Customer Lifetime Value Case Study

Improve customer lifetime value by $6m per annum

We worked collaboratively with the customer’s decision makers and subject matter experts to determine a profitable growth pathway by more deeply understanding the drivers of customer lifetime value.

The Problem

Taking sales, cross-sell, persistency, and claims into account, can we achieve our financial objectives through a loss leader strategy?

Our customer is a life and health insurer in a competitive and commoditized market. Our customer wanted to use its lower cost medical products as an acquisition instrument, with the intention of up-selling higher value life products to policyholders in the future. To validate this strategy our customer needed to understand the customer lifetime value and cross-sell propensity of its policyholders.

Summary of What We Did

Montoux’s Decision Science Platform delivered the following outcomes:

• Analyzed over 60 million sales & price records
• Built price elasticity models (sales & lapse)
• Built price-to-claims propensity model
• Built cross-sell propensity model
• Integrated models into a holistic model for customer lifetime value

Benefits to Our Customer

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Identified opportunities to increase sales by 27% and improve customer lifetime value by $6m (5%)

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Delivered deeper insights into the drivers of customer lifetime value

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Proved the opportunity to extract value from the customer’s significant investment in data infrastructure

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Improve customer lifetime value by $6m per annum.