FACT-BASED RESEARCH
HELPS COMBAT THE “BIG GUYS”

By Stephen Gardner, PR Advisor, Johnson Direct

A successful US company had carved out a nice niche for itself in the world of insuring motorcyclists. But clouds loomed on the horizon as large multi-line insurers such as GEICO (“Save 15%!"), Progressive and State Farm realized the potential of the rider market and began their own campaigns to sway business to themselves.

Since our client focuses totally on motorcycle insurance, it wisely recognized the need to act quickly and effectively to counteract the mega-dollars those other companies are devoting to selling their product. GEICO is even considering a television sit-com featuring their trademark cavemen (funny guys, but are they selling insurance?), to keep their name in front of the buying public!

Johnson Direct was hired to increase inquiries from potential buyers and increase the company’s “bind” or conversion rate, even in the face of competition from the big boys of the industry.

The key was to find the best way to accomplish those goals. Johnson Direct chose to provide the client with sophisticated fact-based research. The client was already marketing in nearly all US states, but their efforts weren’t based on any real data. Our task was to help them harvest data that would allow them to make decisions based on having real knowledge of their core markets.

Highly detailed techniques were used in the data collection process, including where, geographically, the best potential existed to sell our client’s products. Although working hard to secure business in 49 states, Johnson Direct found our client was drawing 25% of its sales in three states; 50.5% in nine states; and 80% in 23.

Johnson Direct also examined the 3,141 counties in the US, discovering that our client had current policy owners in 90% of them, although the concentration of policy owners was highest in states ranging from the east coast to the Midwest. The client company had approximately 12 heavy concentrations of policy owners in the US.

Based on copious and detailed research, Johnson Direct recommended that the client utilize layered decision-making. The client agreed to suspend marketing activities in six states altogether. Another 15 states were chosen as having a very high chance of generating strong response rates to marketing efforts and 14 were identified as having a high chance.

The die was cast. Marketing messages would target appropriate audiences in the “very high” and “high” states. Upon Johnson Direct’s recommendation, the client addressed its competitors’ claims of significant cost savings by focusing its marketing message on “Savings up to 35%!”

The client’s control package from the previous year was retained, and Johnson Direct developed three new self-mailers and a letter package. Each of the new pieces included a referral card to be passed along to the potential customer’s friends. All pieces, plus advertisements in motorcycle-specific magazines “hit” within a month of each other at the end of 2006 and beginning of 2007.

Although data to date is statistically insignificant due to the short time frame since the campaign was initiated, the client has reported an increase in the conversion rate of those inquiries generated from the new materials, and Johnson Direct has every confidence that the company will continue its position of strength and desirability in the marketplace – thanks to fact-based research and layered decision-making.

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