Segmenting Markets – Private Health Insurance Case study

A well-known, Australian private health insurance fund had grown and expanded, offering not just health insurance but also travel insurance, life insurance and retirement planning.

They had an existing consumer segmentation model which was developed years earlier – using a combination of lifestage, age and attitudinal information specifically related to health insurance.

There was a strong need to update this; to develop a broader segmentation that reflected their contemporary expansion into non-PHI areas.

a&b was selected as their research partner. We were able to demonstrate via philosophy and methodology not only expertise and experience, but specifically that an appropriate segmentation would:

  • Feature homogeneity within each segment
  • Demonstrate differences between segments (respond differently to programs, communications, etc.),

and would feature segments that are:

  • Measurable (known size, characteristics of each segment)
  • ‘True’; (that the segments are validated to exist in the real world)
  • Substantial (large enough to be profitable)
  • Accessible (can be reached via communications)
  • Actionable (effective programs can be formulated for attracting and serving them)
  • Durable (remain relevant for a significant period of time)

How we approached the challenge

This project included:

  • Desk research of existing knowledge from primary and secondary resources
  • Extensive initial consultation with stakeholders (all tiers of staff) to map how the segmentation needed to work with various departmental systems
    • Involved frontline staff – gleaning insights about the segments they encountered on a day to day basis. In addition to interesting and motivating the team, the process was treated as part of the organisation’s accredited customer development skills development HR programme
  • Qualitative research, to identify the triggers, drivers and barriers with participation of the various categories of insurance our client participated in. This extensive investigation yielded critical insights into:
    • I believe… myths, opinions, facts, authorities, influences, professionals
    • I should… defences: fears anxieties, denials
    • I need… needs states, individual, affiliative, introvert, extrovert
    • I want… physio, massage, knee replacement, added benefits
    • I do… behaviours or changed behaviours resulting from all of the above
    • I choose… Brand choices, brand beliefs, needs, etc.
    • I don’t want… what I don’t need (revealing opportunities)
  • Quantitative research to measure and develop the segments. On-line, re-interview design featuring a completed sample size of approximately 2,500
  • Consultancy on how to tag each segment to their data base – data warehousing input solutions and defining the incremental information needed to asked of each member/enquirer to provide reliable categorisation for DM and other marcomms activity.

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What we learned

  • We found that lifestage was a key discriminating variable across categories and that attitude differed within lifestage
  • To this end we created a unique attitudinal segmentation within each lifestage. These were then validated
  • We embedded these into the organisation via extensive workshopping
  • Our clients were delighted with the outcomes – they were able to confidently develop unique marketing plans and products for the segments of most attraction

What we also offer today

1. Time and resource poor clients demand full-service solutions

  • We know that clients need much more of a research supplier nowadays – with headcounts dwindling, you don’t have the time to do all the running around. a&b recognises this and has a suite of marketing services to assist with the project management and stakeholder liaison.
  • a&b is part of much more than just market research! Arnold & Bolingbroke (Holdings) Pty Ltd has, in its family of companies, experts in marketing research (a&b), in-house creative development (DNA Counsel), HR, training and professional development consultancy (ETAL Consultancy). For example, we can create and engage creative materials to elicit insights from client and supplier stakeholders (e.g. ‘frontline’ staff) and to design and roll out digital collateral to upskill and inform these stakeholders about the new segmentation and how it affects them and their roles

2. Embedding the segmentation

  • Professional quality Insights Alive© movies of each segment are typically provided – hosted on the client’s intranet. These bring to life the segmentation, providing easy to understand, quick insights into what makes each segment unique. This is an important output to ensure that all stakeholders and external suppliers have the same common understanding of the segmentation solution

3. a&b Research Communities – for innovation

  • A specially formed on-line research community adds a powerful incremental dimension to traditional qualitative research methodologies. In an online research community members (rather than ‘respondents’) talk to each other – they exchange ideas and discuss issues with each other. Unlike a panel this lets you watch how people interact and let them raise the questions you want to ask. You can get richer responses because you get to see how members talk about issues and what language they use. You see what questions they ask each other, which may not be the ones you’d choose to ask them. It’s all about seeing members in their social context
    • a&b research communities are leading edge in design and technology – for initial qualitative research for a U&A/segmentation one can obtain a deep dive into issues faster and more cost-effectively
  • Brands also benefit from online communities by having them on-hand to answer questions, test hypotheses, and observe
  • Online technology can adapt to almost any research need, be it showing creative stimulus material, gathering ideas for innovation and co-creation or simply an instant ‘go/no go’ when you need it
    • a&b can form customised research communities featuring your key lifestage, attitudinal or behavioural segments. We can then involve the segments to road test ideas and feed directly into your new product or creative development processes
  • Our communities can be populated with your target audience AND with specially invited members of your company staff – for example frontline staff. This gives a very cost-effective and efficient way to involve your organisation directly into research activities

a&b – experts in segmentation

The bottom line is that a&b knows segmentation.

Other major segmentations featuring our unique approaches have been conducted for:

  • Woolworths (segmenting Dick Smith customers),
  • Commonwealth Bank (credit card user segmentation),
  • InsuranceLine (propensity modelling and segmentation),
  • Pernod Ricard (segmenting Australian wine buyers),
  • Hyundai (availability of luxury segments),
  • Mercedes (identifying sub-categories in the luxury market),
  • Qantas (business travel market segmentation).

For all these segmentation studies, a&b led the project and minimised the direct involvement needed by our time-poor clients. This we achieved through a thorough project planning and updating process that allowed the client to determine, as they wished, at any time exactly where we up to with the project.

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To learn how a&b can add value to your organisation’s marketing and business strategy, contact us:

[email protected]
+61 (2) 8227-5400