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

Blog Posts

5 cornerstones of a strong digital culture

Creating a strong company culture may sound like a daunting task, but it’s actually pretty straightforward. In fact, company culture is created in exactly the same fashion as a religion or democracy. Behaviours created from the organisation’s inception are reinforced over time by leadership, attracting like-minded people and eventually reaching critical mass to become an accepted ‘truth’.

Anthony Stevens

Founder and CEO, Digital Asset Ventures

Should you rebuild your company’s tech stack in blockchain?

The question I get asked most regularly these days is: ‘Do I need to rebuild my company’s systems on Blockchain?’ And the answer, every time, is ‘No, you’re asking the wrong question’.

Michelle O'Keeffe

CEO, Engaging.io

Customer value proposition: Getting the brand promise to your customers right

Throughout my career, I have witnessed a litany of brand names that profess to have a unique customer value proposition (CVP). In reality, however, they’ve had little more than a ‘value proposition’: A simple list of benefits applied to a general audience.

Ric Navarro

Global director of marketing and communications, Norman, Disney & Young

Thanks for writing about chatbots. Definitely bots have the exciting future when it comes to customer engagement, transactional and conve...

Giridhar Prathap Reddy

Deloitte TMT Predictions: AR and mobile crucial for marketing success in 2018

Read more

Hi there! Thanks for this interesting article! I love to read about new technology and software that makes our lives easier. I'm looking ...

Julia Summer

Wartsila overhauls Web platforms to create ‘seamless’ brand experience across all devices

Read more

RE: Sales and marketing SLAs, often the choke point isn't the teams but them getting the data into the tools they want to use with the da...

Ed Fry

Why sales and marketing alignment is more important than ever

Read more

Thank you for the good and very helpful information. It is very interesting. I love all the things you share and see your beautiful creat...

รัตนาวดี ภูมิวรรณ

Former eHarmony marketing chief joins telco startup

Read more

Colin Kaepernick, not Mike Kapernick.

thisisw

Zenith's innovation leader: Mid-digital age not benefitting media, brands or consumers

Read more

Latest Podcast

More podcasts

Sign in