protect their base
through contact with an agent or member organization and provide a
strong service offering with attractive multiple-item coverage,�
said Marr. �Marketing communications that point out the benefits of
their full-coverage policies will resonate with this group.�
Open to Options consumers are an attractive prospecting
target, according to the study. This price-conscious group
primarily comprises households with multiple drivers and vehicles.
They use the Internet to gather information and aren�t afraid to
shop around for good deals.
�It�s important to note the motivation behind their price-driven
tendencies,� said Marr. �They like to feel like they�ve made smart
choices, whether or not cost was actually the deciding factor.
Insurers who service Open to Options consumers also need to
know these individuals have the potential to be long-term customers
if they are treated well and if the insurer can foster a sense of
trust.�
Acxiom�s research found those who are Cutting Corners
tend to look for insurance carriers who specialize in basic
coverage. �The fact that they�re relatively easy to attract needs
to be balanced with the reality that they�re probably just as
inclined to leave should an even better offer present itself,� said
Marr. �Insurers who would fare best with Cutting Corners
consumers are those who approach the business aggressively, keep a
tight control on expenses and use volume as a counter-balance to
the lower margins these customers provide.�
The findings of the Insurance Consumer Dynamics Study were
developed by analyzing 70 lifestyle segments across the United
States using Acxiom� PersonicX� market segmentation system.
PersonicX determined the demographic characteristics and the
motivating behaviors that cause consumers to act.
�When it comes to the future of auto insurance, consumers are
clearly in the driver�s seat,� said Marr. �Through their intentions
and actions, consumers are creating a blueprint for insurers on how
to structure the ever-evolving agent and/or direct model. The
hallmark of that model is the need for value propositions tailored
to individual customer preferences.�
To download a free copy of the Insurance Consumer Dynamics
study, email inscondyn@acxiom.com, go to
www.acxiom.com/insuranceconsumerdynamics or call +1 888.3ACXIOM
(888.322.9466).
About Acxiom
A global leader in interactive marketing services, Acxiom helps
clients connect with their customers through deep consumer insight
that enables effective and profitable marketing initiatives and
business decisions. Our consultative approach spans multiple
industries and incorporates decades of experience in consumer data
and analytics, information technology, data integration, and
consulting solutions for effective marketing across digital,
Internet, email, mobile and direct mail channels. Founded in 1969,
Acxiom is headquartered in Little Rock, Ark., and serves clients
around the world from locations in the United States, Europe, and
Asia-Pacific. For more information about Acxiom, visit
www.acxiom.com.
Acxiom and PersonicX are registered trademarks of Acxiom
Corporation.
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