Originally published by Quantzig: A Marketing Mix Modeling Case Study on How Marketing ROI Was Optimized for an Insurance Company
Introduction:
Unlocking the secrets of Marketing Return on Investment (ROI) is pivotal in the dynamic landscape of the insurance industry. This case study dives into the successful implementation of Marketing Mix Modeling (MMM) by a major player in the insurance sector. Discover how Quantzig's research and insights empowered the client to strategically allocate its marketing budget, resulting in a remarkable 43% increase in ROI.
Key Case Study Highlights:
- Client Overview and Business Challenge
- Impact of Quantzig's Research
- Understanding Marketing Mix Modeling (MMM)
- Steps in Building MMM for the Insurance Company
- Game-Changing Solutions for the Insurance Industry
- Challenges Faced by the Client
- Quantzig’s Marketing Analytics Solution
- Benefits of Marketing Mix Modeling Solutions
- Broad Perspective on Marketing Mix Modeling for the Insurance Segment
- Key Takeaways of Marketing Mix Modeling Case Study
Understanding Marketing Mix Modeling (MMM):
Marketing Mix Modeling (MMM) is a data-driven analytical approach that evaluates the impact of various marketing elements on business outcomes. By delving into historical data, MMM identifies correlations between marketing inputs and key performance indicators (KPIs), enabling strategic decision-making to maximize ROI.
Steps in Building MMM for the Insurance Company:
Data Collection and Preparation:- Gather comprehensive data on marketing expenditures, sales, and relevant variables.
- Ensure data accuracy and completeness for robust analysis.
Defining Key Performance Indicators (KPIs):
- Identify specific business outcomes to optimize, such as policy sales or customer acquisition.
- Clearly define and quantify KPIs for effective measurement.
Model Development:
- Employ statistical modeling techniques to establish relationships between marketing inputs and KPIs.
- Consider factors like seasonality and market trends for a refined model.
Attribution Analysis:
- Determine the contribution of each marketing element to overall outcomes.
- Understand which channels and activities have the most significant impact on chosen KPIs.
Optimization Strategies:
- Utilize MMM insights to reallocate marketing budgets based on the most effective channels.
- Identify areas for increased investment and streamline underperforming strategies, driving efficiency and maximizing returns.
Challenges Faced by the Client:
Our client, a significant player in the insurance sector, sought to evaluate the impact of its marketing inputs to allocate its marketing budget better and achieve high marketing ROI. Despite past efforts, the client lacked the tools to assess and prioritize marketing inputs effectively. Quantzig consultants initiated a process to explore the impact of marketing mix variables on the client’s brand equity using a unique MMM framework.
Quantzig’s Marketing Analytics Solution:
Our data science analysts performed Pierson correlation tests, regression, and path analysis on collected data to determine relationships between marketing mix variables. Through questionnaires, data was collected from customers and representatives. The statistical package for the social sciences (SPSS) software and linear structural relations (LISREL) were used for analysis. Insights were derived by differentiating contributions from incremental and base drivers. Deep-dive analysis assessed the effectiveness of every marketing campaign based on genre, language, and channel criteria.
Benefits of Marketing Mix Modeling Solutions:
- Optimized marketing spend by focusing on building brand image and increasing awareness of products.
- Identified successful campaign elements, redirecting funds to high-performing channels.
- Achieved a 43% increase in ROI, establishing a long-term strategy for marketing activities.
- Extracted maximum value from the marketing budget and ensured business growth.
Broad Perspective on Marketing Mix Modeling for the Insurance Segment:
- Emergence of new marketing mix variables, including product/market trends, policy launches, events and conferences, and behavioral metrics.
Key Takeaways of Marketing Mix Modeling Case Study:
Quantzig’s MMM framework facilitates growth by:
- Evaluating the significance of specific marketing channels.
- Making marketing campaigns more effective.
- Ensuring higher conversion rates.
- Achieving higher brand exposure.
- Enabling the organization to create an optimum bouquet of marketing activities.
- Guaranteeing business growth and higher ROI.