When a system fails, consumers and the people they need to run them, we all lose.
First draft, part 1 of about 12
**Written for my counterparts who consider themselves Independent Agents and Insurance Brokers***
So I regularly read a publication called Rough Notes. Kind of interesting, some value each month. They do a pretty neat thing each month, they publish a brief article from a much older issue. The one that caught my attention was titled “Producing New Business to Balance Cancellations” It’s a topic that I have been working on for over three years. Fascinating one to me and actually I have my own soluton. More on that later.
With several hundred companies offering auto and home insurance in the U.S. you would think a bit more variety would exist. The reality is that the majority of them are after the same demographic; good to great credit, home ownership, college educated, multiple cars. Then there is everybody else. With a constant turn over of actuaries and heads of underwriting everybody else inevitably can get luck and fit into a preferred companies model. Generally due to a fluke in the sophistication of underwriting. But the reality is still that there are only three prices available to the public and YOU choose your price.
DISCLOSURE: I do not advertise. Not in the traditional sense at least. I also never say know to a request from a policyholder/friend/customer for a sponsorship/support of something they are involved in.
So I was at a zoo this weekend. Washington National Zoo to be exact. Great time, great place. While at one exhibit I noticed this sign;
Really neat exhibit and I am fine with seeing State Farm’s name there. I respect them as a company and think this is a great move. Why would you not want your logo in a happy place where lots of families are. Especially since families are a huge piece of your customer base. But then again you see State Farm almost everywhere. They probably have customers in every physical space that they put their name.
An awesome advertising company that happens to sell insurance. Every week of the year your mailbox is likely infiltrated by a mailing from Geico. Not always a letter, sometimes just an insert in something else but they are there. The message is always the same ” How much could you save on your car insurance?” They use that goofy gecko, a pig, a caveman, random “b list” celebrities, etc in order to try and get your attention in a crowded place and they do a really good job at it. This is based on them recently being ranked the #2 car insurer in the United States.
1. We want to be the largest in america…. WHO CARES my guess is your policyholders don’t.
2. We can save you $480 or 15% or an average of … WHO CARES reality is saving that amount of money just means something was wrong.
3. Rates go up due to inflation…MOSTLY CRAP rates go up to keep the bottom line healthy. If people knew how much money was floating around in insurance they would go bonkers
4. Discount double check, in good hands, join the nation, like a good neighbor…SLOGANS are for the company not for you. Sooner the companies put more resources into helping their policyholders and less into marketing the sooner you will see insurance improve.
So in the iconic sales based movie Glengarry Glen Ross the scene emphasizing “Always be closing” stands out as a signature moment;
Although the scene itself(**Some language, not for everyone) is brief the message it portrays covers decades of sales attitude. Good for the rest of us that those decades are over and people much prefer to be buy then be sold.
Then of course there is this;
About all this line, made famous here **some language** Coffee in my world is for OPENING.
A rate $600 higher than the market will bear. Such a shame. I have been told that if an insurance company has a customer with no claims they become profitable within about three years. Based on this it is safe to say a customer of 62 years has earned your company some money, yet you let them go. Kind of like the goofy T.V. or movie scenario where the employee of 30 years gets a cheap watch and a certificate of appreciation.
In your own world be sure that loyalty goes both ways. Loyalty is earned and should not be given. If you vote with your dollars you will likely not have this happen to you.
Just read this by Seth Godin; The Perfect Crime a very similar thing actually occurs in Insurance. Thanks for the idea Seth.
I cannot factually speak on any of the lobbying or NAACP points. Instead here is what I do know.
None of the insurance advertising you see actually shows you how to be a better consumer in the long term. The companies only concern is on switching your insurance this year which, since the cost to acquire customers is high, is pretty stupid. It takes several years to turn a profit on any individual, why would you only advertise for this year? Because you are conditioning the masses.
Are you terrestrial radio? So for 9 years it was me and my xm radio. Now about a year and a half ago I started having an affair with Pandora and it was and continues to be wonderful. So what is a guy to do? Well as fate would have it my receiver stopped working in the car. So now it is me and a binder full of Success magazine cd’s and pandora through my phone.