In “Lessons from Flo and the Gecko – Part One” we saw how GEICO and Progressive use amusing characters to keep consumers watching their commercials. The enjoyable nature of this constantly changing series of ads transforms them into 30 second comedy skits, a tactic particularly favored by Progressive. These repeat the direct writers’ key message points until they are embedded in consumers’ minds – and no one but the competition gets tired of it.
The power of marketing and advertising
These ads reveal other important facts to insurance executives. One is the importance of marketing and advertising. While marketing departments often have to fight to maintain their budgets, high-quality research shows that advertising really does promote sales. A 10-year study done by Information Resources’ BehaviorScan looked at advertising budgets, media schedules and sales figures in 10 different markets. The results demonstrated, according to marketing professors George and Michael Belch, that “advertising can produce sales growth as long as two years after a campaign ends.” Steady sales increases helped both GEICO and Progressive weather some otherwise stormy times. Flo and the Gecko have certainly done their job in supporting their companies continued growth in a challenging environment.
The importance of liking your agent
Regular ad campaigns have helped Flo and the Gecko become familiar faces to American consumers. This is vitally important. As previously mentioned, research continues to show that familiarity breeds, not contempt, but liking. The more we see Flo and the Gecko (in new and interesting settings), the more we like them and the companies they represent. Is generating positive feelings really that important? Influence expert Dr. Robert Cialdini cites the example of legendary car salesman Joe Girard, who sold an average of 5 cars and trucks every day he worked. Girard sent out thousands of greeting cards every year. Their one consistent message was, “I like you.” Did it work? People actually waited their turn at his dealership to buy a vehicle from him. “Find the salesman you like, plus the price. Put them both together and you get a deal,” he said. Affinity and low prices often form a winning combination.
Flo and the Gecko put likeable faces on otherwise staid insurance companies. And, as Cialdini points out, research shows that ‘All things being equal (or not), we want to do business with people we like.’ One reason for that is revealed in a study by social psychologists Berscheid and Reis. Their research uncovered an “underlying preference for the familiar and safe over the unfamiliar and potentially dangerous.” Thus, prospective insureds feel safer with Progressive and GEICO because they know and like Flo and the Gecko. Could personal contact with agents have a similar effect? Both researchers and Joe Girard would tell you “Yes.”
Flo, for one, also regularly engages in comparative advertising. Like the classic “Pepsi Challenge” commercials, she regularly shows Progressive’s advantages over the bumbling middle-aged insurance executives whose fibs often ignite their “pants on fire.” Is this not a jab at small to midsize carriers whose agents, captive or independent, offer the personal service that direct writers cannot?
For the minority of insureds who are highly price-sensitive, Progressive’s website does provide the advantage of quick cost comparisons. But many insureds are looking for more than just a low price. After all, would you want Flo handling your tough claim?
Progressive and GEICO’s success in turning marketing expenditures into new premium dollars reveals some key takeaways. First, it is vital to market to consumers, even if you’re an insurer who uses independent agents. You don’t need expensive TV advertising; multi-channel marketing campaigns featuring personalized direct mail can work well. But you must do it. Name recognition, even in the agent’s office, is crucial. Marketing communications strategies that capture prospective insureds’ attention, engage them, and creatively repeat salient advantages can make a big difference. Research shows, for example, that relevant one-to-one marketing can make direct mail significantly more effective.
Comparative advertising, if done tastefully, can help insureds see ways that your company’s offerings are even better than those proffered by Progressive and GEICO. It allows insurers with smaller marketing budgets to benefit from their competition’s name recognition.
Finally, personal attention from well-trained, likeable agents cannot be replaced by television personalities and flashy websites. Agents must find ways to get out and meet people. Since buying the wrong policy can leave insureds “alone in the woods,” insurance can feel like a high-risk purchase. Since well-known things feel safe, both companies and agents need to become pleasantly familiar to existing and prospective insureds alike. Whether carriers use television or targeted direct mail, email and customized websites for their campaigns, they must regularly carry them out. Doing so, they can compete effectively with Flo and the Gecko.
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