MARKETING

SHIFTING INTO DRIVE

Progressive's new brand
steers personal auto business toward independent agents

By Elisabeth Boone, CPCU

“Progressive’s agency business is now run separately from its direct business. The company is committed to building a separate agency brand, and tens of millions of dollars will be spent to promote the Drive brand.” — Jeffrey Yates, Consultant

When you think of Progressive Insurance, three words likely come to mind: personal auto giant. Established in 1937, Progressive has employed multiple distribution channels to become the third largest U.S. private passenger auto insurer, with 2003 premium volume approaching $12 billion. Progressive is the country's largest writer of private passenger auto insurance through independent agents; they produce some two-thirds of the company's business.

Consumers who visit the Progressive Web site can choose to purchase coverage direct from the company or through one of its more than 30,000 independent agents. Many of those agents, though, believed that they were being relegated to second class status because not only could customers buy insurance on the Web site, they also could change coverages online with no agent involvement. What's more, agents pointed out, the company's print and broadcast advertising exhorted consumers to purchase coverage direct via toll-free phone numbers or the Internet. Where, these agents wanted to know, was Progressive's commitment to its largest distribution channel?

When agents spoke out, Progressive listened. In late September the company flew 1,200 of its top agents to Las Vegas — without telling them why. As agents arrived at the plush Hotel Paris on the fabled Strip, the suspense mounted as they speculated about why they'd been brought here and what was in store.

They didn't have to wait long to find out. On their first night, agents boarded buses for a secret destination that turned out to be the Las Vegas Motor Speedway. After dinner, engines roared to life for a demonstration stock car race. The winner? A mystery car that amid a burst of fireworks was unveiled to reveal Progressive's exclusive new brand for independent agents: Drive^sm Insurance from Progressive. The next morning, agents entered a hotel ballroom to the pulsing beat of classic car tunes like the Beach Boys' "409" and Bruce Springsteen's "Born to Run." As the agents took their seats, Progressive launched an elaborate presentation that featured its top executives, agency business managers, consultant Jeffrey Yates, and branding expert David Aaker.

Just for agents

Setting agents apart is what Drive is all about, said Jeff Yates, who served as a consultant during the development of the brand. "Progressive's agency business is now run separately from its direct business," he said. "The company is committed to building a separate agency brand, and tens of millions of dollars will be spent to promote the Drive brand. Referral programs will draw business into the agent's office. The brand is designed to fit in with the agent's brand and the Big I's Trusted Choice® brand." The new brand, Yates continued, "goes to the very core of the company. We hope it will convince you of Progressive's commitment to you and the independent agency system. Progressive is working very hard to earn your trust."

Independent agents are beginning to take back personal lines market share, Yates observed. Independent agents today write 35% of personal auto business in the United States. Representing $144 billion in volume, personal auto is 37% of the entire property/casualty market, Yates noted. "Each additional percentage point of personal auto business independent agents are able to write represents $1.5 billion," he said. "Progressive believes in you and your future; it's time for you to believe in yourselves and take back market share."

Explaining the importance of branding and describing the elements of a successful brand was David Aaker, vice chairman of Prophet Brand Strategy and professor emeritus of marketing at the University of California at Berkeley's Haas School of Business. Each attendee received a copy of Brand Leadership, written by Aaker and Erich Joachimsthaler, chief executive officer of The Brand Leadership Company.

"Brand building pays off," Aaker said. "If you add emotional or "I feel" benefits to functional benefits, you get a higher response." Aaker shared a quote from brand strategist Scott Talgo: "A brand that captures your mind gains behavior. A brand that captures your heart gains commitment." Progressive's new tagline, Relax, Just Drive™, instills a feeling of comfort in consumers, he said, and that in turn can lead to commitment.

It doesn't matter how much a consumer may like and respect Allstate, State Farm, or another direct writer if he or she wants an independent agent, Aaker asserted. "Brand relevance is more important than brand preference. Our challenge is to make the direct writers not relevant to a growing subcategory of the market." Together, he said, the Drive brand and the agency brand "can differentiate and energize you, and help you be relevant. It can change consumers' perception of you and make the competition less relevant." To capitalize on the Drive and agency brands, Aaker said, it's essential that agency staff not only understand the brand but live the brand. The questions are: "Do you understand the brand?" and "Do you care?" The Drive brand, he said, "adds differentiation, energy, and relevance to your brand." The brand demonstrates Progressive's commitment to the independent agency channel, provides separation and clarity with respect to the carrier's direct business, serves as a vehicle to build up independent agencies, and incorporates Progressive's strengths as a market leader, Aaker noted. Coincident with the introduction of the Drive brand, Progressive is rebranding its direct business as Progressive Direct and will operate that segment of its business separately from the independent agent segment.

Listen and learn

In creating the Drive brand, Progressive spent two years soliciting input from consumers, agents and their trade associations, and top branding and advertising agencies. The results of this research confirmed what agents had been telling the company: Consumers don't associate agents with Progressive (78% of consumers surveyed didn't know that independent agents sold Progressive products); agents are an afterthought in the company's advertising for direct business; and agents aren't quoting on enough preferred business. In fact, many agents viewed Progressive as a market for nonstandard risks like DUIs.

Further confirmation of Progressive's image among agents came straight from the top when Glenn Renwick, president and chief executive officer, related an incident from his personal experience. "I already had my auto coverage with Progressive, and I asked my agent for a quote on a homeowners policy," he said. "I praised Progressive's service and told the agent I wanted to buy its coverage." Did the agent seize the opportunity to place the business with Progressive and build the account? "No," Renwick said. "He touted a package offered by another company. I saw then how closely Progressive was identified with DUIs" (and other problem risks).

Having heard what agents and consumers had to say about their company, Renwick said, Progressive's management team resolved to take action. "At Progressive we take risks and try things before they're forced upon us," he declared. "We're not just here to play; we're here to play to win." The business written by the 1,200-plus agents in the room, Renwick observed, would put them collectively among the nation's top 10 auto insurers. "We can effect change," he said. "With a joint commitment, we can take the auto business distributed by Progressive and you to a new level. We have the tools to change our mindset."

With the launch of the Drive brand, said Bob Williams, Progressive's agency group president, "we now have the scale and the will to take on the captive agent companies. The launch of Drive will shake up the market. We offer consumers competitive products, superior service, and a relationship with a local agent. We have a strong brand to grow agents' business and our business."

New look and feel

“Agents, start your engines,” could be the rally cry at Progressive’s unveiling of the company’s new Drive Insurance brand for independent agents at the Las Vegas Motor Speedway in September. Glenn Renwick (left), President and CEO of The Progressive Corporation and Bob Williams, Agency Group President, helped rev up the 1,200 independent agents that Progressive flew in for the special event.

Designed to be fresh, energetic, and forward looking, the bright green Drive logo will appear on everything from bills to billboards, said Ben Sheridan, agency general business manager for the Midwest. The scheduled official launch date of Drive Insurance from Progressive is December 10 of this year. To build the agent-centered brand, Progressive plans a multi-million-dollar advertising campaign that will use celebrities and humor and will buy space on nationally televised sporting events, starting with the NFL playoffs next month. The company also will test radio, direct mail, and Internet messages. In Progressive's surveys, Sheridan said, agents overwhelmingly responded that the company's advertisements should direct business toward agents. In the TV ads that will promote Drive, Sheridan said, "You, the agent, are the focus." The objective of the new campaign is "brand building, not direct response like GEICO and Progressive Direct." Ads will direct consumers not to progressive.com but to a new Web site for agents: driveinsurance.com.

Agents who meet certain criteria also will have the opportunity to participate in a cobranding program, said Tim Madden, agency business general manager for the Gulf region. The Agent/Broker Participation Program will involve shared advertising via billboards, outdoor signs, plaques, and Drive image brand items, as well as Yellow Pages ads. Under consideration are direct mail, print, TV, and radio ads. "We seek broad, active agent participation," Madden said. "This is more than a co-op program, and there's no cost to you except your commitment."

The Drive brand's new Web site, driveinsurance.com, helps consumers locate an independent agent in their area and also points out the benefits of working with independent agents, said David Skove, agency business general manager for the mid-Atlantic region. A message at the top of the opening screen reads: "Your Local Agents.... No one is better suited to provide expert advice and custom policy options to fit your needs." Consumers who visit progressive.com and want to work with an agent will be directed to driveinsurance.com, where they will see an improved Find an Agent feature with customer quoting options that generate leads and referrals. The consumer can obtain a quote online but must close the sale with an agent. What's more, policy changes now must be made through agents rather than online. Agents can register to become referral agents and participate in the online quoting and agent close program.

The race is on

The launch of Drive Insurance from Progressive is a bold move on the part of a company that from its inception has been a work in progress, evolving from a nonstandard carrier to a mainstream and highly successful player in the challenging market for personal auto insurance. The carrier clearly is committed to delivering insurance in the way consumers want to buy it and, by acknowledging independent agents as its leading distribution source, Progressive is fine-tuning its engine for the race toward higher market share.

In closing remarks, Greg Trapp, director of agency marketing, affirmed the power and value of independent agents to Progressive. "You drive us," he declared. "When you offer Drive to your customers, it's not because it's the only thing you have—it's the best thing you have." *

For more information:
Drive Insurance
Web site: www.driveinsurance.com