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Marketing
is about
bringing
clients to
the
Boardroom
Interview with David Tornel
DAVID TORNEL
David Tornel is chief marketing officer and marketing
& product management director at insurance company Ethias. He studied at the Solvay Business School
in Brussels and in 1993 started his marketing career
at Unilever where he worked for 12 years gaining a
broad marketing experience in fast moving consumer
goods. In 2005 he entered the world of the services
industry and became marketing director at Europ Assistance Belgium. “I had the feeling at Unilever that
my next step would be the services industry where
transactional marketing was already growing and
the approach was to individualise the contact with a
big number of clients,” Tornel says. The service was
different world from Unilever. “At least when I started
at Europ Assistance. Coming from Unilever where the
marketing discipline was central I entered a world
where at that time marketing was still operational
and on the way little by little to become strategic and
integrated.” In 2009 Tornel became an independent
marketing consultant and in 2010 he was hired by
Ethias.
What are the views of David Tornel (chief
marketing officer and marketing & product management director at insurance company Ethias) on
marketing? And how important is data in today’s
marketing?
Marketing is
about bringing
clients to the
Boardroom
The role of a marketer in David Tornel’s view is quite
simple: “In strategic marketing, a marketer has to be the
ambassador of the client. The role of a marketer is to let
the consumer, the client, participate in the boardroom. It
means the way decisions are being made, can fundamenInterview
with David
Tornel
tally change because
he ingrates
the sensitivity of the
consumer. When I became marketing director of Europ
Assistance in Belgium in 2005, it was a very interesting
move coming from a company like Unilever where marketing was at the core of a company, knowing that at that
time in other companies marketing was only confined to a
supporting role. Little by little I constructed an integrated
Ethias is a Belgian insurance company, which
started in 1919 as a company for civil servants
(OMOB-SMAP). In 2000 it opened up for all consumers and in 2003 it changed its name to Ethias.
marketing strategy. When I started at Ethias in 2010 it was
very challenging for somebody who loves marketing: in
the wake of the 2008 financial crisis, Ethias had to do a
recapitalisation, a change of paradigm. In the insurance
market there are two sources of income: interest from the
financial markets where capital is placed and - the basics
for an insurance company - income from premiums from
providing help to the customers. The first one dried up
after the financial crisis and insurance companies had to
develop and turn more profit from their classic activity.”
You think the way Ethias is doing its marketing, using
its marketing tools has changed in the last couple of
years?
David Tornel: “Yes. We have now have eight times as
many consumer surveys. There is a willingness to better
understand their motivation and their behaviour. We also
have developed marketing analytics in a big way. We
have reinforced the CRM part. But in marketing ‘intuition’
is still very important. Marketing will not be a laboratory
where you only do calculations. Analytics has however reinforced the intuition part. Intuition has also been
nurtured by qualitative research. Thanks to analytics and
transactional programs we succeeded in making a big
leap forward in the way we approach the market and the
way we manage our relationships with the clients.”
CHANGE
Ethias has always been a ‘direct writer’ in insurances.
A database was already in place; the direct thinking
was there. Has the qualitative approach been a step
forward?
David Tornel: “The change was more profound than that.
It is true: Ethias was formerly SMAP/OMOB, an insurance
company for civil servants. Before 2000 Ethias never
did classical advertising in the media. We didn’t need to
because of our positioning. You had to be a civil servant
to be a client. Instead, we had the data of our clients and
we had a direct relationship with our clients. But we used
those data just to do our job.
Since 2000 everybody can become a client at Ethias, and
we are in a much more competitive environment. We still
have a large proportion of civil servants, but in the consumer insurance market it only amounts to about 30%. A
big chunk of that growth came from the general public. It
was an advantage to have data back then, but we only
used them do to our ‘métier’.”
How is the cooperation between ‘intuition’ and ‘analytics’ in CRM?
David Tornel: “The challenge in terms of management
is to get the ‘left hemisphere’ and the ‘right hemisphere’
regularly around the same table: the extreme cartesians
(very technical, very analytical) and the classic marketer.
The cooperation at Ethias works well and it allows us to
have a real diversity. The analytical part developed within marketing intelligence forms the crossroads between
the cartesian spirit at one side, and the creative spirit at
the other.
The profiles of people I recruited for the development
of the CRM department are really more mathematically
minded that those you’ll find in classic marketing. You
have to take into account that marketing is not the same
discipline that it was 15 years ago. People who manage
marketing departments appeal to experts in communications and data. Marketing is getting more complete, and
more complex.”
Is it easy to find mathematicians with a marketing spirit? You have to have a knack for marketing when you do
analyses.
David Tornel: “They are very difficult to find. They have to
be number-crunchers and they have to have a commercial feeling - and that is fundamental.
In my department there are 50 persons at the moment.
Half of them are cartesians. The latest recruits are data
analysts who can study the behaviour of the clients using
concrete data. We analyse almost continuously - but not
in real time - 350 variables of our clients. We have various
databases: data of the contracts, socio-demographic
data, data of the lifecycle of our clients, data of accidents
and transactional data. We analyse more and more how
people behave on our websites, which pages they visit,
where they hesitate. The CRM analytics are very interesting: via the regression analyses and the mathematical
algorithms we can explain behaviour, which we could not
identify before.
However, the risk is that you lose yourself in the data.
All the tools you use, all the marketing disciplines you
have, always have to be linked to the strategy. I have to
make sure we work towards the same goals and have a
common vision.”
CARS
What do most people buy first? Car insurance? And
then you look at the possibilities to cross-sell?
David Tornel: “That’s one of the disciplines we have put
in place: identify the product that triggers a new client
and define his profile. Two years ago we changed our
structure by creating three pools: one pool for acquisition
(all the operations to acquire new clients), one for CRM
(when we have qualified the new client) and one as a
support pool. “One in two clients comes to us for our car
insurance. That is the product we allocate most of our
advertising budget to. Our second product to acquire
new clients is home insurance. When a client buys a car
insurance policy, CRM evaluates the client and makes
a prediction what other products we can propose. So
we propose a policy that is the most appropriate for the
client and we start to build a portfolio. When a client has
home insurance, we know that a family insurance is a
logical next step and we will propose it via direct mail or
e-mail.
We are an ‘omni-channel insurance company’. The client
of today is ‘hybrid’. In most cases, he starts his consumer
journey on the Internet. He can then switch to the telephone and close his journey in one of our insurance offices. Our CRM has to be able to follow him and for instance
make sure he doesn’t have to give his name and address
over and over again.”
So the software must recognise the client?
David Tornel: “Absolutely. When you start on the Internet and afterwards visit an office, we have to be able to
follow you.”
Do you have figures to prove the effectiveness of the
algorithms?
David Tornel: “CRM can predict when a client is at risk
to leave you. The duration of a contract is one year, and
one has to cancel three months in advance of that term.
The moment someone cancels you are too late. So the
bet is to predict when a client has a high risk to leave
you. Parallel to it you have to know the value of a client.
Some clients are not very profitable, others are. You have
to appreciate the value of a client not only in the past
but also in the future and compare him with other clients
who have the same profile. Two years ago we created a
model for churn based on a regression analysis. We have
succeeded in bringing the churn in car insurances down
to 23%. That’s a lot...
Another application is to identify clients who are in the
market for additional products. For example when you
have car insurance we can propose an assisting product.
We have multiplied the conversion rate by 4. But you
have to be aware that the system has its limits. The extra
client always has a higher cost of acquisition. When I
want to have 10,000 new clients, the first 2,000 are cheap
thanks to the predictive CRM but the next 1,000 will be
more expensive. You have to look at the amount of money you want to spend to acquire new clients.”
You gather a lot of data per client. Do you already exploit it for 100% or maybe just 50%?
David Tornel: “We are just at the start of things. We have
developed ‘analytical’ during the past two or three years.
You have to link the analytics to your business strategy.
When I have 1,000,000 possibilities, there are only a 100
that really are of interest to me.
You must look at the ROI. Companies like ours that manage more than a million clients have to work with clusters.
If we really go to customer intimacy (one-to-few, not yet
one-to-one) the costs will be far too high in relation with
the return on investment. We sell an insurance product.
On average, car insurance is worth 300 euros. Working
for weeks in data to get to a group of clients of 150 each
worth 500 euros in turnover makes no sense. When the
turnover is 1,000,000 per client you can afford to have
very individualised communication....
However, what will be our next stage, I think, is to enrich
our data with external data. What we are not doing yet is
integrating information from Facebook in our approach.
You can imagine a client who writes on Facebook that he
intends to buy a car. We can send him an offer.”
Or writing you have driven 200 kilometres per hour on
the motorway...
David Tornel: “If a person it that naive to let that know...
There are also a lot of deontological issues there...”
FMCG vs. services
DARING
When you compare an fmcg-company like Unilever with
an insurance company like Ethias, you are ahead of
your fmcg marketing colleagues. They also have a lot
of data of their clients in their CRM programs, but they
lack behavioural data, which you have.
David Tornel: “The services industry is still not (yet) the
most interesting to start a marketing career. The force of
an fmcg company is that it is a real marketing company.
Young marketers, just fresh from university, who want
to learn the trade, have a lot more possibilities in fmcg,
no doubt about that. However, it is true that the services
companies have a lot of existing possibilities to enrich the
marketing approach in the field of transactional. I think
fmcg marketers struggle there because there is no direct
transaction with the customer. The supermarkets are the
ones that have the relations and the facilities to analyse
a stream of data.
But I see that many of my former colleagues at Unilever
have taken the plunge at a certain point, and have gone
to the services industry. Another example, at Ethias we’ve
now had the Net Promoter Score, NPS, for one year. All
clients, who have had contact with us, whether it is via the
internet, via our contact centre or an office, for what may
be the reason, commercial, administrative, an accident,
are systematically questioned for their NPS-score. We get
a lot of information. You can react when a client is dissatisfied. When in the fmcg industry a client doesn’t like a
jar of yoghurt, the company is not aware of it, and when
you know it, you have a big production problem on your
hands!
A second advantage is we get very interesting testimonials and we use them. And thirdly, a satisfied client is an
excellent ambassador for your company. In fmcg that’s
more difficult to achieve.”
You mentioned one-to-few. How can you make a mailing personal?
David Tornel: “We do a lot of concept testing, pre-testing,
post-testing, A/B testing. A lot of our campaigns are made
in co-creation with our clients. It is a triangle: we (Ethias),
our agencies and a panel of clients. We ask our clients
individually what they think about a concept. We do focus
groups with a moderator. We have done quite a lot of
daring campaigns. To be honest: I would have hesitated
to run a campaign without the reassurance from the participating clients.
And all communication based on personal data is susceptible to change. Your family situation can change, a
divorce, a death... You have to be careful to offer products
to someone who has had an accident... In our CRM-system we can suppress some records temporary or indefinite.”
Are there companies in the services industry you envy
in terms of analytics?
David Tornel: “I think some banks have an advantage.
The number of contacts an insurance company has with
its clients is limited, especially compared with a bank that
offers online banking. The quantity of data a bank has
is enormous. But saying I envy them? No. It simply is the
amount of data. You can also have too much data. Supermarkets that have this much data struggle to keep up. I
think we at Ethias have less of a problem there.”
All marketing becomes direct marketing, was said a
couple of years ago. All industries have data, not only
the classical direct marketing and distant selling industries.
David Tornel: “And CRM is an enterprise project, not a
marketing project. Not only because the costs are high
and have to be shared by various departments, but is
also a change in the mindset of the companies. If CRM is
only about personalising and you don’t use in the rest of
the funnel, it is of no use.”
Ethias still has a personalised magazine?
David Tornel: “Yes, the welcome-pack. Each new client
receives a magazine, personalised with his or her name
on the cover (their surname is the title of the magazine).
The content is personalised based on socio-demographical data and on the product they bought. We use digital
printing.”
In the past there were 100,000 identical mailings. Only
the names and addresses differed. Thanks to data and
digital printing you can send various mailings, also with
different pictures.
David Tornel: “True. Nowadays we do mailings, 5,000 or
7,000 and the response figures are very high. The diminishing costs of digital printing make it possible to do
mailings in small quantities with good results.”