Wednesday, February 15, 2012

How Marketing Health Insurance Will Change

One trend in marketing that I am keeping my eyes on is how health insurance will be marketed to a consumer demo in a big way once the affordable care act takes full effect in 2014.

Health care is mostly sold to businesses and thus has traditionally been business-to-business marketing. In fact, I'd bet that most consumers (myself included) don't truly understand the nuances of insurance polices beyond the basic formula that employers will purchase plans and part of the cost is payed through a payroll deduction and when sick, they can go to the doctor.

However, when the law takes effect, health insurance companies will be marketing a lot more to individual consumers. That presents a enormous challenge for these marketers who suddenly must adjust how, what, and with whom they communicate. Furthermore, health insurance is a product layered in complexities and one with no strong brands positioned in the minds of consumers. It will be very fascinating to watch how these marketers will tackle this challenge and how the industry copes with a new sub-category taking shape.

In a recent article in AdAge, Alexandra Bruell wrote that just what insurance companies are planning to differentiate their brands for consumers.

According to the article, "to stand out in what will likely be a crowded environment, companies are building private exchanges and retail outlets."

One of the major insurance companies, "Aetna, recently rebranded itself as a "health-solutions company" to evolve from "an insurance company that was historically more b-to-b in the insurance and benefits arena. We need to think about how, with the tools and resources we have [and] ones we're investing in [building], we make the health-care system less complex and overwhelming," according to Belinda Lang, VP-brand, advertising and consumer marketing at Aetna.

However, the most important part of rebranding health insurance for the consumer market was never mentioned - launching a new brand. Despite undifferentiated positions, I suspect many health insurance companies will resist launching a new brand for this new sub-category, likely worried that their is too much equity in their current position-less brands. If health insurance companies really want to reach consumers with a "less complex and overwhelming" message, a new brand should be at the top of their to-do list.

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