Progressive Insurance: Multivariable Testing

8 Pages Posted: 16 Jun 2009

See all articles by Phillip E. Pfeifer

Phillip E. Pfeifer

University of Virginia - Darden School of Business


This case describes a 21-factor, 56-recipe multivariable test (MVT) conducted by Progressive Insurance with the help of QualPro, a leading MVT consulting firm. The object of the test was to improve Progressive's direct-mail retention campaign. The results of the test are available in a spreadsheet (UVA-M-0762X) for students to analyze.




After six months of careful planning and three months conducting a 21-factor, 56-recipe multivariable test (MVT) involving almost 60,000 policyholders in Florida, Pennsylvania, and Colorado, the self-named retention team at Progressive Insurance was finally ready to look at the results. The initial summary results were promising. The best “recipe” achieved a renewal rate of 74.4%, and the worst achieved only 67.4%. Clearly, the team had identified some things that made a difference. The gap of 7.0 percentage points had multimillion-dollar profit implications for the firm. All that remained was to examine the data a little more closely to see which factors mattered and which did not.

Identifying the Factors

Using a series of brainstorming sessions with various subgroups from across the company, the eight-member retention team had identified 479 possible experimental factors. Each of these factors provided an idea for improving first-term renewal retention. As is the case in most direct-marketing situations, first-term renewal was crucial to the financial success of the firm. Because customers were so expensive to acquire, it was important to keep them. The key to keeping them was to get the customers to renew at the end of their first term. If they did so, most were likely to renew for several subsequent terms.

The brainstorming sessions were organized and led by team leaders Scott Ziegler and Chris Olie. “They were actually a lot of fun,” said Ziegler, a 1988 graduate of the University of Virginia's Darden School of Business. He continued:

. . .

Keywords: MVT, Multivariable testing, direct mail, multiple variable testing

Suggested Citation

Pfeifer, Phillip E., Progressive Insurance: Multivariable Testing. Darden Case No. UVA-M-0762, Available at SSRN:

Phillip E. Pfeifer (Contact Author)

University of Virginia - Darden School of Business ( email )

P.O. Box 6550
Charlottesville, VA 22906-6550
United States
434-924-4803 (Phone)


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