Dollars well spent!?!

In a recently released report from consulting group McKinsey, they claim that over the past 10 years, the marketing spend by U.S. personal-lines insurers rose from $1.7 billion to $5.9 billion in 2011. (1)

“The auto insurance industry in the United States is one of the most aggressive in terms of marketing spend, but it may not be having the desired impact,” (2)

The problem is that these investments ware only targeting a small portion of the target market, about 30%.  This is also troubling because, this segment is historically the most price sensitive and the least loyal.  “…some carriers are spending heavily for broad brand recognition and have little to show for it."  The report suggest that more than half of the marketing dollars spent on auto insurance in the past decade came from carriers that didn’t gain share.

Does anyone benefit from all this spending???  The McKinsey report, indicates that only largest companies are actually creating value.  The 5 largest insurers in the US are recognizable to consumers and these brands maintain a high degree of depth.  This is an obvious advantage for the larger insurers when consumers decide to shop for insurance. These brands are sought after.

So how can a smaller insure compete?  The report suggest that smaller insurance companies avoid competing with large marketing budgets and focus their efforts on selective positioning opportunities. 

“We strongly believe that there are other needs out in the marketplace that are not being addressed and that is a bigger opportunity for insurers,” (1) 

Insurance branding... Lipstick on a pig?

"If you apply (brand strategy) to all situations, whether it's business decisions or marketing, and make all decisions based on brand, your message will come out consistent." Of course, that would mean having corporate policy that's transparent and authentic--something that's in short supply in financial services. The irony, of course, is that the insurer/client relationship is all about trust, "but they refuse to make it part of the brand because they themselves don't believe it," Laura Mazzuca Toops, quoting brand strategist Tony Wessling

In Laura's January 16th article "Toops Scoops: The Big Disconnect:  Allstate and AIG's latest advertising snafus raise the question: Does insurance understand--or care--about the disconnect between what they do and what they say?" PropertyCasualty360.com, she uses a couple of recent ironic example of instances when American insurers' action and ads do not support their own brand promises.

"Allstate commercial just happened to feature a real-life New Jersey couple that is very displeased with Allstate’s $10,000 settlement offering for their home, which was totaled by Sandy."

"AIG's announcement that they might sue the federal government because they’re not happy with the terms of the bailout they were handed"

Laura uses Wessling's comments to highlight the lack of a complete brand strategy and the industries misunderstanding of social media.  Through Wessling's comments she blames senior management for neglecting brand, instead focusing only on "the numbers... even though brand awareness will ultimately drive more profits to the bottom line"

"If these companies aren't at all conscious about the way their message is coming out in such an offensive way, it's because they don’t have a comprehensive brand strategy...  If you apply (brand strategy) to all situations, whether it's business decisions or marketing, and make all decisions based on brand, your message will come out consistent." - Wessling

Responsibility – What’s your policy?

Liberty Mutual was established in 1912 and today the company is the 2nd largest property & casualty insurer in the United States. 

For a number of years the company has operated with a large portfolio of brands.  Within the United States, Liberty previously maintained 8 distinct regional companies which all but with 1 exception, used the Statue of Liberty logo.  These brands are all displayed below.  Earlier in the year the organization made the decision to consolidate these regional brands into the single parent brand.  

"Liberty Mutual Insurance has decided to go all Liberty Mutual, all the time.  The insurer is retiring the brand names of eight regional commercial lines insurers in order to use the Liberty Mutual brand exclusively in all markets."

The company indicated that “The decision was influenced by our agents’ desire to align their businesses with the stronger, more recognizable Liberty Mutual brand,".  Considering the similar logos, this is an oblivious transition and the new consistency should help increase awareness and allow the regional brands to benefit from the existing recognition of the parent company's strong brand and national marketing efforts.

In comparison to some of the marketing campaigns previous discussed in this journal, Liberty's recent advertisements are similar in their attempt to use humor to entertain and gain brand awareness however, in contrast the companies marketing appears to focus the messaging around product features and there is no mention of the cost or any potential price savings.  It's not a big difference but it must be working...

Consumers ranked Liberty Mutual as the top TV Brand Advertiser of 2012 for the insurance category - Ace Matrix

Progressively promoting a brand internally

The Progressive Casualty Insurance Company was established in 1937 as one of the first drive-in claims offices in America.  The firm prides itself on living up to the very definition of their name “progressive” priding itself on innovation through their online shopping experience and unique products/services.  The organization is also well know for their advertising campaign involving Flo, Progressive's “helpful”, “lovable” and “witty” cashier: Flo.

 

I was originally research the company’s advertising campaigns in an effort to review points of parity/differentiation when I stumbled across an interesting video posted on Progressive’s youtube channel.  The follow 2 minute video was designed as a recruitment tool and although it displays several images of employees and work spaces, the messaging sounds similar to a commercial as it highlights innovative insurance products/services.  There is little verbiage related to the actual employee experience.  In the comments below the video is a link to the company’s carrer webpage.  In my opinion this video has an external focus however, it highlights an important branding concept.  As equally important as positioning a brand in the minds of consumers, a brands must also diligently be aware of positioning the brand internally.  All employees should have a strong understanding of the brand and the company's values.  Companies also need to engage and connect with employees regularly.  Branding is not only critical for attracting external customers.  It is also a key factor in attracting, retaining, and motivating employees.  Progressive promotes the brand internally by describing the corporate culture: based on the “golden rule” (treating others the way you want to be treated), and the organization also promotes and “celebrates” employee differences.  “At Progressive, we celebrate the person you are, the ideas you bring, and the energy you invest.” This are powerful messages that surely helped the organization promote the brand within the organization.

Insurance Ambassadors or Celebrity Coattails?

Celebrities are continuously added and dropped depending on their performance and reputations.  Aligning a brand with a celebrity allow consumers to create an association of the brand with a recognizable personality.  In some cases the celebrity status of the individual is simply used to raise the profile of the brand.  In other cases, the celebrity provide the brand with creditability.  In either case, brands use ambassadors to influence consumer perception of the brand's own "personality".

There are several celebrity endorsement for insurers.  One of the most successful is the use of actor Dennis Haysbert.  Dennis is know for his roles in the Major League films, the movie Heat, and for playing the President in the series 24.  He became Allstate’s spokesman in 2003, using the tagline "That’s Allstate’s stand” and Haysbert has appeared in over 30 commercials since. (1)  The following ad was filmed in 2004.  :

A second example of a high profile and successful celebrity endorsement is Sate Farms use of Green Bay Packers’ quarterback, Aaron Rogers.  Rodgers has become known for his unique touchdown celebration.  This celebration move is know as the "Championship Belt", and Aaron can be seen making this gesture after scoring.  The celebration involves motioning that he is putting an invisible belt on around his waist. (2) State Farm used this well known gesture and renaming it to support the company’s efforts to save consumers money (saving money...  An apparent reoccurring theme in insurance marketing). The “Discount Double Check” is featured in many of State Farm’s recent advertisements.  The concept is simple, an agent reviews your policy to make sure you are not missing any discounts.(3)

Again, the State Farm ads blend, humour, celebrity endorsement, and savings in a effort to persuade customers to seek State Farm insurance products.  Allstate has a slightly different approach by attempting to support it’s brand promise through their slogan “You’re in good hands”.  I guess this mean that not all insurer marketing is mascots, celebrities and premium savings…

Are there any other example of this in the marketplace?

If insurers are not using price, what other marketing strategies are being used?

A Canadian example, eh

Belair Direct is a very similar insurer to Geico.  Both companies are direct writers, meaning they distribute their insurance products directly to consumer without an intermediary such as an insurance agent or broker.  As you can see in the example below, taking from Belairdirect’s website, the company uses both an animated mascot (Knight) and entices consumer with cost saving of “over $500”.  The company is also currently running a television advertising campaign in Ontario and Quebec (the only 2 provinces the company operates).  Unfortunately, this media is only available in french. however, the humour is still obvious.  There are some clear similarities between Geico’s campaigns and the much smaller, less known, Belairdirect.  

Is this Canadian company taking a queue from a much larger American brand? 

Is a mascot, some humour, and cost savings the only way to market insurance?

15 Minutes

A 2012 survey that tracked the most widely recognized car insurance brands in Canada revealed that, despite not selling insurance in the country, Geico had the highest level of brand awareness by Canadian consumers.(1)  This is largely in part to the firm’s highly active television advertising campaign.  The “15 minutes could save you 15% or more on your car insurance” campaign is well known in America and, as a result of watching American television programming, Canadian has been exposed to Geico’s marketing.  This “15 minutes” campaign is also an interesting example of how to incorporate a brand promise into, what has become, a highly successful, and recognizable slogan for the company.

Geico’s televisions campaigns are well documented (2) and have a resonance with consumer due to the highly humourous approach.  Regular television viewers will know the Geico well, and may also remember Geico’s cavemen campaign: “It’s so easy to use, Geico.com, a caveman could do it.”

More recelty, Geico has incorporated professional sports and celebrities into their advertisements.  Gecio is a sponsor of the NHL (another reason hockey watching Canadian are aware of the brand) and a recent campaign asking “How happy are folks who save hundreds of dollars switching to Geico?” featuring retired NBA all-star and notorious shot-blocker Dikembe Mutombo.

Oddly enough, despite the high level of brand recognition that Geico now maintains, the underlying the company’s slogan continues to promote cost savings.  Original, in the early days of the brand, this slogan was used to entice consumer to seek Geico to save money.  A successful brand is typically able achieve higher margins and is able to avoid pricing competition however, despite Geico’s high awareness, the company continues to use a slogan, promising savings.

This discussion asks us to follow these themes into several other areas:

If Geico’s call to action is savings and;

Geico uses both mascots, and celebrities to promote the brand…

Do other North American insurers use this similar strategy?  If not, what are they doing differently?