iSelect outlines new approach to arrest ineffective marketing as it reports full-year results

Insurance comparison site reports a 2 per cent decline in revenue but cites stronger customer engagement as it refocuses its marketing strategy back on conversion and digital

iSelect has claimed the ineffective marketing approach that saw the brand too focused on traditional media and led to a 2 per cent dip in revenues for the FY18 financial year is on its way to being arrested.

The ASX-listed insurance comparison site announced its full-year financial report to 30 June 2018 today, confirming a 2 per cent drop in total revenues to $181.4 million, triggered by weaker revenue in health insurance sales. EBITDA came in at 15.7 per cent, a 46 per cent drop year-on-year, with reported EBITDA at a negative $5.5 million, a far cry from the $28.6 million reported in FY17.

Underlying EBIT scraped in at $8.5 million, just within the dramatically lowered forecast expectations of between $8 million and $12 million announced in April.

Customer leads were down 2 per cent to 4.2 million in FY18, a result iSelect directly attributed to significant investment mistakenly being made into an ineffective brand campaign focused on above-the-line channels. This saw overall marketing efficiency reduced and is an issue that’s now being addressed, the company stated.

Specifically, health revenue declined 5 per cent to $89.1 million over the year, while EBITDA dropped 45 per cent to $12.4 million.

Despite the less-than-ideal results, iSelect did note some highlights. One was that sales per customer were up 3.3 per cent, or from 1.38 to 1.43, with gross revenue per customer increased from $463 to $475 over the year. iSelect also cited 9 per cent revenue growth in energy and telco sectors.

In a press statement, iSelect said the group’s new senior executive team, installed over the past four months, now has an “unrelenting focus on operational excellence”, leading to a strong start to FY19 and putting the business on a growth trajectory once more. As a result of these efforts, interim CEO, Brodie Arnhold, will now lead the business for up to 24 months while a longer-term CEO replacement is sought.

The abrupt departure of iSelect CEO, Scott Wilson, in April, came as the group slashed earnings expectations for FY18 and announced plans to restructure the executive team. It was at this time that iSelect appointed new CMO, Warren Hebard, to replace Geraldine Davys, who left earlier this year and has since joined Nissan Motor Corporation.

“The challenges our business faced in FY18 have tested the resilience of our team and our underlying business model,”Arnhold stated. “We have refocused on our core capabilities centred around delivering our customers real value in their buying decision. We have also successfully rebalanced our marketing spend over the last quarter of FY18 and into FY19, to increase higher quality leads for a lower spend.”

On the marketing front, the dial has firmly been turned towards conversion and digital spend. iSelect said it’s significantly redirected the marketing mix to minimise non-productive costs, increased SEM, exited under-performing agreements, contracts and agency relationships, and restructured the marketing team with an emphasis on internalising resources and execution.

As a result, the company claimed a year-on-year reduction in cost per acquisition metrics of -42 per cent in May and again in July, and said marketing as a percentage of revenue has decreased by 14 points in May, 10 points in June and 18 points in July.

“ISelect’s Fy18 result featured a strong focus on conversion, particularly in the last quarter, across all our key verticals. This is an achievement the new senior executive team is proud of, and we have seen this trend continue through July and into August,” Arnhold said. “Even though the business was impacted in FY18 primarily by a miss-step in marketing that skewed too heavily to traditional media, this is being rebalanced with a focus on efficient, targeted marketing spend that is supporting more optimal lead profiles being generated.”

In addition, iSelect invested $9.9 million into new technologies in FY18 including Salesforce CRM, iConnect and WeSelect, and has brought on its first chief experience officer. Slade Sherman, to lead further technology development.

Key priorities include shifting from desktop to mobile and messaging, personalising to better meet customer needs, improving methods for finding products through search and discovery, and lifting customer lifetime value.

“People and technology are the backbone of iSelect. We have increased investment in targeted technology to drive long-term value for both our customers and shareholders alike enhancing our valued offering to all our customers with the aim of making their lives less complex,” Arnhold said.  

Follow CMO on Twitter: @CMOAustralia, take part in the CMO conversation on LinkedIn: CMO ANZ, join us on Facebook: https://www.facebook.com/CMOAustralia, or check us out on Google+:google.com/+CmoAu    

 

Join the newsletter!

Or

Sign up to gain exclusive access to email subscriptions, event invitations, competitions, giveaways, and much more.

Membership is free, and your security and privacy remain protected. View our privacy policy before signing up.

Error: Please check your email address.
Show Comments

Latest Videos

More Videos

More Brand Posts

What are Chris Riddell's qualifications to talk about technology? What are the awards that Chris Riddell has won? I cannot seem to find ...

Tareq

Digital disruption isn’t disruption anymore: Why it’s time to refocus your business

Read more

Enterprisetalk

Mark

CMO's top 10 martech stories for the week - 9 June

Read more

Great e-commerce article!

Vadim Frost

CMO’s State of CX Leadership 2022 report finds the CX striving to align to business outcomes

Read more

Are you searching something related to Lottery and Lottery App then Agnito Technologies can be a help for you Agnito comes out as a true ...

jackson13

The Lottery Office CEO details journey into next-gen cross-channel campaign orchestration

Read more

Thorough testing and quality assurance are required for a bug-free Lottery Platform. I'm looking forward to dependability.

Ella Hall

The Lottery Office CEO details journey into next-gen cross-channel campaign orchestration

Read more

Blog Posts

Marketing prowess versus the enigma of the metaverse

Flash back to the classic film, Willy Wonka and the Chocolate Factory. Television-obsessed Mike insists on becoming the first person to be ‘sent by Wonkavision’, dematerialising on one end, pixel by pixel, and materialising in another space. His cinematic dreams are realised thanks to rash decisions as he is shrunken down to fit the digital universe, followed by a trip to the taffy puller to return to normal size.

Liz Miller

VP, Constellation Research

Why Excellent Leadership Begins with Vertical Growth

Why is it there is no shortage of leadership development materials, yet outstanding leadership is so rare? Despite having access to so many leadership principles, tools, systems and processes, why is it so hard to develop and improve as a leader?

Michael Bunting

Author, leadership expert

More than money talks in sports sponsorship

As a nation united by sport, brands are beginning to learn money alone won’t talk without aligned values and action. If recent events with major leagues and their players have shown us anything, it’s the next generation of athletes are standing by what they believe in – and they won’t let their values be superseded by money.

Simone Waugh

Managing Director, Publicis Queensland

Sign in