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How to compete in a saturated market! Today’s podcast is so important if you are trying to survive and thrive in a saturated market!
What do you do when you have a saturated market? What do you do when there are shark-infested waters?
We all would love to open a business where we have no competition, but this is what do you do when you have absolute competition all the way around you. How do you stay in business and how do you survive in that situation?
I’m going to share with you what you should do and I’m going to take you through the insurance industry examples of this, because they spend a fortune on marketing, and I think it’ll be easy for you to follow along with me.
If you watched TV, or get any digital ads, you have seen insurance commercials. We can see how each one of the big companies fights for their piece of the pie. I’ve always said if you could make one promise that you could deliver on to your target customer, would they chase you down for your business? That’s always been my philosophy. It doesn’t matter how big the market is, or how saturated the market is, or even how small it is. If there’s enough of a target customer, and if you could deliver on one thing that that target customer wants, and if they would chase you down for your business, that’s a business that will work.
To give an example, there’s Lloyd’s of London. They ensure things that nobody insures, like movie stars, ensure their looks, people ensure the body parts that they need like their vocal cords. I believe Marilyn Monroe, she had her legs insured.
Insurance is a huge industry and I’m going to share how everybody kind of carves theirs out.
I’m going to start out first car insurance and I’m going to share with you four companies and how they all fight for a different kind of target customer but they’re going about it in very different ways. Let’s focus on their branding position with the one promise that each one is trying to make, and you tell me if it attracts you.
Insurance Example 1: Allstate
Safe drivers save 40%. That is their value proposition. In their commercials, that’s what they’re trying to communicate. If you are a safe driver, you are our target customer, and you could save 40%. What all-state has done is say there is this massive ocean of drivers and they just want the ones. We want the good drivers, the ones with no points on their record. We know they don’t get in accidents, we know that in fact that our liability is going to be far less, but the money makes sense. Somebody like that, we can save them a fortune on their car insurance, and they have.
Insurance Example 2: Liberty Mutual
Liberty Mutual has come on strong in the last couple of years. They’re going to customize your insurance, so you’re only going to pay for what you need. They see this big ocean of people that need auto insurance. Basically, you can get higher deductibles and you pay more if you get in the accident. That’s their position.
Insurance Example 3:GEICO
I think GEICO made a massive mistake. Originally, for years, it was fifteen minutes can save you 15% on your car insurance. They really stopped pushing that in 2013. That’s seven years ago. They’ve come back to it a little bit now with we can save you 15%. And then they went away. Then they often said, a few years ago, we will save you hundreds of dollars on your car insurance. Why? Because fifteen minutes is too much time now in the online community. Fifteen minutes is forever.
So before where you were happy to get on a phone call and give up 15 minutes if you could save 15%, with moving that process online, they lost their speed advantage. They lost their value proposition because they’re not fast enough. They had to remove the fifteen minutes or at least they thought they had to. So they have gone all over the place with promoting that they’ve been in business 75 years, and one where they promote their great service, but I think their best campaign was we’re going to save to 15%.
Now you have All-State offering 40%, you got Liberty Mutual now saying they can customize your insurance, so I think GEICO is lost that unique, simple 15% offer.
One thing that GEICO does really well in their commercials is they do a pattern interruption. They do something like where they had like the caveman guy, and then the little gecko. They do something where they break your attention and then they pitch it.
I think over the last five to seven years, GEICO has had too many different value propositions. They’re not making that one bold promise they could deliver, the target customer would chase them down for.
Insurance Example 3: The General
Then you have The General. Shaq promotes the general. A totally different market. Who’s their target audience? They want the opposite of Allstate. They want high risk drivers/lower income, which is a huge market.
A lot of people under the 25 may have struggling driving records and there’s plenty of people that a higher payment and how that payment is paid would affect them. What they offer are lower costs and lower payments, and they’ll give you a quote in 60 seconds.
Insurance Example 4: State Farm
Like a good neighbor, State Farm is there!
They’re not competing on price. They’re going to tell you that they’re around at 3 o’clock in the morning if they need to take your phone call.
They want to target customers who just want reliability. When something happens, I want to know when I call you, that there’s not going to be any problems. This is going to be taken care of. State Farm has been beating that drum forever.
Insurance Example 4: Nationwide
Nationwide comes pretty close with Nationwide is on your side, and they use celebrities to promote their insurance. Peyton Manning and Brad Paisley. Different ways to get to segment to get their target customer.
Insurance Example 4: Progressive
They won’t even talk about car insurance, they go after some niches that nobody is going after. They go after renters insurance RV insurance, and now they got that half-man/half-motorcycle guy to go after a motorcycle insurance.
You can compete in a saturated market, but you have to be able to deliver on one promise that a target customer will chase after you and there needs to be enough of them. There needs to be a big enough market place to work for you.
I thought this would be a really good illustration of how you can do it, because I know we’re kinda all familiar with most of these companies, and each one of them is kind of a different way they do it. They’re digging up a very nice piece of the pie, they spend a ton on advertising, so clearly it’s worth it to them.
What we talked about today was how to compete in a saturated market. All of us want to have a blue ocean. This is just sharks everywhere, This is blood infested water, the insurance industry is.
You need to carve out your niche.