Marketing Strides – getting ON TOP

Surrounded by the rugged beauty of Colorado — with mountains still capped with snow — you would have thought that concerns like marketshare and “top-of-mind awareness” would have drifted away on the sage-scented breeze.

But, dutifully packing meeting rooms, conference-goers gave their brains a workout in a dozen information-packed sessions before getting physical through white-water rafting, mountain biking or trail-riding. In fact, from the time IMCA president Meg Studer and Meeting Chair Glenna Maynard kicked off the three-day event, delegates barely had time to catch their breath. Which was tough enough given the Keystone Resort’s altitude of nearly 10,000 feet.

Attendees were treated to a heavy-hitter line-up of keynote speakers, including Dr. Tony Alessandra, a marketing strategist of behavioral science and a best-selling author, and Peter McLaughlin, of Denver’s FitnessAge Company, who dipped into his book, Catchfire, to share strategies for staying energized and focused in the midst of tough problems and heavy workloads.

Canada’s own Warren Evans of the Toronto-based Service Excellence Group more than held his own with his unique mix of irreverent humor and compelling insight. Acknowledging the frenetic pace of change most business professionals are reeling under, he also pointed out that much of the economy (now dominated by services) is being guided using “outmoded paradigms.”

“Both the travel and movie businesses are now bigger than auto-making and auto parts. But we’re all still watching the Dow Jones Industrial Index,” he exclaimed. “And the price of computer memory should now have more bearing on things than the price of crude oil. But it’s the latter that still commands more of the attention of North American politicians and many business leaders,” Evans observes.

E-commerce beckons

Most insurance companies, especially property and casualty insurance brokers, are still not catching up to the huge paradigm shifts occurring in financial services as a whole, says Tim Highham, vice president of insurance services with Homecom Communications Inc. Highham is a well-regarded expert in electronic commerce and Internet delivery systems. Noting that investment house Charles Schwab saw 61% of its 1998 fourth-quarter trades conducted on-line without a broker and that on-line auto insurance sales in the U.S. are predicted to increase from $21 million in 1998 to $850 million by 2000, he adds that insurers who still view (and fund) their Internet activities as “an after-thought” way down on the list of sales distribution channels are in for a rude awakening. And that well-heeled, asset–rich demographic segment that’s becoming increasingly attractive to top personal lines insurers are becoming more and more comfortable with “buying off the net,” he insists. “Consumers are learning very fast about the real value of the middleman. If you aren’t adding value, as a traditional distribution insurer, agent or broker, and customers are finding attractive discounts on-line…with no apparent downside, you’re in trouble.”

At the same time, technology-smart brokers who realize their role has changed to one of insurance consultant can benefit from helping customers make informed decisions about their insurance because of the perception that it’s still a relatively complex product. “So, to an extent, sure, insurance is still a relationship-based business and you can leverage that. You just have to realize that consumers want 24-hour service too. So your web presence is just as important,” Highham comments.

He adds that, with technology helping to boost insurance per-support-staff productivity 68% between 1985 and 1995, broker-based companies can no longer ignore the reluctance of some producers to expand their use of technology. “It all comes down to cost … reducing cost … and the impact that has on pricing, competitiveness and profitability — you can’t ignore that.”

Branding a brand

Zurich Kemper’s senior vice president of corporate development, Ned Loughridge, segued neatly from Highham’s e-commerce session to a panel discussion on branding by observing that, “if the Internet is seen as a vast, unfamiliar desert, a known brand can be an oasis for consumers”. And, electronic communication is a lynchpin in Zurich Kemper’s worldwide financial services branding strategy, Loughridge says. With 60 business units broken down into 300 strategic business units, the company is striving to focus on specific key markets. “At the moment, we’re a conglomeration. But we’re playing with a model that will lead us to becoming…and becoming known as a total financial solutions provider to our customers. In our life business especially, we see the Internet as playing a huge role in that, as much as any TV and print communication we’re doing. And probably more so in the future.”

Noting that some insurers are using branding to reduce “channel conflict” — by marketing direct under one brand and through brokers under another — he explained that his company has resolved to build on the single Zurich brand, managing sub-brands only in distinct markets where they are already strong.

Another panelist, Country Companies’ Randy Lorimer, said that the growth of electronic media prompted his team to “go back to the drawing board on everything we do in marketing communications when it comes to building brand”.

“It was a difficult lesson. A lot of us approached the net originally as just another communications medium. First, it took us awhile to realize that you’re not in control like you are with print, TV and so on…it’s so easy for people to move around. And we were missing the whole alternative-channel point,” he comments.

As a multi-line personal lines company with about 1,400 captive agents in ten states, his company also ignored the growth potential offered by the Internet. “Outside our markets, we’re `Country Who?’. So the net offers a company like us tremendous opportunities to build brand awareness. It levels that playing field for smaller companies.”

However, Lorimer warns, if insurers manage their brand presence on the web poorly, and doing things cheaply, offering features that don’t work or information that isn’t accurate or is plainly self-serving (as in TV ads) to an audience that’s looking for something different, “it can make us look stupider than we ever have,” he states.

Continued on page 46.