OLD DOGS LEARNING NEW TRICKS

Taco Bell’s Chihuahua campaign, launched in late 1997, has become the pre-eminent brand recognition success of the late 1990s. The ad spots, featuring a talking Mexican dog whose only desire is to pursue Taco Bell food, has resulted in a North American-wide phenomenon which has seen restaurant sales increase since the campaign’s incarnation, not to mention a wide array of licensed products featuring the dog’s image. The success has demonstrated to North American business that branding — linking consumer consciousness to a corporate image or promise — works. Clearly, direct writers have long been in possession of this knowledge. In a relatively small amount of time, direct writers have amassed a marketshare comprising one-third of total automobile premiums in Canada, much of this businessthrough an onslaught of advertising focusing on price. Broker-friendly insurers have begun to take notice, and under great pressure to combat the direct writers, the debate is heating up within industry ranks whether or not to refocus advertising and branding efforts away from the broker and instead towards the end-consumer.

In a March 1998 poll conducted by USA Today, Taco Bell’s newly unleashed Chihuahua campaign — in which a bilingual Mexican dog expresses his love of Taco Bell — received one of the highest scores ever as measured by Ad Track, the newspaper’s poll measuring the popularity and effectiveness of national ads. A year and a half later, Dinky, the Taco Bell Chihuahua, has joined Bart Simpson, South Park and a small handful of cultural icons whose action figures, t-shirts and other licensed (and unlicensed) merchandise are sold everywhere in North America. The campaign, then and now, has been an enormous success. Ad Track figures found 47% of consumer liked the ad a lot and only 8% disliked the spots. At the bottom line level, Taco Bell parent Tricon Global Restaurants Inc., has recently reported a third quarter 1999 profit boost of 21%.

The campaign is by no means the greatest branding success story in advertising history. Credit card companies such as VISA and American Express, not to mention Taco Bell competitors such as McDonald’s and Burger King have already successfully built corporate brands and have over the years linked consumer consciousness to their logos at once eliciting a concept of what that brand represents. But unlike these blue chip corporations, which have spent decades creating this relationship, the Taco Bell Chihuahua — now fully associated by consumers across the continent to the fast food chain — hit its stride and grabbed consumer awareness in a remarkably short time frame.

Some of the players in the insurance industry hope to mirror Taco Bell’s accomplishment. Broker-supporting insurers, faced with competition from direct writers who are utilizing brand marketing and bank-owned underwriters whose brands are already a part of consumer parlance, should take heed of Taco Bell’s success in order to capture the consciousness of Canadian consumers, corporate branding consultants insist. Sure enough, some insurers are taking the reins and defining their own meaning for the oft-used term branding — and in the process sparking an age-old debate among the industry whether or not to market their services to the end-consumer.

The branding debate

To brand or not to brand is the question on the minds of broker-chain insurers, as an explosion of marketing conferences focusing on the subject have mushroomed across the nation. The catalyst for this recent industry focus could possibly have been Royal & SunAlliance General Insurance Company of Canada, who seemingly broker insurer ranks this year, focusing a series of television advertisements directly on the consumer. The ads support the broker distribution channel, ending with a 1-800 number, which connects consumers to the nearest Royal & SunAlliance broker. Still, marketing so prominently to the end-consumer has created a chasm in the industry between those that believe in branding efforts directed towards brokers and those that believe in focusing their branding dollars on the consumer.

Going the route of consumer-directed advertisement just made sense for Royal & SunAlliance, according to Anne Cochrane, the company’s head of communications. “If you wanted to boil it down, the advertising campaign is to help our network of brokers sell their products and services. Banks and direct writers have decades of brand marketing savvy behind them and they invest big in advertising. Our concern was we were going to become a no-name brand.”

Despite being centuries old as a corporate entity, Royal & SunAlliance does not have real exposure at the consumer level, Cochrane explains, so the ads have been designed to create a company profile. “We want to build a comfort level among consumers and give them recognition of our name and what we stand for. We also think it’ll help our brokers market our services better.” At a recent communications conference, Cochrane adds, it was estimated the value of VISA’s brand equity is $20 billion. “Like other companies who have successfully branded to the consumer, we are looking to leverage our brand value to its maximum potential.”

On the other side of the debate is CGU Group Canada Ltd., which has decided against marketing to the end-consumer and focuses all of its marketing efforts at the broker level. At a recent meeting of The Insurance Communicator’s Association (TICA) in Toronto, Mark Webb, CGU chief operating officer, says his company has forgone marketing to the end-consumer. “When talking about consumer branding, an insurer has to ask himself ‘what did that initiative get me?’ My guess is, not a lot. The big splash approach that some traditional broker companies are spending on consumer brand awareness is not necessarily providing the payback to the company or its shareholders,” Webb maintains.

CGU head of communications Diane Scott notes the company produced consumer-directed ad spots in 1997, but the program was shelved because of an inability to gauge its success. “The problem obviously, as a 100% broker company, is the measurement of the effectiveness of something like that. To be honest, we have found that focusing on the strength of the relationship with brokers is going to be a more effective way to brand.” Scott concedes that an array of mergers that has seen CGU built from three different top insurers, could be one reason for its continued focus on branding to the broker.

In the middle

There is a third angle to this debate, comprised of insurers who choose to focus on both the consumer and the broker. The Chubb Insurance Company of Canada has spurned opportunities to create television and radio advertising, continuing to focus its advertising dollars directly on the broker. But the company brands its products to consumers, carefully creating the materials associated with its high-end homeowners program, Masterpiece, so that insureds are fully aware of what they are getting and who is underwriting their policy.

Chubb president Jan Tomlinson says the company has carefully branded all literature received by Masterpiece policyholders so that benefits of the product and insurance company are clearly articulated. “If you talk to our insureds, they will say they have the Masterpiece policy, not that they have a homeowners policy. Through highly visible logos on the material as well as clearly worded policies, we’ve been able to create brand recognition with our current consumers. We’re making them know as soon as they sign up with us that they are not insured by a standard generic plan but by the Masterpiece program.”

Tomlinson is not opposed to creating branding direct through advertising, but is concerned about the focus of current television advertising by direct writers. “Much of the business is being marketed on price and consumers are being bombarded by the price equation as opposed to the service equation.” The result of this marketing, Tomlinson insists, is to provide insureds with the notion that insurance is a commodity. She maintains insurers should promote the service benefits of their products over the price benefits.

Consultants say go

No surprise, corporate branding and marketing consultants believe insurance companies should direct energies towards marketing to the consumer. Whether or not an individual insurance company is ready to take its message to the public depends on the company.

Brad VanAuken, president of consultant Brand Forward, says insurers can benefits by spreading their message to consumers, but they have to be ready to follow through on their message. VanAuken’s organization conducted a study of U.S. insurers brand equity and maintains companies must be aware of the two levels of corporate branding — sending the message to consumers while ensuring top to bottom, the company follows through on the message. “From our study, we’ve found that insurance companies need to do both. If you as a company decide to launch a campaign promoting strong claims handling, it is incredibly powerful if you deliver upon it.” Conversely, consumers penalize companies that promise service or price but do not deliver. “Claim one thing, claim it loudly, and claim it first. But deliver,” VanAuken says.

An insurer that cannot meet its promise or cannot live up to its branded identity should repair itself internally before branding its message to the public. VanAuken, who is familiar with the Canadian insurance environment, believes companies should focus branding on the consumer, which in turn will prompt them to request recognized products when dealing with their broker. “If you have a prominent brand, brokers cannot avoid representing you, you are creating a consumer pull.”

Insurers who focus their branding efforts on brokers can lose sight of the true consumer of their service, VanAuken warns. “You have to become an expert about the people you are branding towards. The problem with advertising wholly to brokers is you suddenly become an expert in how to meet the needs of the broker. That’s a different game from defining what the consumer wants. While it can get you the same results, in the long run your eye is off the ball in terms of identifying consumer needs.

“Those companies good at understanding the consumer, are going to get placement through brokers whether they advertise to the brokers or not,” he adds.

Jim Gregory, president of consultants Corporate Branding, says insurance companies beginning to brand directly must define the industry, and by extension the unique message they want to send their consumers. “If all things are equal then price becomes the deciding factor, but if you feel strongly about the organization, the message they are sending, where they are going and their vision of the future, then you are more inclined to work with them.”

The brand must send a message, Gregory says. “Consumers dismiss traditional advertising. Don’t waste that precious 30 seconds on something that is already a given. Talk about what makes you different. Leverage your brand. Find out what is different about your company and build upon it.

VanAuken refers to a poll his company conducted which found that sizeable percentages of insureds have no company preference when purchasing insurance. “This represents a boon for insurers who can identify a core business strength, and hold it up as their corporate message.”

Broker support

For their part, brokers support consumer branding as long as it is produced with support for the broker distribution channel. Jim Ball, president of the Insurance Brokers Association of Canada, says Royal & SunAlliance was asked to add the broker identification program symbol, the bipper, to their advertisement. “They said they wanted to get their campaign going first and it’s not yet the time to add the bipper,” Ball says.

Ball recognizes some inherent dangers to brokers when companies gain greater consumer exposure. “If a broker loses his contract with Royal & SunAlliance and a consumer says he likes Royal and wants to stay with them, that could be a problem.”

Still, Ball and IBAC believe consumer branding brings heavy exposure for the broker channel outweighing some potential drawbacks. “We’re encouraging companies to brand themselves. It’ll raise the profile of the range of products and services that brokers provide. We’d like the carriers to tie the bipper into their campaigns so that there is a greater connection between broker and company advertising.”