Launching an unknown brand into the UK insurance market
Brand – i:protectinsurance
Product – Short term Income Protection Insurance
Campaign duration – 2008-2011
Metrics – sales grew from 30 per month to an average of 500 per month. Peak month: 1,500
Campaign– beyond the initial PR and steadily improving website design the agreed approach was to invest solely in Moneysupermarket click fees:
1. The underwriter agreed to vary the market price of the product provided its net rates were maintained. This enabled i:protect to calculate that by varying its margin (commission) it could offer highly competitive consumer prices that undercut competitor rates for chosen risk types. Critically this price advantage was achieved by i:protect having highly efficient back office processes that delivered market beating low administration costs.
2. More established brands had a significantly higher expense ratio. It is important to stress, as an entry brand, i:protect was unable to leverage existing business to secure beneficial rates. Through participation in a profit share arrangement i:protect demonstrated from the outset that the scheme would be built on sound rates and in partnership with the underwriter.
3. Because offering this product direct and on-line was considered high risk by established industry thinking, it was essential to offer the underwriter assurances that this scheme would be different. A unique application process was designed to make ‘clean risks’ quick and easy to process with additional questions triggered by adverse answers. This was the key differentiator and represented a significant investment in intellectual property and IT system development. However this cost had to be recovered made more challenging by a selective sales process with 20 percent or more of applicants failing to meet the acceptance criteria. Therefore it was critical to secure a high volume of applications from the outset even though the brand was unknown.
4. A further challenge to the business remained the marketing budget which had to be met out of sales. It did not have the benefit of a large seed fund that a large organisation would typically allocate to a new product launch. However i:protect defined its marketing costs on a lifetime customer value rather than year one revenue.
5. Product design was deliberately focused on customer segments up to age 40, this was based on research into claims statistics combined with life stage analysis. This confirmed the primary market for this type of insurance were young families with a high ratio of monthly outgoings to net income
6. Marketing, including web images, content and tone of voice reflected the sub 40 target market. Pricing was banded favouring the target market.
7. It has been widely established that for marketing insurance products for example, price comparison websites offer an acquisition cost that is circa one third of the cost per sale compared to the traditional marketing mix. Moneysupermarket was chosen as the prime focus of marketing as they had the most credible price comparison offering for this product on the web at that time. Furthermore their comparison tables had embraced age banding which was at the heart of the new i:protect Income Protection product.
8. Following negotiation Moneysupermarket agreed a to charge per lead, i.e. for each customer who clicked through to the i:protect website application process. This enabled i:protect to ensure every applicant went through its own application process. Other comparison websites lacked the ability or willingness to do this, hence Moneysupermarket were the primary recipient of all marketing spending.
9. For any financial services brand to break through it is critical to gain credibility. Moneysupermarket was the largest comparison website at that time by some margin and offered a fledgling brand credibility through association. Equally, with an exclusive deal with a low premium provider Moneysupermarket were able to demonstrate to their customers that they were able to offer some of the hottest rates in the UK for this product. In addition to investment in its own web properties with associated PR etc the i:protect products could be compared against competitors in an independent forum. This generated a significant halo effect for the i:protect brand.
10. Due close monitoring of performance the combined strength of product pricing and the risk acceptance criteria enabled i:protect to ride out the ‘claims storm’ that was triggered by the financial crash of 2008. From a brand viewpoint, the ability to continue trading and increase prices incrementally avoided shock market withdrawals and premium spikes which several competitors implemented. The later also triggered market intervention on pricing by the regulator. Despite market turmoil i:protect continued to offer market beating pricing for its (target market) customers and remained on Moneysupermarket comparison tables. By 2011 this approach established i;protect as a credible niche brand.
Marketing tests repeatedly showed that the sales made via Moneysupermarket were doubled by customers who came direct to the i:protect website. When i:protect was removed from the Moneysupermarket comparison tables, an equal number of people did not buy direct. Hence critically Moneysupermarket offered excellent brand awareness among people who were actively looking to buy the product.
Although good for building a new brand, price comparison websites ultimately promote a ‘race to the bottom’ if your organisation is highly dependent upon them. Hence i:protect products were removed from Moneysupermarket in 2011 when this niche brand had established enough credibility to stand alone and rely on PR, SEO and links from consumer websites to generate sales.
Did you know
Due to the number of existing non-insurance businesses that already used iprotect in their name, for copyright reasons a colon was introduced between the i and protect. This got around the issue. The website URL (name) was still www.iprotectinsurance.co.uk i.e. without the colon. However Google search ignores colons so when people searched on the name, they were still presented with all iprotect offerings! Also i:protect launched before the iPhone – so should the company have been called iProtect instead? Perhaps we missed a trick there… ahh the benefit of hindsight.
For more information about this case study and other brand building techniques please contact Dennis Haggerty.