Insurance is dull, no matter how marketers try to dress it up.
Renewing your annual insurance policy is a grind akin to queuing at the bank, or filling the car up with fuel. The less time you spend doing it the better. Indeed any time you spend doing it is resented.
Yet once a year we are all forced to schlep through a tedious process in order to convince ourselves we’ve saved a few quid on something we resent spending money on in the first place.
The insurers themselves have always known that pretty much all their competitors’ household and motor policies are essentially the same.
And so the obvious way for them to build market share where all product features are identical has always been to compete on price.
Historically, consumers would ask their local insurance broker to sort this for them. More recently they’ve gone to an insurance comparison website (which essentially does the same thing, just online).
And so the battle of the insurance brands has shifted away from insurance companies towards insurance aggregators (to use the industry term).
But as all aggregators’ central propositions revolve around the rational proposition of “saving you time and money”, we’re back to the age-old problem: how do you sell insurance successfully on anything other than price?
Step forward the ad agency VCCP and their client Compare the Market.
What I think VCCP and Compare The Market (CTM) understood from the outset was that if they could turn the insurance policy buying decision from a relatively high-involvement rational one to a much lower-involvement emotional one they could capture market share without needlessly giving away margin.
But how to do this? CTM knew their price comparison site couldn’t reasonably claim to save more time or money than other price comparison sites. Ultimately they’re all brokering policies from the same panels of underwriters.
VCCP’s solution for CTM was to create “cuddly” brand characters with the scantest connection to the product (“Compare the Meerkat”? Really?) and in so doing they deliberately shifted the essence of the campaign from ‘rational reason-to-believe’ to ‘emotional reason-to-purchase’.
They did this in the knowledge that once you get a consumer emotionally involved with your brand it can give you a distinctive market position that is difficult for the competition to counter. Which is why so much of CTMs marketing communications has very little to do with insurance – the Coronation Street idents being a case in point – and far more to do with driving emotional engagement with the CTM brand.
However I suspect the true genius of the campaign was actually the decision to give away free CompareTheMarket-branded cuddly meerkats to customers who bought policies.
Because the other aggregators in the market had a generic proposition, the branded meercat giveaway gave CTM the fractional advantage it needed to take market share without conceding margin.
Indeed I suspect a fair proportion of CTM’s policy purchases are actually down to kids’ pester power. If a parent is forced to renew their insurance annually, for relatively undiscerning customers the comparison site that gives your kids a free toy on top of the insurance wins the business.
Sure, other comparison sites can give away freebies too – Confused.com are currently giving away £20 petrol / shopping vouchers with every policy purchased. But I’m guessing that those £20 vouchers probably cost at least twice to source what CTM pays to source the Sleepy Oleg toy they’re currently giving away in the run up to Xmas.
And because the CTM giveaway is directly connected to the brand itself, it isn’t something the competition can easily copy.
Economists will tell you that in a perfectly competitive market, fractional advantage can result in massively disproportionate market share due to the elasticity of demand.
So hats off to VCCP and CompareTheMarket for realising this. They’ve created a market-leading insurance brand through the genius of building an emotional connection with something as unemotional as insurance.
And they’ve actually been able to leverage kids’ pester-power to sell home and motor insurance, which must be a first.
Absolutely brilliant thinking. (I shall avoid the temptation to call it ‘simples’).