What you need to know

• Compare Club surpassed its larger competitors, Compare the Market and iSelect, by leveraging sophisticated data analytics under Chief Customer Officer Rich McPharlin and focusing on a value-centric marketing approach to data engineering rather than one focused on technical optimisation.
• The company successfully reduced its cost of customer acquisition by 9.5 per cent, significantly impacting its bottom line, where marketing is its largest expense.
• Compare Club sells half of all intermediate and health insurance policies in Australia, positioning it as the leading comparison business in the industry.
• Utilising a composable Customer Data Platform (CDP), the firm integrates and activates customer data across various marketing channels to enhance targeted messaging and customer engagement.
• The data architecture, built on platforms like Snowflake and Hightouch, is fed into social, search and email channels, with data driven back and enriched in its two legacy Salesforce instances.

Compare Club is outcompeting two rivals with arguably much stronger brand investments, and its secret weapon is a sophisticated data analytics play that sits under chief customer officer, Rich McPharlin.

At a time when IT departments are reasserting control over data architecture, this approach is working well for the organisation and reflects a simple reality—marketing is its biggest cost.

According to McPharlin, “If we can use data to improve performance, 1 per cent, 2 per cent, 5 per cent, that's a very, very easy value case for us. Sometimes, if you embed data in engineering or elsewhere like finance, it can become disconnected from the business to some degree and become almost abstract. The decision to keep it as close to the operational revenue-generating part of the business as possible is a decision that continues to make sense for us.”

He describes the philosophy as value-centric as opposed to optimisation-centric.

The proof is in the numbers. As McPharlin told Mi3 Australian recently, "The headline stat is that we were able to reduce the cost of acquisition in our key customer segments by 9.5 per cent. In an organisation where marketing is the largest line item, that's really material. It flows through straight through the bottom line."

The investment in smart data marketing has helped drive Compare Club to number one in its market, he says. “We are by far the biggest comparison business in the industry. You probably know our two big competitors Compare the Market and iSelect. They are owned by the same business, which is also an insurance business."

Compare Club sells as many policies as the two of them combined, he says. "We sell half of all the intermediate and health insurance policies the country, and we sell one in 10 of all new health insurance policies.”

Asked if he is ever tempted to try and match his rivals' higher marketing profile in media channels McPharlin says, “That’s probably where the CDP comes in.

“The reality is, we have had a very margin-centric lens on marketing, and marketing's role as a revenue and margin creator, versus a brand-first approach. That's really allowed us to get in front of the right customers, right time, right message, present a compelling offer, then move that customer through lead generation, sales nurture, retention pipeline, far more effectively than our competitors.”

CDP business case

By international standards, Australia is a relatively small insurance market with about 5.5 million health insurance policies and 3.3 million life insurance policies.

According to McPharlin, “We were finding we were dealing with the same people time and time again. We sell about 110,000 health insurance policies a year and about 20,000 life insurance policies. We talk to a million customers across those two lines of business, but every year it's the same million customers.

“Every year, we were paying Facebook and Google $40 to $60 a pop to talk to the same customers year in, year out. They're in our database. They were clearly interested in the product continuously, but we just weren't getting in front of them in cost-effective ways at the right time, either through media or through other means, to get to present the right offer on the right message.”

For Compare Club, the core of the CDP use case was the ability to activate its data uniformly across a range of ecosystems simultaneously, to present the right message based on what it knew about people,

“That's been our biggest challenge as a non-brand entity. We've seen our competitors on TV or on the sides of buses and all of that.  People, even though they generally have great experiences with us and our Trust Pilot results confirm that they often don't remember that they've dealt with us, whether they have bought from us or not," McPharlin says.

“So it's about using that information we've acquired from those people over the last decade to inform what message I should send them, what time, what their trigger points are to be really effective at getting them to take action.

“That could be via Facebook or through Google, or it could be through email, or it could be the right phone call based on the right times to the right customer."

Technical Solution

As a function of its legacy as two separate businesses, Compare Club has two Salesforce instances. That, says McPharlin, is where a lot of the complexity starts.

“An early job for us was to get all our data into Snowflake [cloud data warehouse solution] effectively in real-time, and build customer models where we can stitch everything that we know about you, from the life insurance to your mortgage to your health insurance and to your family, into one single customer model," he explains.

With that data in Snowflake, Compare Club opted for a composable CDP. “We were able to drop in Hightouch, effectively, straight over the top of that.”

Hightouch automatically syncs up-to-date customer information directly into a brand's marketing tools, such as email, ad, or CRM platforms, enabling brands to quickly create targeted, personalised campaigns.

Compare Club uses it to activate and distribute customer data to everything from, “…Facebook and Google to Braze, which is our email marketing platform. We use it to actually drive the data back into Salesforce and take those enriched customer models and repopulate them back to both Salesforce instances using both our first-party data, but also second and third-party data have required from other sources over time as well.”

McPharlin’s own experience with vendor CDPs, along with those of his colleagues, made him cautious about pursuing that approach.

“We had used those solutions in previous organisations or been pitched them repeatedly, and the price tags are unwieldy. We were quoted half a million bucks off the bat for licenses on those platforms when we [only] wanted one of the 14 features. I don't want to sell out friends at Hightouch short, but they were materially cheaper by several orders of magnitude in terms of licensing costs," he says.

As a rule, McPharlin avoids the 'Bright, Shiny, Object' approach to martech.

“Rather than finding a nice, shiny tool with lots of sexy features, we really start with a value case where we can really definitively say, if we do ‘X’ and ‘Y’, we're going to see ‘Z’ come at the back of it, and if the numbers stack up, then we go and we go and do that," he says.

That’s why the composable approach was so attractive. “We could clearly articulate based on activating some data from one location to the second location, that A, we cut out what would be very expensive, time-consuming, and bug-prone. B, we could put in the hands of non-technical users, and(c)  they could realise those activations in minutes.

“That, and the price point just made the ROI very, very obvious for us.”

What's next

Marketing of course is not just cold-blooded data analytics. Instead, McPharlin hints there may be adjustments incoming. "When I joined five years ago, we were very much a performance marketing organisation. The same way you would expect a big performance marketing agency to be. We were very analytical, very in-the-detail, very much around tweaking things down to the last per cent.

"Now I say to my guys, we need to put the marketing back into performance marketing."

With such a laser-like focus on things like data attributes and segments, it is easy to forget to drive the levers of emotion and connection.

"We've got all the tools. Sometimes you actually need to reorient yourself almost back to the marketing piece which is to say, it doesn't matter how smart you are and how analytical you are, if you can't connect with people, then you never get the return," McPharlin adds.