Changing The Perception Of An Industry
When we decided to launch a new insurance brand, we knew that we would have a fair bit of mud slung at us. After all, no one likes paying for their insurance, and no one really likes their insurance provider in New Zealand.
The mud slinging started on day one, and continues to this day. An email just this morning complains about our imaginary “mega-million profit margin”, and Facebook comments include accusations of being “fraud people”.
All because we were in insurance. Our name was tarred before we even opened the doors. And admittedly, rightfully so. The industry makes headlines every month for the wrong reasons.
We knew Kiwis have a bit of a bad taste in their mouth when it comes to insurance, but we didn’t fully understand just how bad it was! It knocked us back a little bit, but it also motivated us.
In the grand scheme of things, the bar was set low for a new player to enter the market. From our point of view, simply exceeding this low bar would be a sure-fire path to building a great brand. Easy, right?
Laying The Foundation
We spent a morning brainstorming to hone in on what was the root cause of the problem in the insurance industry and captured it in one statement:
“You’re wasting my time and I don’t know what I’m doing!”
“Wasting time” can paint many pictures. Long forms, slow call centres and the nagging feeling of paying for something and never getting anything.
“I don’t know what I’m doing” is pretty self explanatory. People hate being confused, and insurance was confusing.
Put these two feelings together and the pain point is amplified. Nobody likes wasting time, especially doing something they don’t even fully understand. But invert this problem, and you’ve got a pretty enticing foundation to build a brand on. Surely if someone built a simple online process, where the customer understands the product and believes in what they are buying, they’d be on to a winner. We decided that would be us.
Why Stand For Change?
We’ve seen companies go before us and bring a bit of friendliness and fairness to industries that had a reputation problem.
Kiwisaver funds were perceived to be riddled with complexity and carry high fees until the not-for-profit, low-cost KiwiSaver scheme Simplicity launched in 2016. Until Simplicity declared war on high KiwiSaver fees, many viewed the fee-ridden nature of the Kiwisaver industry as a necessary evil. Now over 28,000 Kiwis have switched to Simplicity to support them taking a stand against the largely Australian-owned banks.
Setting brand values and standing for change might sound like marketing fluff, but it can dramatically improve business performance.
Beside the obvious answer that everyone wants to support a brand that is genuine and trustworthy, it really helps get the ball rolling for startups and your customer base grows. Would Simplicity have 28,000 raving fans throughout the country if they were just another Kiwisaver provider? Unlikely.
As Cove grew from hundreds of customers to thousands of customers, we found the benefits of being genuine and approachable were amplified.
Having your first 50 customers experience a refreshingly honest brand and tell their friends is amazing. And having hundreds, then thousands of customers doing this is the base of a sustainable business.
The effect on the bottom line is lower cost per acquisition, higher customer retention and a marketing budget that can be diverted towards furthering customers satisfaction to accelerate word of mouth growth.
Any brand can take advantage of an industry’s poor perception. Discover what people are complaining about in your industry and strive to fix it. You’ll find when you open your doors for business each morning, there is a new line of customers ready to join you on your journey.
University of Auckland graduate Andy Coon began his career in insurance at Sovereign. He also worked for a number of years in investment banking across the UK, US, and NZ before returning to insurance and working on various startups in Europe. Andy has long been a tech enthusiast and is loving applying cutting edge technology to the insurance industry. Andy is Strategy & Actuarial at Cove Insurance.
