Fresh off its IPO, Lemonade adds Pet Insurance — it's all part of the plan
How to make insurance sexy... Call it "Lemonade" (in Millennial cursive), throw it in an app, and add pink buttons everywhere. Digital insurance startup Lemonade refers to itself as a "cocktail of delightful experience." Its stock jumped 139% on its IPO day this month and has barely budged since. Now it's launching Pet Insurance: the sweet new vertical will complement its core renters/homeowners insurance.
- Lemonade data revealed: 70% of Lemonade customers have pets, but less than 2% have pet insurance. That's not a good feline for the 68% un-insured dogs and kitties.
- Non-Lemonade data revealed: Americans spent over $75B on pets in 2019, and puppy love has only accelerated in the corona-conomy. Chewy sales soared 46% last quarter on extra pet pampering and adoptions.
The art of the cross/up-sell... Lemonade is pricing its pet insurance at $12/month. But existing customers who bundle it with their home/renters policies get a 10% discount.
- Cross-sell: Lemonade is trying to juice more out of its customers by throwing in this extra offering it knows they'll want.
- Upsell: Lemonade can also lure in new customers with its affordable pet insurance, then upsell them its pricier core home insurance.
Lemonade needs to increase your Lifetime Value... if it wants to become profitable. 90% of its customers are 1st-time insurance buyers. Page 131 of Lemonade's S-1 reveals its simple master strategy to gradually increase their monthly payments: expand to new products. Lemonade gets you with renters insurance at 25, bumps you to pricier condo insurance at 30, then will add on Auto, Life, and Umbrella insurance by your 50th b'day. Growing with customers now means Lemonade needs to launch new products ASAP.