Sunday, August 31, 2008

Gustav Gives Insurers Get Another Chance – Along with FEMA And NOLA

Some may think that I’ve beat up on State Farm and its brand management lately. Actually, that is not the case. What I did a week ago was to post a link to a blog by an unsatisfied State Farm policyholder. State Farm may have ticked off the wrong guy because he also writes business blogs on brands.

Recently I was reading a book on marketing and branding which singled out State Farm for doing an excellent job of pitching its brand – that State Farm is THERE. It commends State Farm for its response after Hurricane Hugo in 1992. (See The Invisible Touch: The Four Keys to Modern Marketing by Harry Beckwith (2000, Warner Books, p. 101).

With Hurricane Gustav bearing down on New Orleans and the Gulf coast now, we have heard a lot about how FEMA and the City of New Orleans have learned various lessons from the nightmarish Katrina experience three years ago. Katrina will also test the mettle of insurers – including but not limited to State Farm -- to see if they too are better prepared to avoid some of the servicing and coverage wrangles which followed the wake of that storm’s devastation.

Wednesday, August 20, 2008

Claim Service Drives the Brand … or Destroys it

Insurance companies have reputational assets from the goodwill, image and brand they try to project in the consumer marketplace. One insurer is like a good neighbor. One puts you in good hands. Another is on your side. Yet another might be able to hook you up with a caveman… or a gecko.

The flip side: insurers have reputational risks that can take a hit if an insurance company botches a claim. In the age of the Internet, where it seems that everyone has a blog (including claim commentators!), one client’s dissatisfaction with an insurance claim can quickly reach tens of thousands through the power of cyberspace. Such is the case with a recent blog by one John Fergurson in his August 12, 2008 blog, “State Farm is Where???”

Here, Fergurson relates the pain of a homeowners insurance claim he filed with Stare Farm. He quickly found that his soothing agent was not the one who handled his loss. In fact, he was surprised to learn that agents have little to do with the adjusters who “service” policyholders. / The agent is a local; guy or gal, part of the local community.

The adjuster is off, hundreds of miles away.

Whether you agree or disagree, I’d recommend you take five minutes to read “State Farm is Where?”

The point here is not to pile on State Farm or any other insurer. The point is to understand how claim service can either strengthen a brand or undermine it. Filing a claim is, for policyholders, where “the rubber meets the road.” Insurers who project warm and fuzzy treatment but who deliver hard-nosed, ball-busting claim service may find their brands tarnished.

They might even find themselves the target of criticism on the blogosphere.