It’s Progressive’s Flo — and an independent agent
Posted by ltoops@sbmedia.com in Progressive, advertising, brand perception, consumers, direct writers, insurers, tags: advertising, direct writers, Progressive
Last month we posted an interview on our Web page with Progressive’s Karen Barone, national distribution leader for agency business, which proved to be 0ne of our most popular features.
Not surprisingly, part of the article’s interest — or more accurately, controversy — involves Progressive’s promotion of direct purchase along with sales through its agency force.
Many of our readers pointed to Progressive’s heavy TV advertising — currently featuring the wacky saleswoman character, “Flo” — as testimony to its commitmemt to direct sales and cutting out the middleman. Surprisingly, in spite of the prevalence of Progressive advertising promoting direct sales, Barone noted that about 65 percent of Progressive’s sales actually come through its more than 30,000 independent agencies.
Now, in recognition of that fact, Progressive is unveiling on Oct. 19 a new Flo commercial, featuring — you got it — an independent agent. (Well, actually, he’s an actor playing an independent agent, kind of like actress Angelina Jolie will play me in “The Laura Toops Story,” but you get the idea.) And, taking a tip from other industry branding programs (remember the Big I and Raymond Burr?), Progressive agents can even access a version of the commercial they can customize with their agency’s branding to run locally.
The thinking behind this move seems pretty sound — an attempt to promote the insurer’s already prevalent independent agency sales. But the end of the commercial — a voiceover that states, “Prices vary based on how you buy” — sums up the controversy. Because, of course, consumers who buy directly through Progressive will pay less than those who go through an agent.
Do you think Progressive’s new campaign will increase agency sales?
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we shall see. They a;ways like to throw us agents a bone once in a while. Like Drive lol
I’d really like to think this will make a difference to the situation but I can’t see it happening. The average consumer has too strong a concept of the ‘middleman’ right now, and who can blame them, with groups like Progressive themselves advertising the notion on a grand scale. Unless someone can convince consumers there are tangible benefits to using an agent they are never going to seek one out, and will continue to turn to the Internet to cut away the additional layer. There clearly are benefits but who can put their hand on their heart and say they benefit the average consumer to the value of the agent’s commission? For those that can do that, the best thing to do would be to focus on the most important advantage they can describe and hammer this home with consolidated campaigns.
heres the dilema, progressive markets to gen y and gen x. There is no loyalty in their client base. The one area where they could have loyalty is the independent agent. But with Flo and their internet direct sales trodding all over their agency relationships it will be very hard to retain business and or grow. recent jd powers retentionn study shows progressive at 76% retention. They are running up hill in mud. They are trying to improve this by offering homeowners but I question the strategy. Bottom line they wont pay an agent for the business. Who needs them, their are plenty of other carriers that want a partnership with good agents. Progressive has been playing both sides of this markenting fence for 20 years. They may be reaping the fruit of it now.
I’m not sure the new ads will change who buys from Progressive vs. an agent. The direct ads have been out there for a long time. I find well established branding to be difficult to overcome. I see Progressive to be covering all of their basis. They know that part of the public will buy direct and others prefer to use agents, thus they have both channels.
I’m writing from Progressive and would like to offer a correction. The blog posting states that “…consumers who buy directly through Progressive will pay less than those who go through an agent.” This general statement is not accurate. Some customers will find a lower rate shopping direct than they would with an agent, but the reverse is also true–for some customers, Progressive’s agency rate is lower. Our prices reflect the different economics of each channel. Our objective is to offer competitive products through independent agents and direct to consumers.
Hi Laura,
Great blog – I agree with Pat on this one. Flo like the mighty gecko has been out there for a bit. UNLESS they run the agent ads soley for an equal period of time, I doubt perception or buying will change. Power of the media – never ceases to amaze me!
To Joe’s comment – Gen Y and X have been trained to internet buy, and it is true they don’t have loyalty. Most also haven’t accumulated assets to be truly “worried” about insurance, they feel it is a commodity that they must have vs something they need to have.
Cindy
I agree with Susan, a consumer DOES not get a better price “cutting out the middle man”. MOST of the time I can write a Progressive policy cheaper than Progressive Direct. Just like the lizard and all the other online promoters they don’t give you a better price. Someone has to pay for all that advertising
and it’s You.
It’s our job as Independent Agents to get that word out and dispell that myth. Independent Agents
DO bring a value to the process, especially when many of the voices on the other end of the direct sellers are not even licensed.
Steve
Steve, I like your thinking on this, But, As professional insurance agents ” get the word out”, we have added value to the progressive name. Thus added value to the progressive direct effort.
If I move my office right next to your’s and put up a big sign advertising exactly what you sell and my sign is as big as a house and your sign is hidden in the shadow of my big sign. Would you still be as comfortable with me. And by the way your “get the word out” campaign. Helped pay for my gigantic sign.
Thanks for the customer, partner
I like Steve’s comment and attitude.
I would like to Independently represent Progressive. What/where is an effortless process to contract?
why did my 10-16-09 posting get erased. ???????
Looks as if it’s there to me.
jeff and steve seem a little naive to me. Its this kind of naivity that will manifest in fewer carriers and still fewer customers for independent agents 20 years from now.
I wonder about this split approach. One thing’s for sure, though: Progressive’s spending a LOT of money trying to get people to go directly to their website. Besides the heavy TV advertising, they’re also #4 on SpyFu.com’s list of the top 100 search engine advertisers, spending (according to SpyFu) $325,000 a day. That’s a LOT of money to spend if they’re trying to increase agency sales.
Most agencies never receive leads from progressive. Agencies need to compete against progressive, just like farmers, st farm and allstate. Progressive’s approach is for progressive.
Health insurance companies give health insurance agents the same shaft. They heavily market for direct sales and then cut our commission levels for not meeting their quotas when we are in direct competition against them. The kicker is that with health insurance, the rates are exactly the same if you go direct or if you go through an agent. The big difference is that if clients see an agent, they will be guided to the very best policy to fit their needs and agents fully explain the coverages and the limitations. The health insurance companies only care about pushing their own products even if it’s not in the best interest of the client, and they are notorious for only giving half the story to clients. They don’t fully explain to clients about the drawbacks or limitations on the policies where the clients actually understand those limitations. If insurance agents did that to people, we’d be sued and loose our licenses, but the direct marketing carries on unhindered.