Thursday, March 6, 2014

How Geico Overtook Allstate

"Geico passes Allstate to become No. 2 U.S. auto insurer."

To a smart marketer, a headline like this one jumps straight off the page, understanding the magnitude of such a story. Brand movement within a category, especially a mature one like auto insurance, is a rare feat; category rankings simply don't move that easily. 

But, what makes this an even more interesting case is that Geico has achieved this with, and I say this kindly, some of the worst advertising ever created.  For the most part, Geico's ads are for completely undifferentiated and don't say squat about the actual insurance - except for one exquisite takeaway they park at the end of every ad.

"15 minutes could save you 15% or more on car insurance" 

This one simple sentence is truly the driving force behind the Geico brand. The reason it's so powerful is that it has differentiated the brand from their competition in a very real way.  Geico could have chosen to challenged the "good hands" team with a "better hands" strategy, but they understood that doing the same thing as an established competitor is a recipe for sure-fire failure.  Instead, they positioned themselves differently; as a cheap and convenient alternative to other auto insurers.  Of course, this is a very attractive alternative for many consumers who hate shopping around as much as they hate overpaying for it.  

Furthermore, it's important to acknowledge Geico's branding discipline; they've stuck to their "15 minutes" position for nearly two decades and it's paid off.  They insure the second most cars in the country that owns more vehicles than any other in the world.  But it doesn't hurt to spend over a billion dollars a year on advertising either. 

Naturally, when you're marketing strategy is as successful as Geico's, you don't just make headlines for jumping past the competition, the competition makes headlines for emulating you.  Recently, Esurance launched their "better hands" strategy against Geico, offering to cut their quote time in half.

As always, thank you for reading and for sharing.

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