Autumn 2002

Service Businesses Insuring the Brand

How do service brands like insurance companies achieve brand image and brand differentiation? Sure there's the competitive position on various attributes, but more importantly is the question of how these attributes feed each other to make one brand stand out. Once a brand stands out as `better than the rest' it achieves an emotional loyalty that is far stronger than loyalty based on more tangible attributes such as price, product or even service. In the wake of the HIH collapse, it should be no surprise that safety emerges as the most important influence oh how people really feel about their insurance provider.

Matt Balogh of McNair Ingenuity Research has analysed data from the Australians Today Consumer Insights research program to show just how service brand attributes can be leveraged in a more sophisticated way in order to understand which ones are really pulling the customers.

A Traditional Approach to Comparing Brand Attributes

Traditionally a marketer will look at the results of brand ratings and eye-off their competitor on the various attributes. Based on the Australians Today research, if AAMI and GIO were doing this they would be confronted with a graph such as this, which at first glance makes it appear that AAMI generally has the stronger brand position. AAMI leads on quality attributes such as helpfulness, responsive customer service as well as price, giving it a very strong market position in this comparison. The only attribute upon which GIO challenges AAMI is safety - no doubt because of its origins as the government - owned insurance provider. Interestingly, though, GIO's scores on safety do not indicate that this perception is held more strongly amongst older people, indeed GIO was most likely to be seen as safe amongst those age 30 - 39, a key age group for this industry.

Predicting the perceptual leader However if we mine the data deeper, we can explore which of the attributes assessed most likely influenced the overall perception, defined by being the insurance company that `stands out as better than the rest'. From this advanced analysis, a hierarchy of attributes was constructed - in this example for the Motoring organisations insurance companies. The findings show that safety was the number one issue, followed, at least for these organisations, by positive associations with car insurance (not so surprising) and the responsiveness of customer service. Of particular interest is that `low premiums' is one of the lowest predictors of an overall `better than the rest' perception. In other words, perceptions of insurance providers are built around safety, responsiveness to customer service and expectations of helpfulness when a customer does need to make a claim, and very much less driven by price.

Which Attributes Make an Insurance Provider Stand out as Better than the Rest Amongst Motoring organisation insurance companies

If the same predictors are true of GIO and AAMI we would discover that the one attribute that GIO out-rated AAMI on was the one attribute that would make an insurance company stand out as better than the rest. Once a brand stands out as `better than the rest' it achieves an emotional loyalty that is far stronger than loyalty based on more tangible attributes such as price, product or even service. The important thing is not to just ask consumers which attributes they think are important - all too often this produces a result suggesting that low premiums is most important, or that nearly all the attributes rated as very important. By using correlation and segmentation analysis it is possible to identify which attributes statistically predict that an insurance company stands out as the better than the rest.

These findings come form the Autumn 2002 wave of McNair Ingenuity's Australians Today Consumer Insights research program involving over a thousand people throughout the country in April and May 2002. The research also collected information on the insurance companies that respondents currently had policies with, as well as and extensive range of topics such as banking, motor vehicles, demographics and Ingenuity's Social Outlook model. The above information is copyright to McNair Ingenuity Research and may not be reproduced or published without McNair Ingenuity Research's express permission. Contact Matt Balogh ph 02 9966 9133.

You can learn more about McNair Ingenuity Research by visiting www.mcnairingenuity.com or calling Client Services Director Matt Balogh on 02 9966 9133

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