CAR INSURANCE: Learn how some companies successfully market car insurance ...

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A serious man driving in a parking lot looks at his phone. He glances back up to the camera.

“I'm a teenage girl. My BFF just texted me that she kissed Johnny. That's a problem, because I like Johnny. Now, I'm emotionally compromised.”

CAR INSURANCE

The man slams into a parked car before driving off. “OMG. Becky's not even hot,” the grown man exclaims, barely acknowledging the accident.

The lesson here? Buy Allstate Insurance to better protect yourself from “mayhem” like teenage drivers (even those played on television by grown men). Auto insurance companies constantly compete with each other to create the most over-the-top and unexpected commercials. Even while discussing serious topics like car accidents, car insurance companies must engage their audiences in new and novel ways to distinguish themselves from the competition.

Since the need for car insurance is a serious matter, it’s a wonder that many of the commercials are designed to be humorous and silly. However, there’s a psychology behind the humor and shocking ads. Companies that offer services like car insurance must have strong branding campaigns that stick in the minds of consumers.

Branding concepts and methods are ingrained in an understanding of consumer psychology. By understanding what really captures the minds (and wallets) of their consumers, car insurance companies improve customer retention rates and pull in new business through effective marketing techniques.

 

Selling car insurance is different from selling physical goods. Most people don’t shop for car insurance on a regular basis, which means they aren't knowledgeable about the qualities of the services available. Even still, many of the services insurance companies offer are very similar to each other, meaning companies must distinguish themselves through creative advertising campaigns

Most customers deciding to shop for car insurance start by exploring the short list of brand names they've stored in their memory. According to marketing information services firm J.D. Power and associates, the average shopper can only recall four brand names off the top of his or her head. Companies who wish to be on this list must engage in memorable, effective branding strategies, which is why so many of their commercials present multiple outrageous situations to a viewer.

 

The main three tactics used to grab attention are:

  • Humor
  • Fear
  • Saving Money

In the past, humor has provided an excellent way for auto insurance companies to remain in the minds of consumers. Geico has effectively used humor as a way to connect with customers and become a household name. Using a “gecko” in the commercials allowed Geico to build a brand identity with name recognition, since Geico is similar to gecko. The witty and whimsical approach continued with the “so easy a caveman can do it” commercials, that proved to be successful and became a short-lived sitcom.

According to a study conducted by Zhang and Zinkhan at the University of Houston about humor in television advertising, “humor increases ad information recall and positively affects brand attitude.” The cheerful approach works because the comedic aspect is appealing to people. Consumers are bombarded with advertisements and other information on a constant basis, and a campaign that is funny will linger in their minds. This is especially important for companies who provide a service where consumers can’t directly compare physical goods.

 

However, other companies like Liberty Mutual seem to find success with a more serious approach. Ace Metrix, a television analytics company, deemed them the “Most Effective Auto Insurer of 2001” based on their recent campaign promoting no texting while driving. Liberty Mutual's initiative shows that even serious car insurance ads can be effective if they deliver a relevant message to a wide audience.

Liberty Mutual also capitalizes on the fears of consumers and auto accidents. Commercials that include an exploding car or a woman saving a man from walking into oncoming traffic exploit people’s fears of accidents. They make consumers want to be protected and prepared in case of emergency.

Other companies like Progressive play on people’s need for saving money. Their advertisements feature “Flo,” a friendly Progressive worker who somewhat humorously shows customers how to save money by switching to Progressive insurance. Advertisements such as these make people feel empowered to choose what they want in a service, while saving money at the same time.

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