Insurance branding to create preference

The purpose of insurance branding.

Any process of insurance branding includes questions about creating preference. How do we gain preference for our products when, basically, they are identical to that of the competition? How can we convince target audiences to buy insurance when, if I’m being honest with myself, they don’t really want insurance? How can I assure our message is getting through when we go through a middleman, such as a broker or an independent agent, to sell it?

The insurance industry is one of the most heavily regulated of all, right there next to pharmaceuticals. It must respond to changing laws, reimbursement issues, market forces and, especially, health care requirements.

Insurance brandingIts other hurdles, however, are not that unique to its industry. Most markets are mature ones, meaning that products and offerings are similar, and true innovation is rare. Most of the products consumers buy they don’t really need (c’mon, who really needs an iPad?). And most brands don’t sell directly, meaning they depend on a retailer or distributor for sales.

Does that mean the answers to those questions posted above are the same for any industry? Yes and no.

Facing the belief about insurance branding

The reason they are not all the same is that insurance brands have an image problem few have. They are seen as a scam. We’ve done research for various insurance companies and respondents are very wary of insurance companies that make promises on which they don’t deliver. Any number of the general public can tell you a dreadful story about filing a claim and having to hire an attorney to goad the company into complying.

You could retort that all industries have failures and breakdowns, but the anger is stronger with insurance brands because the issues seem to be embedded into the process itself.

You pay your premiums without filing a claim for years, then you are denied when you actually do file. As it’s said in a Liberty Mutual commercial, “Why have insurance when you have to pay more to use it?”

In some ways, this anger is similar to what consumers felt about banks. In the face of the 2008 recession, anger at banks was at an all-time high.

Why do so few take action?

But few financial institutions, such as credit unions, aligned themselves with that anger to steal market share. Our studies showed that about 15% of customers seriously consider switching banks at any given time, but few actually do it because switching seems complicated and no one has a message that gets them over that hurdle.

In the insurance industry, switching is certainly one of the end games of insurance branding. But another is adding to the policies you already have with that customer. In that situation, customers are usually reluctant to add policies because of the negative feelings they have about insurance companies.

The Liberty Mutual ad campaign has been successful largely because of the belief among consumers that insurance companies scheme their way to take your money. It works as a message, but it would be more effective if the emotional pain of that the audience was embedded in the Liberty Mutual brand. Then Liberty Mutual could be preferred, rather than just considered.

hamster wheelSure, Liberty Mutual says “Liberty stands with you,” but that’s just marketing garble and identical to “Nationwide is on your side.” (We liked the question it asked years ago, “What’s your policy?”) To really make an impact, and provide preference, its theme should not be so forgettable and easily overlooked. It should hit the heart of how prospective customers feel and how they should see themselves in the Liberty Mutual brand.

Brand answers the questions

Therein lines the answer to all the hurdles discussed. Your products are basically the same as those of your competitors? They will become more important to target audiences if they are given emotional reasons why they exist beyond the tired of messaging of protection against the future. How to open up more policies for customers? If the brand fulfills an emotional promise, then those customers will be more open to listen to you.

That’s what insurance branding should do.

Want better control of the message? Then have a brand message that is unique because most agents, according to our research, are bored stiff repeating the same message over and over, regardless of carrier. That is why most of them compete on price. They have nothing else to say.

Let’s consider Liberty Mutual’s “Liberty stands with you” theme one more time to get at the root of the insurance industry’s problem. Intellectually, you might think that theme would be the answer. Here’s the problem. Like most insurance companies, Liberty Mutual truly doesn’t understand the power of brand.

The brand theme here is about Liberty Mutual, not about the prospective customer. Nike’s “Just Do It” and Apple’s “Think Different” are powerful because they are about target audience, not the company.

If there’s a larger problem in insurance branding than what we’ve listed before, this is it. Insurance brands spend millions of dollars in advertising to sell a message that simply will not resonate. That is insanity.