What Did we Learn from Progressives Social Media Misadventures?

Now that the dust has settled on Progressive’s social media ms-adventure, we can step back and look for lessons learned. The most obvious takeaway is that insurers, even those like Progressive with deep pockets, no longer can completely manage the brand’s message. The social media community touts transparency, authenticity and openness, but this is the insurance industry, it will not always be an option. Insurers will find themselves in impossible situations – constrained by confidentiality and regulation, unable to mount an adequate defense or manage the virility of the message.

That is not to say that Progressive did not do itself harm during the episode with some poor judgment and dubious tactics, but the bigger concern is the strategic defense plan not the tactics.

Social media has become a numbers game, with many insurers recruiting as many fans and followers as possible. The opportunity to reach completely new sets of consumers who might otherwise be hard to reach is compelling. According to Jay Beemer, business leader, marketing innovation, for Progressive, “Market entrants are young folks, and those people are watching less and less TV. That’s certainly part of our calculus, trying to get to those consumers when they’re making their initial insurance purchase.”

This digital marketing strategy does not take into account that we are in, according to Forrester, the “age of the customer” and dialogue is two-way, as Progressive has so painfully discovered. There is only one true social media defense – unbiased consumers. We know consumer product recommendations are trusted far more than brand marketing and the same is true for brand defense. Progressive’s own defensive statements in this case were pounced on, ripped apart and spat out by the angry social media mob. Again, some fault lies with Progressive with inappropriate tone and half-truths but it is likely that any statement was going to be mistrusted.

Most noticeable in the Progressive situation was the lack of unbiased consumers – there were virtually no brand defenders. Progressive were left hanging, without support of advocates or customers and the negative message build upon itself into a frenzy, unchecked by reason or debate. That is not to say that Progressive does not have plenty of satisfied customers, but they either lack brand loyalty or underrepresented in the social media fan base.

Social media is much like an NFL team; a successful team must have a good offense and a good defense. Insurers have in some cases focused on the offensive game plan to the detriment of defense and to continue the analogy, Progressive has just given up an interception for a touchdown.

The value of defense was clear in a case in April 2011. USAA had a problem with its mortgage product. Thousands of policyholders were adversely affected, with many complaining on USAA’s Facebook page. USAA acknowledged the situation but left their members to respond; thousands of policyholders, while not disputing the complaints, waxed lyrical about positive customer experiences. The crisis, at least on social media, was averted – the defense held.

The Progressive case should cause insurers to think hard about the role and effect of social media. It is imperative to recruit and engage true fans, trusted brand advocates who will be there in the inevitable time of need. This may mean fan count maybe lower, message reach reduced and brand message virility constrained, but it will reduce risk, and that must be dear to the heart of the industry.