Elliot Schwartz, Independent Business Strategy and Marketing Consultant.
Without marketing, there will be no insurance industry. I, therefore, decided to put Elliot Schwartz, independent business strategy and marketing consultant, in the hot seat for some industry marketing and brand building insights.
Now you have to take into account that he is also the CEO of a specialist brokerage in the insurance industry, so he speaks our language. Elliot grew up in the States, attained a degree in economics and then an MBA at the University of Chicago. He started out as a Bloomingdale’s handbag buyer, moving on to management consulting, and then Truworths in Cape Town as Marketing Director.
At the end of his two year contract, he started a through the-line agency called Enterprise, integrating many different marketing disciplines. This business was acquired by an international advertising agency group, JWT, and Elliot became the CEO of their South African business. Later, he founded an advertising agency called SBBW which, in the 90s, grew to be the largest independent agency in this country. This business was acquired by a JSE listed group of which he become CEO. After leaving them a few years later, he was approached by the CEO of Hollard’s life insurance business to get involved on a consulting basis with Hollard, initially in their bank and motor short term insurance division.
Through the Hollard connection, Elliot worked with some brokers and UMAs, and began to understand other parts of the business. He also started doing work for other insurance companies on projects that did not conflict with what he did for Hollard. One of which was Renasa, a new, unknown and small business.
Elliot got involved about 17 years ago, initially helping them develop the business strategy to be the home of the independent broker. The reason for that was quite simple, according to Elliot. He says Renasa was a small business with limited resources and, at the time, alternative distribution was beginning to take off.
“We felt that virtually all the major insurers were taking their eye off the ball of the historic business of the independent intermediated distribution. If we focused single mindedly on that, while others were doing it almost as a sideshow, even if it was a declining market, it was never going to grow to zero”. They realised that the segment’s relative share might go down, but that it was always going to remain important, particularly for other than personal lines.
Says Elliot: “As a small player, we had an opportunity to grow substantially in that space. My ongoing involvement with Renasa since then has been as a marketing consultant, effectively in the role of Marketing Director. I’ve been involved with them and with you at COVER from very early on because in positioning ourselves as the home of the independent broker, we realised from a marketing perspective that our focus would be on the trade, not on the end consumer”.
According to Elliot, they also decided, as a small player they could not dissipate their limited resources. They needed to “be big in a small space”. So they built the Renasa brand, primarily utilising the two trade publications at the time, one was COVER and a second that subsequently closed. The latter was replaced with the FIA publication.
Renasa has always tried to be relatively dominant in these limited spaces- to be seen as a much bigger and established player than we were at the time. Eliot emphasises: “Additionally, very few people in marketing appreciate that consistency is the most important thing”.
Too often marketers love to chop and change, they get bored with their own work before customers do. Marketing people come and go, and money gets literally thrown down the toilet. The new people come in and think, well, if I’m only going to be here for 18 months I have to make my CV look good, so they change everything. The smart move if your marketing is working, however, is generally more of the same.
Elliot explains that, when he was in advertising, he had, amongst others, FNB and the then SA Eagle as advertising clients, for which they used a research service that tracked the noting and response to new commercials when they began to fly. This research company had a database that went back to the beginning of commercial advertising in South Africa in the late 70s, tracking the performance of every new commercial.
“What we realised is that while people are interested in the category generically, they don’t believe there are fundamental differences between the various suppliers. Consumers think that all banks are the same, and all insurance companies are the same. And even worse, their levels of expectation from them were quite low”.
When a new commercial is released, they would go to a statistically valid sample of customers and ask whether they have seen any new commercials recently? If yes, they had to describe the commercial. If they couldn’t describe the commercial, it wasn’t considered “noted”.
The interesting fact here, according to Elliot, is that when you look at the data for all financial services commercials collectively, compared to many other categories, noting is well above average. The reason for that is people have a real interest in financial services: banks, insurance companies, investment companies, etc. They might not be as interested as in cars, but there is far more noting of financial services commercials than for most consumer goods such as toilet paper.
However, despite this, of all the TV commercials in financial services that were noted (i.e. people could describe what happened in the commercial), 50% of these could not be ascribed to any particular brand. 24% ascribed to the wrong brand. So, for only 26% of all noted commercials was the advertiser was even correctly identified.
Says Elliot: “This perplexed us, until we began to do some of our own research. What we realised is that while people are interested in the category generically, they don’t believe there are fundamental differences between the various suppliers. Consumers think that all banks are the same, and all insurance companies are the same. And even worse, their levels of expectation from them were quite low”. We realised that, if Renasa were going to succeed, they really had to be different. He explains: “How can you be different when what you’re selling is insurance like everybody else. We decided the starting point for us was in putting the broker upfront central in what we do. The broker owns the relationship with the customer. Our business is about being “the broker’s best friend”, meaning that Renasa could empower him to be even more competitive, effective and, ultimately, successful at this.
Elliot, together with one of his ex advertising partners and good friends, Bruce Backhouse, now a highly respected fine artist, came up with two cartoon characters, Archie Broker and his dog, Roger. For over 15 years, Renasa’s advertising has consistently used Archie and Roger in different ways to explain why Renasa is the broker’s best friend.
Archie states the particular problem or opportunity he’s facing in his brokerage, and Roger explains how Renasa provides the solution. “We singlemindedly reinforced this message over the years in the limited trade media, but in a big way, with COVER as an important partner. Initially, it was just advertisements, but over time we expanded into different forms of thought leadership content using COVER’s electronic platforms and other things as well”, he explains.
About 10 years ago, the Archie and Roger campaign was expanded into television. This might surprise because TV is a consumer, not a trade medium. But Elliot explains that the TV commercials, which mirror the print advertisements in look and message, are only flighted in a handful of specific golf events that are of disproportionate interest to brokers. This campaign, done “on the smell of an oil rag”, has definitely helped reinforce the perception that Renasa is a substantial and reputable insurance company. Again, the strategy has been to be large in a small space with a recognisable brand character and a consistent message.
According to Elliot, the net result is that Renasa’s business has grown about 25 fold. It has truly become an important and well regarded insurance company with intermediaries, having repeatedly been named an “insurer of the year” finalist and winner by the members of the FIA. He stresses that it was the combination of the advertising positioning the company as the brokers’ best friend and the operational implementation by Renasa of actually “walking that talk” that accounts for the success.
A CHANGING LANDSCAPE
The broker landscape has changed a lot over the years. Asked if he can give brokers a few pointers on marketing and brand building, with his Renasa hat off, Elliot shares the following:
- The marketing rules don’t change for brokers. If you don’t have a lot of money, you need to focus where you spend your money and “own” something. Don’t try and communicate everything, everywhere- you will accomplish nothing except waste money. For example, if you’re regional or local, you obviously don’t waste money outside of your region. If you’re after a certain class of customer be seen as big and bold as possible where those customers go to look.
- And be singleminded and consistent in terms of what you communicate. This message is about one thing that may not be the only thing you can do for your customers. But, laundry lists of all the things you can do are boring, people don’t remember that.
- Your message should be about how you can solve a problem or opportunity your customers have in a way that others cannot. It’s about why you are “different”, not even necessarily “better”. The reason for that is because before somebody uses you, they are not going to believe you’re better just because you say so. What they need is to be intrigued enough to try you. If you deliver, they can post rationalise that you are, indeed, better.
- Finally, do this in as engaging and entertaining a way as possible. Simply stating your strategy is boring.
- The better you deliver on the all the points above, the less you need to spend to be effective.
Elliot advises a complete and exclusive focus on one value proposition. If that resonates with a need, and the client understands that the broker has a way of fulfilling that need, he may be tried. Then, once tried, if the broker delivers, the client will realise that the broker is indeed better.
According to him, they did that in their brokerage. Their one thing was to create a new referral network for what they do as a specialist brokerage with virtually no marketing budget. The product is not unique but emphasises the benefits particularly relevant and important to people in the debt review. The marketing focus is on building a network of licenced debt counsellors to provide them with referrals. There is a consistent message that demonstrates a deep understanding the unique insurance problems of clients in debt review and that the brokerage is, therefore, the best partner for Debt Counsellors. The advertising is very limited but appears regularly in the profession’s online journal. The brokerage is also actively and consistently involved in developing relevant content for profession’s trade media, and in their various activities and organisations.
Elliot explains that any brokerage or UMA can adopt a similar type of strategy. It’s just a matter of deciding what you’re going to do or say and, perhaps even more importantly, what you’re not going to do or say. The latter are the toughest decisions you take, because nobody likes giving up anything of possible advantage. But, there’s a law of sacrifice: if you want to own something, you’ve got to give the other things up. That doesn’t necessary mean you don’t do them in addition and behind the scenes as long as they don’t dissipate from the delivery of your core promise, but that’s not your message.
Elliot gave an example of how you can be seen to be different even when you’re not. One of his advertising agency clients many years ago was furniture retailer Morkels. Morkels was your ‘two year guarantee store’ for many, many years. Critically, they weren’t the only retailer offering a two year guarantee. But they single mindedly and consistently went out to own the idea of a two year guarantee. And it worked. If a two year guarantee interested you, Morkels was definitely on your shopping list. If it wasn’t important to you, it didn’t matter. It didn’t even matter if it was not important to most people. You don’t have to target 100% of the market to make money. In fact, doing so is usually a waste of money. What you have to be is the strongest player in a segment of the market to own it.
“That’s the essence of good marketing”.