Branding a new social norm: social media is the newest tool for insurers to shape their brands and distinguish themselves from their competitors.

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When Progressive wanted to ring motorcycle enthusiasts together in a new way, it turned to Facebook, the free-access social networking Web site.

Not only has that created a place for bikers to share photos and talk about local rallies, but it's also another platform for Progressive to market its motorcycle insurance coverage and enhance the company brand name.

Progressive isn't alone. A growing number of insurers are turning to social media as a branding tool to reach mass audiences.

In September, Facebook announced it crossed the 300-million-users threshold. And, a recent eMarketer survey estimates Twitter users now top six million. Other online communities, such as MySpace, YouTube and Bebo, also are seeing a monthly surge in usage.

Social media is no longer something carriers can ignore, said Bruce Foudree of Locke Lord Bissell and Liddell

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These social media outlets are becoming a proven branding mechanism. eMarketer found that more than half of social networking users have become fans or followers of a brand online--and users are more likely to say something positive about a brand than something negative.

And, added Equation Research's 2009 Marketing Industry Trend Report, within the next year 82% of brand marketers will be using social media to promote their brands.

The problem is, the report found, 37% of brands still don't know enough about social media to know where to begin.

That's a sentiment also expressed by some insurers. "But carriers don't realize they are already participating in social media if their customers and agents are using it," said Tom Wetzel of Thomas H. Wetzel &Associates.

"The problem is [in] not becoming actively involved," he said. "Nonparticipation allows a brand to be defined by outside audiences and hinders the company in working with policyholders and agents in shaping how that brand is portrayed."

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Making It Happen

Social networking is taking branding to new heights by offering quicker deployment and turnaround of information, a generally cheaper platform than traditional marketing media and a way for positive conversations about a brand to spread more effectively. "Companies talk to clients, who talk back and then talk with other potential customers," Wetzel said.

Social media marketing also has the potential to send visitors to Web sites without traditional advertising methods.

And, added Wetzel, "it's a compelling, colorful medium that offers companies the opportunity to tell their story in a more subtle, incremental way."

So how do carriers, in an industry historically known to lag behind technologically, unleash the power of social media to brand themselves?

"They need to create a brand that stands out among others, while also building trust," said Wetzel. "Messages being sent need to be consistent and generate action."

According to Crystalyn Stuart, word-of-mouth services director for Imre, "Brands are now recognizing they have an opportunity to communicate directly with customers and build some additional channels to supplement their traditional marketing and PR initiatives."

"It's really about relationships and the opportunity to use existing channels. Social media offers an unpaid, editorial-style addition to carriers' media relations campaigns," she said.

But Wetzel cautions carriers against using it as an advertising tool.

"If you put up an ad, it will just sit there," he said. "Social media is about being involved in the conversation, about things policyholders care about that have an effect on you as a company. Everyone cares about being safe drivers and getting good gas mileage. Insurers who address that are part of the discussion. When it comes time for someone to get auto insurance, they'll recall the conversation and the carriers' brand will come up."

Progressive is "holistically" branding itself on communities such as Twitter and Facebook, said its Web Experience Director, Matt Lehman. Along with disseminating information, directing users to progressive.com via social networks and posting commercials on YouTube, it's also targeting niche demographics.

The company recently organized a Twitter "pet chatter" with a pet expert who tweeted answers to consumers' questions. "It was an opportunity to not only talk about our pet insurance coverage but brand the company name," he said.

State Farm is taking similar steps. One example is its partnership with mommycast.com that addresses parenting issues and offers mothers an online forum to share their experiences. It's cobranded by State Farm and allows the insurer to highlight its products and services specific to that demographic.

Reaching Out

"Social media should support companies' other branding efforts, like their overall customer service philosophy," said branding expert Nick Nichols of public relations and Internet branding firm LVPR.

"They can respond instantly to customer service complaints to demonstrate their concern for customers. It's a great way to counter negative issues raised online."

Social media "enhances the brand in many minds because users see us as an innovator that uses new tools such as Twitter to service customers," said Progressive's Lehman.

"If a customer raises a service issue, we can reach out to them in real time and route them to someone to take care of the situation."

Because this is new territory for most businesses, Nichols said companies "walk a delicate line between being social (disseminating information and answering questions) and being commercial in promoting products and services."

Insurers also must realize "the balance has now permanently shifted from them to customer," he added.

Stuart said every insurer should be doing what she calls "reactive use" of social networking." Consumers, risk managers and others talking about insurance issues are starting to use social media resources like forums, communities and blogs for customer-related issues."

She added, "While it's nice to have a Facebook page, the real need is to support B2B and B2C customers through these channels. The question is: How can we as a brand do this in an efficient manner to protect our reputation and work within what we already built as proactive customer support?"

While some carriers are embracing social media and training agents on its use, "others haven't yet sensed its urgency," said Wetzel.

"Carriers need to participate sooner rather than later. As social media continues to grow, it will he that much harder to shape and defend their online brands," he said.

But insurers must plan carefully, he warns. "Social media doesn't replace other communication programs but amplifies and extends them. You don't want to get into it for the wrong reasons or use it if it doesn't reflect well on the company. By starting out slowly, companies can figure out where they're headed with it."

Stuart is optimistic that the industry will see more brands "recognize the importance of having someone on their marketing staff dedicated to managing social media outreach. And the relationship between customer and brand will be facilitated by online channels."

* State of the Market: A growing number of insurers find that social networking sites are a great way to enhance their company's brand,

* What's Being Done: Carriers are developing guidelines or policies to address social media and prepare for potential situations or liabilities.

* What Lies Ahead: Social media will continue to support carriers' overall marketing strategies.

Learn More

Progressive Group

A.M. Best Company # 19731

Distribution: Independent agents and direct over the phone and via the Internet

State Farm Group

A.M. Best Company # 00088

Distribution: Exclusive agents

For ratings and other financial strength information visit www.ambest.com.

Watch a video about this article on bestreview.com/videos

Security Guards

While social media helps carriers' branding efforts, opening themselves up online isn't without some risks.

"One problem is that anyone can write on your wall," said Tom Wetzel of Thomas H. Wetzel & Associates. Therefore, it's important for companies not to lose control of their brands online, he added.

Unfortunately, that's a path many brands have already gone down, said Terry Goleswcorthy, president of the Customer Respect Group. That's why carriers need to set up a monitoring process, he said. "You can see nearly everything being said about you. The question is who deals with those negative posts."

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Services such as Google Alerts are designed to help companies monitor how their brand and reputation are being perceived. Because "the Internet is forever," said branding expert Nick Nichols with public relations and Internet branding firm LVPR, companies can't remove negative posts online but can use approaches like videos and testimonials to brand themselves and "suppress" negative comments with positive items.

Carriers also must address potential liabilities connected to social networking, said Bruce Foudree of Locke Lord Bissell and Liddell LLP. "Anytime you have an online community, there's the potential for defamation." And, he added, it's hard to maintain privacy on social media because of the way messages are communicated or recommunicated.

Insurers must protect their intellectual property and be careful not to violate insurance trade practice laws, Foudree said.

Carriers also must secure their online identities in multiple networks. The social media world is full of scammers waiting to use companies' brand names and identities for their own gain. That's why insurers need to be proactive and secure their brands across key social networking sites.

"The key is for carriers to monitor what's being said about them and their brand and respond in a timely fashion," said Wetzel. "Those that do tend to defuse problems if consumers feel they're being heard."

"While it's impossible to avoid all negative commentary, listening and being aware of what's being said allows you to quickly respond," added Matt Lehman, Web experience director for Progressive.

"Negative feedback is sometimes hard to hear but it's important because it can highlight hidden problems and allow companies to reach out to individuals with any larger issues that may arise."

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The Marketing of Insurance

When: Thursday, Nov. 5, 2009 Where: The Westin New York at Times Square 270 West 43rd Street, New York, NY 10036

imas

The Marketing of Insurance

When: Thursday, Nov. 5, 200

Where: The Westin New York at Times Square 270 West 43rd Street, New York, NY 10036

2009 IMAS Sessions:

"inside the Guide to Insurance Marketing," presented by Lee McDonald and Chris Sharkey of A.M. Best

"Soft Cel: Inside the Marketing of Esurance," presented by John Swigart of Esurance

"Maiden Voyage," presented by Brad Loescher of Maiden Re and Jill Howell of Newhall Klein

"Tying the Market Function to the Business," presented by John Parker of Zurich North America 

"Talking the Talk to Those Who Walk the Walk: Marketing in an Insurance Environment," presented by Reg Pierce, The Bailey Group; Gary Kimball, Kimball Communications; Terrie Piell, A.M. Best

"Emerging Trends in Digital Marketing for Insurance," presented by Susan Engleson of comScore

"Who's Marketing Where," presented by Jon Swallen of TNS Media

"The Trouble with Social Media," presented by Bruce Foudree of Locke Lord Bissell & Liddell LLP and Tom Wetzel of Thomas H. Wetzel & Associates

"Setting Social Media Policy," presented by Crystalyn Stuart of Imre

* Sessions and speakers are subject to change without notice.

Establish Guidelines

Creating a successful social media presence begins with establishing policies or guidelines, said Bruce Foudree of Locke Lord Bissell and Liddell LLP.

"Companies need to update internal communications policies to address social media," he said.

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"Guidelines also need to reflect who the company is," added Tom Wetzel of Thomas H. Wetzel & Associates. "One of the characteristics of social media is authenticity. If you have an authentic message, consumers will respond."

"Anything you do or say in social media is a representation of your brand," said Crystatyn Stuart, word-of-mouth services director for Imre. "A social media policy brings targeted audiences together to create an overall strategy. That gives people channels to use on a tactical basis."

Employees and agents also need to be trained on social media guidelines. "Some agents am just being told to set up a Facebook page," said Wetzel. "But that's not necessarily productive if they do not know how to use it effectively. Companies that define clearly how they will use social media can collaborate with agents in efforts that benefit both. Training can reduce the potential for liability problems."

While most insurers "are saying they have to be here, they don't quite know how it affects them yet," said Terry Golesworthy, president of research and consulting firm Customer Research Group. "They have to go out, create fans and offer incentives to become one."

That's paying off for USAA, for instance, which now boasts more than 30,000 online fans, he said. "When the company recently introduced a new iPhone app, it sent information through Facebook. Fans forwarded that on to others, thus creating a viral pathway."