Why saving 200 dollars on car insurance works for buyers - Showtime Digital

Why saving 200 dollars on car insurance works for buyers

29 April 2019 Read 310 times

Here’s a challenge. What if you’re selling personal car insurance and other supporting insurances like home insurance and caravan insurance and you don’t have the marketing budget of the iSelect’s and Youi’s of the world? 

Where does that leave you? Is it too late to win in this market?

This article will address this question and help you understand why saving $200 a year when buying car insurance works. 

But you can get it wrong, and many do. If there was any doubt in your mind about this then spare a thought for a household name in personal insurance. Even though they had a $200,000+ marketing budget per month they could only muster a 0.5% conversion rate. Imagine having a marketing budget and only converting 1 in every 200 people that visited your website. Ouch!

Let's look at Youi

Just so you’re aware the previous comment was not in reference to Youi.

If you’re going after the exact same consumers as the larger personal insurers, such as Youi, you need to ask why Rebecca, Sandy, Michael and Tracy (Image1) would choose you over such a well-advertised and dependable player.

Image1

As you can see the common outcome for these four people is, they saved a few hundred dollars. Let’s face it no-one wants to pay for insurance but what the major insurers know is their buyers look at money simply in terms of, ‘it’s better in my pocket than in yours’.

The belief system of buyers can be seen in their patterns of purchasing. For example, this same buyer may purchase petrol from Caltex to save 6c per litre. They can get the same petrol from BP, but each week people queue up for 8-10 minutes to save 6 cents a litre.

Have you ever done the numbers on this (Image2)?

Image2

If you owned a Toyota Camry and filled up at Caltex rather than a competitor each week, annually you’d save $156.

But, if you waited in the queue for 8 minutes with each fill, annually you would waste 7 hours (a full day of work). Considering Australia’s minimum hourly rate of $17.70, your 7 hours would be worth $122, and you’d save $33 per annum.

Oh what a feeling.

 

No, it doesn’t make sense to me either, but the point here is the insurance buyer could also be the same buyer of fuel because of their belief system.

While my goal is to not to belittle the logic of these buyers, it does highlight the emotional reason for the purchase.

Car Insurance is emotional, not a logical purchase

That’s the key here, we look at it from the logical perspective of the buyer saving money and we can dismiss the deeper reason for the purchase. What underpins the purchase is a belief system the buyer has carried around with them, maybe since childhood.

The trigger may have been when dad would say, ‘money doesn’t grow on trees’. Or your parents made you eat all the food on your plate because they remember a time when they went without.

These beliefs create deep, entrenched feelings and these are what companies like Youi are keying into.

Creating your own buyer persona

Let’s look at a buyer persona a personal insurer wanted to find online.

Image3

Sarah was one of several buyer personas. Sarah may be very similar to Youi’s purchaser, Tracy. From this information we were able to visualise and build a healthy respect for the buyer and empathise with them through the buying process.

The buyer persona comes in two parts. The known attributes and the unknown motivations. What you are seeing in Image3 are the known attributes. An Unknown motivation may be the belief money doesn’t grow on trees.

Both Tracey and Sarah may come from different parts of the country and have different known attributes but what we are wanting to do from this exercise is -

  1. Determine common traits within the different buyer types.
  2. Define the motivations of a purchaser.
  3. Create an effective channel strategy to find each buyer.


If you want to create your own buyer persona download this buyer persona eBook.

 

 

Steve Palmer

Steve Palmer is the Joint Founder and CEO of Showtime Digital. Steve has been in B2B sales since 1997 but influencing people and behavioural science has been a long-term passion.

The magic he brings to his clients is in knowing how to engage their audience. His goal is to help businesses understand the deeper reasons of why consumers convert online with them.