Cover Story: In the Right Market
It’s not always what you say. Sometimes it’s to whom you say it that matters most—at least that’s the experience of the direct marketing team at Wisconsin–based AIG Travel Guard, a leading travel insurance plan provider and part of the American International Group Inc. conglomerate. Charged with growing the company’s consumer direct business, the team had long sought to home in on prospects that fit the image of its typical customers: the “NPR [National Public Radio] crowd,” as Carol Mueller, AIG Travel Guard’s director of marketing communications, describes them.
“They’re empty nesters … They’re in a higher income bracket. They have a computer, and they’re Internet savvy,” Mueller elaborates. “They obviously like to travel. They drive nice cars. They’re into investing … fine wine … gardening and fitness, and they listen to public radio.” But in a nation with more than 300 million residents, pinpointing the ones who fit neatly into this well-defined niche is, perhaps, easier said than done.
AIG Travel Guard launched its consumer direct marketing program in late 1999—focusing mainly on customer retention—but Mueller says it didn’t have “much success finding people like our current customers and doing more of an acquisition marketing initiative.” A partnership with Olathe, Kansas–based Ruf Strategic Solutions, specialists in marketing research and database marketing intelligence, changed that. Leveraging the agency’s travel and tourism expertise, targeted list services, advanced analytical and modeling capabilities, and NavigatorSM online customer relationship management system, AIG Travel Guard has succeeded in achieving two seemingly incongruous goals: casting a wider net with its direct mail while simultaneously narrowing in on the most qualified prospects.
Understanding Customer ‘Clusters’
At the heart of AIG Travel Guard’s direct marketing strategy is the often-invoked Pareto Principle, suggests Jake Ruf, Ruf Strategic Solutions’ vice president. “We’re looking for the 20 percent of your customer base that give you 80 percent of your revenue. Let’s focus our marketing expenditures on that group and treat these people differently.”