Progressive Targets Teens As Customers of Future.

Progressive Corp. said it's working to attract a fresh market that hasn't yet developed a brand preference in auto insurance. The company is setting its sights on 14-year-olds as customers of the future, says Glenn Renwick, the company's chief executive officer of insurance operations.

"When charged with running a company, you have to know what your customers are going to look like in the next four to five years," Renwick said. "You must take into account what societal changes have occurred. Today's 14-year-old's life revolves around the computer--online chat rooms and research for school--you have to expect how they will interact with financial-services companies."

At a March meeting with Wall Street analysts, Renwick said that historically, a younger customer's brand preference is whatever insurance his or her father had. "We have to break that chain, and we have to break it early My concern is how 14-year-olds are going to buy, how they are going to service their policy and how they want to get billed," he said.

Currently, 25% of Progressive's auto insurance policyholders are age 16 through 24, while 29% fall into the 25-to-34 age bracket.

One way Progressive is working to capture the younger customers is its current TV advertising campaign, which highlights the company's online sales and service.

Analyst Mark Lane of William Blair & Co. in Chicago said Progressive was making a smart choice in anticipating how insurers will purchase in the future. "They are going after Net-savvy consumers who are confident about purchasing online and trying to capture them early," Lane said.

This strategy follows a marketing observation by branding guru Raymond Perrier, global director of brand value management for Interbrand.

Perrier said that while older consumers stick with their brands, their more market-savvy children are advising their parents about what to buy. "It used to be that you went to your father for advice on what product to buy. Now you go on the Internet and tell your father what you learned. They are teaching the older generation rather than investing in the past," Perrier said.