After nearly 30 years of being in the financial services business, I’m always amazed at how insurance and investment companies market themselves. Sometimes it seems that the companies with the poorest products are the ones that advertise the most.
Everyone knows that good advertising is a must for a successful business, and it’s no different for the financial services business, as well. Last time I checked, there were almost 4,000 life insurance companies in America. Some sell just property/casualty insurance or life insurance and/or annuities, but many sell both.
So how does an insurance company set itself apart from all the other 4,000 competitors? One way is to make a big splash on TV. I mean, if it works for Budweiser, Coca Cola, and Levi’s, why wouldn’t it work for insurance? However, in the game of marketing, they always tell you that you need to “target” market to your intended audience.
OK fine, but since everyone needs some type of insurance, doesn’t this mean the “Target” market is everyone? So, if we’re going to market to everyone, the next hook is to make sure we associate ourselves with something positive. This is where the Prudential half-time show comes from, or the Met Life sports report. Most people like sports of some kind, so it’s a good tie-in for the insurance companies. That’s why there’s hardly a major sporting event that won’t have some kind of insurance company involvement.
Some companies will just run a commercial during the event, while others will up the ante with major sponsorship status, or even go as far as sponsoring individual athletes or teams. Several major insurance companies have stadiums named after them, and some will spend millions of dollars on fringe sports like sailing in the America’s Cup race.
Of course, it goes without saying that if you have a blimp, you must have great insurance products as well . . . right? All this advertising and aligning with things we enjoy is nothing more than fluff for the insurance and investment world.
There’s absolutely no correlation between advertising and the true value of products and services that these companies can bring to your kitchen table. In order for a company to educate you as to the real advantages they offer to you, they would have to do 30- to 60-minute infomercials, and we all know that’s not going to happen.
I can’t imagine anybody’s life is that empty and boring, so why would they spend money on a program that nobody would watch? Besides, it’s not in their best interest for you to be educated. They would much rather you just trust them, because they have warm, fuzzy commercials, or they sponsor a sport that you love.
Retail products like cars, beer, food, clothes, and sporting goods are all things we as consumers are quite capable of evaluating. I can very easily do a taste test between Coke and Pepsi a few dollars and two minutes later, I can tell you which one is best for me. No need for zillions of dollars in advertising.
This, however, isn’t the case with insurance or investment products. You really need to understand all the complicated details in order to make the correct decision for you. This is why everyone needs a competent advisor who can help with this process.
From the insurance or investment company standpoint, they know that as long as they make you feel good with their advertising, you will most likely just believe that they will do right by you with their choice of products also. The simple truth is that there is no correlation between name recognition and having great products!
So the next time you see an insurance or investment company advertisement, you may want to do what I do. Listen very carefully and then have a good laugh, because they are just as silly and dumb as most advertising.