Market Facts

Is target group what you think?Intuitively, the Body Guard concept feels like it should be a winner to revitalize this insurance company's image - and, especially, to defend an important segment of its customer base by providing genuine added-value.Even the concept...

Is target group what you think?

Intuitively, the Body Guard concept feels like it should be a winner to revitalize this insurance company’s image – and, especially, to defend an important segment of its customer base by providing genuine added-value.

Even the concept positioning – safety and protection – appears to be a natural fit for an insurance company, particularly one whose image strength is conservatism and reliability.

Rationally, however, it is the job of a good independent research company to play the devil’s advocate and to see that key questions are objectively answered.

Fortunately, the Body Guard service is still at the concept stage.

The broad question is whether there is a viable market for the Body Guard idea.

The media brief acknowledges the concept is aimed at ‘many of the company’s customers who travel to the southern United States during winter.’

We will refer to this target segment as Snowbirds (although the concept may have relevance for a somewhat broader segment than this phrase implies.)

The brief also clearly implies the primary aim of the marketing initiative is to stop the migration of its existing policyholders to other insurance companies.

The first question, then, is whether the Snowbirds’ concern for safety is as great as the concept assumes it to be. Or, more specifically, the extent to which the concept addresses their needs and concerns.

Assuming that it does address their needs, the second question is whether the Snowbird segment really does represent a significant chunk of the client’s customer base.

There is reason to believe the client’s information about his own customer base is not ‘hard.’

For example, it seems questionable that the average estate value of the company’s policyholder really is $750,000.

According to Market Facts’ Household Flow of Funds Survey, only 3% of households have a net worth of $750,000 or more.

More pertinent to the Body Guard concept is the proportion of the customer base that is retired.

The brief states that ‘at least half are retired.’ We would like to verify that this statement is supported by hard evidence. If it is, we still need to establish the proportion that are Snowbirds.

The third question to ask is whether the Snowbird segment of the customer base is, in fact, an ‘at risk’ segment.

New research technology exists for measuring customer strength of commitment – for determining which customers are loyal and which are vulnerable to competition.

This new technique (The Conversion Model) has been applied in a number of countries across many industries.

Frequently, but by no means always, it is found that the younger consumers are the more likely to switch, while older consumers are more resistant to change.

Since the primary purpose of the new marketing initiative is to retain policyholders who are likely to switch, we had better know that we are targetting a vulnerable segment of the customer base.

Even if we find that Body Guard does meet a real need among Snowbirds, that this segment does represent a worthwhile segment of the customer base, and that it is an ‘at risk’ segment, there are still other questions that need to be answered to ensure the service is put into operation in the most effective way possible.

The Body Guard service, as described, is a multi-faceted service, including the provision of a complete personal safety dossier customized to the selected destination; special service arrangements with car rental agencies; a survival kit; and an individualized lifestyle profile that includes advice on dieting, environmental conditions and local entertainment and other attractions.

It will be worth knowing the relative value that customers place on each feature – or if other features might have a greater perceived value.

This will be necessary to maximize the value of the service configuration and to minimize its cost. It would be unfortunate to invest a large amount of money in service features that have minimal perceived value.

The service delivery mechanism may be another issue.

What is the cost/value comparison between an automated system compared with live operators?

It is known, for example, from automatic teller machine research, that younger consumers are more technology-oriented than older consumers, who often prefer services that are more personally delivered.

If, as suspected, the target audience profile is not as well-defined as it should be, research will clarify this and thereby provide a better basis for media planning.

Last, but not least, a quantification of service demand will be essential to ensure demand can be properly managed. A high demand that cannot be coped with could do more harm than good.

The purpose of this submission is not to say whether there is a viable market for the Body Guard concept based on available information. Available information is undoubtedly insufficient.

The purpose is to convince the client to make an important investment in original research before proceeding any further.

The implementation of the Body Guard service sounds like a major investment. A research investment of, say, $25,000 and a delay of a few weeks is probably well justified.

Peter Greensmith is senior vice-president, research and marketing at Market Facts in Toronto.