Part 2: Insurance Isn't As Boring As You Think
Plus, how do you solve a problem like a well funded competitor?
Hello Gobbledeers!
In this week’s Gobbledy:
I beg you to share the newsletter. (I think it’s only fair to put it in this little index)
A new podcast episode that’s about golf, but I promise it’s also not about golf. Except for the parts that are.
Part 2 of what I meant to write about last week (insurance and mascots and why software companies should use them more)
Readers’ Corner.
I tried a little experiment last week where I didn’t start the newsletter by humbly requesting that y’all share the newsletter. That resulted in much less sharing of the newsletter (A/B testing!). The good news is, when you folks share the newsletter, people subscribe. And when people subscribe, inflation goes down and interest rates decrease and the Bitcoin goes back up to $24,000 - maybe $24,500 - and unemployment maintains at a steady 3.5% and companies continue to show how much they care about Juneteenth by publishing dessert recipes related to Juneteenth. All is right with the world.
This Week’s Gobbledy Podcast
Last week I wrote a bit about the hulabaloo (is that the right word? maybe I mean hubbub?) between competing golf tours (tl;dr: Saudi Arabia has backed a new golf tour called LIV that the PGA Tour is not happy about). And the more I thought about that, the more I thought that I wanted to talk to someone who could explain everything that’s going on there - because it’s just as much a marketing story as it is a golf story.
So for the podcast I spoke with my friend Nick Green, who runs a golf marketing agency (that’s a thing) to talk about what’s happening with the PGA Tour and the LIV Tour, but more broadly about this question:
What happens when an incredibly well-funded competitor shows up at your doorstep?
This happens in tech all the time (or did, back when companies were able to raise cash), and there are a many ways to handle this development. Here are 3:
Go on the offensive. This was the PGA Tour’s approach, accusing the golfers who chose to play for the Saudi Arabia-backed LIV tour of (and I’m very, very, very much paraphrasing here) being complicit in the 9/11 attacks. PGA Tour commissioner Jay Monahan recently said, “I have two families that are close to me that lost loved ones [on 9/11] my heart goes out to them and I would ask that any player that has left, or that would ever consider leaving, have you ever had to apologize for being a member of the PGA Tour?"
That is batshit crazy.
The go-on-the-offense approach can work, for example, by lobbying to pass regulations to stop or slow the growth of the well-funded company. This worked a bit to slow AirBnB’s growth in cities around the world. And worked for a while to slow Uber (until it didn’t). I don’t know sports marketing, but I’m pretty sure “you’re just as bad as the terrorists” isn’t the right messaging.Embrace a segment. As companies grow - and this is especially true in software - they tend to move away from their core market. They see opportunities to expand in other demographics, other industries, other geographies. That’s not a problem on its face, of course. But it does present an opportunity for someone to come along and focus on one segment and win those customers. The PGA Tour has been highly protective of how highlights of their tournaments are used online, which may have been fine 15 years ago, but is basically presenting the opportunity for someone to come along and make golf available in small bites, the way the young’uns watch video today. The NBA figured this out years ago. The LIV tour is going to figure this out, and soon enough they will own the young golfer demographic, and present the game in a way that younger people like to watch it. Tight focus on one target market is never a bad strategy.
Keep your friends close, but your enemies closer. This can mean a merger, or a spinoff, or just an agreement, but coordination in some (legal) way can make sense. In the case of the golf tours, LIV has infinity dollars. I can imagine them creating a global golf championship with a $100 million purse, working with the PGA Tour on the event. Apparently the PGA Tour commissioner has refused to even take a meeting with the LIV Tour. But as we’ve heard so often, keep your friends close, but your enemies closer.
I promise, this was a fun podcast even if you’re not a golf fan. Listen here:
Insurance & Mascots, Part 2
Last week I was starting to write about how insurance marketing has changed over the years, and what software marketers can learn from that, but I was distracted by a hilarious/not-hilarious 1970s Allstate campaign about young men dying. #hilarious
I remember the point I was trying to make:
The Planet Money podcast had a story about how in the 1990s GEICO changed insurance marketing (transcript here). As you may have noticed, insurance ads from before then were about death, or the fear of death, or scaring you into making sure you had enough insurance because death was pretty darn likely (Editor’s Note: Death’s likelihood historically has hovered at 100%, give or take, but these ads were referring to an untimely death).
In addition to the “If you die, young man” campaign we saw last week, Allstate also ran this hilarious ad in 1970:
So that was how insurance was marketed.
GEICO’s head of marketing thought that maybe - just maybe - they could use a new tagline to try to differentiate themselves. (Gasp! - use MARKETING to differentiate yourself?????). Since insurance was pretty regulated, the products were pretty similar across the board, but the experience of buying were a different from company to company.
GEICO let consumers call an 800 number to get a quote, and doing that took about 8 minutes (other companies assumed you would go to see an agent in person). When the GEICO marketers tested a message around only needing 8 minutes to get a quote, people felt it was too short - insurance is complicated and the feedback was that 15 minutes felt like it was faster than seeing an agent, but still long enough to be thorough.
Plus, because they use a call center rather than commissioned agents, their costs could be lower - lower, in fact, by 18%. But their ad agency pushed back:
Although 18% is kind of a weird number, 20% would be a lie…They found that 15% was a very believable number. And it was better than saying $200 or $500 because people apply the percentage to whatever their basis is, you know, so it's - the percentage actually was appealing.
Voila - a tagline. 15 minutes will save you up to 15% on car insurance.
Numbers can be very powerful when used repeatedly in marketing (which, as I’m writing that, sounds like a really obvious thing to say). But it’s true. Ivory Soap is 99 44/100ths percent pure. How do I know that without Googling it? Because they’ve been writing it for more than 100 years. I know that 4 out of 5 dentists surveyed choose Trident. My grandfather certainly knew that Pepsi gave you twice as much for a nickel. Allstate told us drunk drivers will kill 673 of us this week.
Numbers provide a shorthand for value.
I’m not sure I’ve ever seen a software company use a number like that. So many claim to be the fastest whatever, or help you increase your revenue, or loved by their customers or any of the interchangeable messages you see on so many websites.
What’s a quantifiable differentiator for your product? How can you turn that into a marketing message?
The GEICO Gecko was created as a response to an issue the company heard in a focus group - everyone pronounced GEICO differently. The Gecko was created to address that. The first commercial starring the Gecko included this line:
I am a gecko - not to be confused with GEICO, which could save you hundreds on car insurance. So stop calling me.
The Gecko was a success immediately, and every other insurance company decided that they needed a mascot or a character who could serve as a shorthand for the values of the brand.
I’ve pitched the mascot idea while I’ve worked at software companies before, and the answer - universally - is that it’s childish and un-serious and CIOs don’t like them and and and and. Now, I’m enough of an adult to recognize that response may have been due to my own inability to pitch the idea (marketers are bad at marketing themselves). Even so, while SaaS companies are technologically advanced, they typically do not like to move fast and break things when it comes to marketing. They do, however, like to barely move at all and ensure that all the things they have remain intact at all times.
Mascots work in a crowded market with little product differentiation. The Jolly Green Giant doesn’t actually grow (or harvest) the green beans in that can (spoiler alert). But his image is worth an extra 12 cents a can.
They can absolutely work in software, because so many categories face similar challenges - it’s difficult to understand the product differentiation without digging deep into the technology (and even then it can be challenging).
Someone will use the GEICO formula in software — memorable number coupled with memorable character - and they will take over a category. Or they won’t. I don’t know.
Readers’ Corner
Thanks to reader Michael N. for passing along this math problem from UI Path:
It was my understanding there would be no math.
If you have a bit of gobbledy you’d like printed here, email me at jared@sagelett.com.