Case 5-2
GEICO Makes Its Case for Savings and Service
GEICO [http://bi.galegroup.com/essentials/company/353455?u=tlearn_trl] is the number-four U.S. car
insurance firm, behind State Farm [http://bi.galegroup.com/essentials/company/272525?u=tlearn_trl],
Allstate, [http://bi.galegroup.com/essentials/company/290059?u=tlearn_trl] and Progressive
[http://bi.galegroup.com/essentials/company/307108?u=tlearn_trl], yet its $500 million annual budget for
marketing communications is by far the industry’s largest. GEICO uses this budget to great advantage
with a wide variety of messages in a variety of media to influence consumers’ attitudes toward its
insurance offerings, which include coverage for cars, motorcycles, homes, and recreational vehicles. In a
product category in which consumers do not switch from one brand to another without considerable
thought, GEICO’s communications give drivers something to think about and steer them toward positive
brand attitudes.
The company’s messages use strong arguments focusing on savings and service to get consumers
thinking about the cost of car insurance. Some of its comparative messages show exactly how much
money a particular consumer saved by switching from a competing insurance company to GEICO,
information that enhances the product’s believability. In a variation on this theme, many of its
comparative ads say that “fifteen minutes could save you fifteen percent.” This message encourages
consumers to calculate how much less they could be paying for car insurance if they were GEICO
customers. It also reassures consumers by telling them that making the switch to GEICO will be quick
and easy.
Every ad not only mentions the brand name but also gives GEICO’s toll-free phone number or its
website (or both)—a call to action for consumers to take the next step and get a free quote, read more
about specific types of policies, or contact customer service with just a click or a call, day or night.
Messages about GEICO’s high levels of customer satisfaction and brand loyalty have more credibility
because they are based on expert sources named on the website: The University of Michigan’s American
Customer Satisfaction Index and the Brand Keys Customer Loyalty Engagement Index.
To support its aggressive expansion into motorcycle insurance, GEICO recently set up
MyGreatRides.com as a social networking website for motorcycle enthusiasts. The idea is to provide an
online forum for motorcycle owners to post upcoming events, exchange views about favorite bike brands,
and show off their tricked-out rides. Although the GEICO brand is nowhere to be found on the website,
the company sees it as an investment in learning how consumers think and feel about everything related
to their bikes, including insurance. “If we can learn more about the needs of motorcycle riders and what
kind of service they expect, we think it will help us with our current customers and potential ones,” says
GEICO’s director of motorcycle products.
GEICO’s Corporate Community Citizens program fosters positive consumer attitudes through the
company’s involvement with local causes and organizations. Not only does GEICO donate money to
nonprofit groups all around the United States; its employees also volunteer their time for causes such as
Habitat for Humanity home-building projects, Bikers for Tykes motorcycle rally fundraisers, and Big
Brothers/Big Sisters activities. One of GEICO’s many auto safety initiatives is the Safety Belt Poster
Contest, in which school-age children submit artwork for posters that remind drivers about the importance
of buckling up for safety. Local efforts such as these link the GEICO name with worthwhile causes that
touch an emotional chord with consumers.
Despite increased competition from its larger rivals, GEICO’s approach to marketing car and
motorcycle insurance has been extremely effective. The company currently serves more than 7 million
customers and, according to J.D. Power & Associates studies, enjoys high brand awareness as well as the
highest new-customer acquisition rate among the major insurers. Watch for GEICO to keep driving
toward higher market share by reaching out to car and motorcycle drivers all over the United States.
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Case Questions
1. Does GEICO appear to be using marketing communications to change consumers’ beliefs, change
their evaluations, add a new belief, encourage attitude formation based on imagined experience, or
target normative beliefs? Explain your answer.
2. What role does source credibility play in GEICO’s marketing communications?
3. Do you agree with GEICO’s decision not to show its brand on the MyGreatRides.com website? How
do you think this decision is likely to affect the website’s visitors’ attitudes toward GEICO?