LifeLock, Inc. is a leading provider of proactive identity theft protection services for consumers and identity risk and credit worthiness assessment for enterprises. Since 2005, LifeLock has been a pioneer in identity protection, leveraging unique data, science and patented technology and providing threat detection, proactive identity alerts, and comprehensive remediation services, the cornerstones of its business.
LifeLock addresses a rapidly increasing need. For the thirteenth consecutive year, identity theft is at the top of the FTC’s list of consumer complaints. And according to the Department of Justice, approximately 16.6 million Americans were victims of identity theft in 2012, sustaining more than $24 billion of economic losses.
Back in 2010, LifeLock was doing very well. With a three year growth rate between 2006 and 2009 of 11,474%, they debuted in the top 10 (8th) on the Inc. 500 ranking of rapidly growing companies the U.S. tieing with Go Daddy Group Inc.’s 2004 8th place debut as the 3 highest debut in the history of Arizona.
LifeLock engaged Flagship and Flagship’s joint venture partner Excelsior Benefits to develop its strategy for entry into the employee benefit market.
Key considerations, opportunities and challenges included:
Consumer Acquisition Cost
LifeLock’s tremendous B2C growth was in large part due to its significant investment in consumer marketing campaigns via television, the internet, celebrity infomercials and affinity affiliations. LifeLock partnerships include Rush Limbaugh, Montel Williams, National Rifle Association, airlines and large banks. The B2C growth was and is significant, but so was and is the capital required to acquire each customer.
In an effort to take pressure off the B2C acquisition cost and to ensure available market across multiple channels, LifeLock chose two key paths.
The first approach included the acquisition of an existing delivery partner technology, affording LifeLock the ability to reduce operating cost while increasing strategic agility in product portfolio development and expansion.
The second approach was channel conditioning and diversification into the B2B employee benefit market. Presumably, the employee benefit market might include employers, health plans, hr/payroll administrators, third party administrators, general agents, brokers, consultants, Medicare Advantage plans and other core/voluntary employee benefit channels.
B2C relationships include both the opportunity to connect directly with the consumer and their families, as well as the challenge of managing billing and payment for each consumer. With billing and payment responsibilities LifeLock experiences many payment challenges, including declined credit cards, expiration dates, overdrawn checking account debits and other similar consumer payment challenges. Although in many cases there was an association or organizational relationship between an affinity partner and the consumer, we believed the retention loyalty and account receivable process would be significantly improved with employee benefit and payroll deduction approaches.
In addition to hypothesized consumer/employee retention and accounts receivable improvements, the high volume payroll deduction and defined contribution
environments allowed for pricing scale and per member per month fees to be financed across bi-weekly employee pay periods.
Flagship and Excelsior catalogued existing administrative and product capabilities, and then worked collaboratively with LifeLock to establish employee benefit “Go-To-Market” (GTM) architecture including engagement aids, marketing campaigns and dialogue materials. Integral to the success of the LifeLock employee benefit platform was product repackaging, pricing structure refinement, distribution channel compensation, eligibility connectivity, billing connectivity, B2B account management development and most importantly, a strong plan and aligned resources for the “sell to”, “sell through” and “pull through”. Jointly we created a two year GTM sales strategy including channel conditioning and sales execution.
In addition to working with LifeLock to build their employee benefit deployment plan, Flagship and Excelsior were asked to staff, manage and execute the sales process, including health plan sales executives, inside sales executives and B2B marketing campaigns. The first step in deployment included the hiring of the sales executives and a prospective customer round table. Flagship and Excelsior hosted a cross-section of employee benefit channel representatives, including health plans, third party administrators, enrollment companies and employee benefit brokers. We pressure-tested our design and deployment strategy with the round table participants, adjusted or revised where needed, then quickly took LifeLock to the B2B market.
Since the initial GTM deployment in 2011, Flagship and Excelsior successfully connected LifeLock with third party administrators, private exchanges, enrollment platforms, payroll/human resource administrators, agents, brokers, consultants and directly with large employers. In addition to the early connectivity successes, we also visited with and vetted LifeLock with several of the largest Medicare Advantage plans. Although the CMS regulations didn’t allow for a bundled LifeLock offering in 2011, new CMS action recently paved the way for value added benefits embedded within the Medicare Advantage core offering.
As of January 2015, LifeLock has added over 100,000 members via their new B2B employee benefit channel, enjoy overall persistency above 87% and in-group persistency at 98%.
The identity theft market continues to gain visibility as data integrity and data theft are amongst the leading headlines, including national breaches at Target, Home Depot, Bank of America, Wellpoint Anthem and many more. We expect the LifeLock employee benefit channel to grow exponentially in the coming years.
(NYSE: LOCK) LifeLock is an American identity theft protection company based in Tempe, Arizona. The company offers the LifeLock identity theft protection system, which is intended to detect fraudulent applications for various credit and non-credit related services