Amidst jittery financial markets and government bailouts, the average Joe is still facing tough economic times and looking for ways to save money. In continuing with the discussion initiated in my post “May you live in interesting times”, we are looking for the companies that are building on the opportunities presented by the economic crisis to attract savings-conscious customers.
a) In a time when most of its competitors have retrenched in their marketing efforts, Progressive has boldly followed the opposite trend - it has aggressively stepped up its advertising activity to a point where, right now, it is perhaps the most visible insurance company out there. This is a very positive move. In hard times, most companies tend to cut back in marketing spend, which is an easy target because it is mostly variable by nature. Yet, although sometimes unavoidable, it is the wrong thing to do. When the going gets tough, the tough get going. It actually is in tough times that a company needs to redouble its efforts to gain new consumers and retain the ones they already have, because it is exactly in these type of conditions that consumers re-assess their own expenditure and start looking around for better options. For most consumers, insurance is low-hanging fruit, and one of the first expenses to be questioned.
b) Intensifying advertising presence is just half of the effort. In order to be effective, a good campaign needs to be in place. And it is here where I think Progressive shines. Progressive’s new advertising campaign is warm, colloquial and does a great job humanizing what is otherwise perceived as the dreadful process of shopping for insurance. It makes the concept of shopping car insurance look simple and friendly for consumers, by equating it with the retail shopping experience they are very familiar with. By doing that, Progressive effectively addresses and neutralizes the anxiety that shopping for a highly technical financial product creates among consumers. The different spots address each of the issues related to the shopping process. It reassures consumers that it is OK to shop around, that they can customize their protection as they need it, that Progressive is a one-stop solution for all their vehicle insurance needs, and finally, that they can save money.
c) Shopping for car insurance can be particularly stressful because, as a technical product, it is usually time-consuming and confusing. A lot of data needs to be provided to each company you consider, and at the end, it is always hard to understand what the different companies are quoting for. Therefore, comparisons are complicated. In addition, consumers never have the time to go over the dozens of potential alternatives, so the process is always laden with cognitive dissonance that leads to the very uncomfortable feeling that they ultimately might not have made the right choice. Also known as buyer’s remorse, this emotion is so uncomfortable that, unconsciously, most consumers would rather put off making a change than enduring the anxiety. This is the third successful element in Progressive’s strategy - providing quotes for not only its own policy, but that of its competitors too. Although this might seem risky - a competitor’s quote might actually be lower than Progressive’s - it is actually a brilliant move. Progressive’s best chance to get a new customer is by triggering the shopping process. And in order to do that, it needs to make it look simple and reduce the anxiety it creates in the consumer. In addition, by providing this service, Progressive ensures that its website will be the first stop the consumer will make when he/she starts shopping. Having the first shot at the client further increases the chances of gaining his/her business.
Progressive’s insightful and bold marketing approach should ultimately pay off in terms of new customers and a more robust policy portfolio. The stock price has been beaten down along with the rest of the financial sector, and sat at $17.55 last Friday. But the company is doing what is required to emerge stronger from these difficult times. Taking advantage of the opportunity provided by the crisis; now, that’s progressive!