Jump On The Bandwagon

Thursday 17 November 2016, 12:00 PM

Tom Baigrie
CEO , LifeSearch

Last month I noted that my business is finding that consumers generally are more easily engaging with our efforts to explain income protection than they were.

We have an idea as to what’s causing that happy change.

To follow our logic you must first realise that at any one time the number of consumers with any interest at all in buying protection products is very small and none of those really want to! So to get people interested in even thinking about it is a real challenge.  

The scale of that challenge was so clear to me that some years ago I tried to get the whole industry to join up and spend £5m or so a year on increasing consumer awareness. 

While all were kind enough to take me seriously the idea was voted down by the biggest players, who felt their smaller competitors would enjoy disproportionately more benefit just from increased awareness of their little-known brands relative to those the most famous. 

But one of those smaller competitors went it alone. Vitality’s approach of linking a now globally successful rewards scheme to healthy lifestyles has created an entirely new set of profit metrics to those the rest of the industry must still use. 

They’ve courageously allied that to a brand and awareness spend vastly bigger than I dreamt of and in a wonderfully contrarian stance, invested in building up the biggest tied agency and IFA account management team in the market, just when their competitors did the opposite. They’ve also built a very different product set.   

Ask any marketer what results from having a very positively thought of brand offering a well differentiated product through an energetic sales force all supported by a very successful loyalty scheme, and they will tell you that it’s real success through pricing power allied to rapid sales growth. The win-double! 

But Vitality’s success helps the rest of us too.  Thanks to their ongoing large scale media campaigns many more consumers are engaging with the idea of health and life insurance, many more in fact than go on to buy a policy from Vitality. 

Increased consumer awareness of messages linking protection to fitness, fame and even movies and funny dogs makes all our lives easier. And as the Vitality message is all about health, so it is that income protection is enjoying far more of the halo effect than its lowly historic sales might lead one to expect.

Then there is the 7 Families campaign which has got many more financial and mortgage advisers talking about income protection. I’ve noted above that consumers’ personal interest in protection is transient. But those times do often coincide with when they want to talk to an adviser; and while advisers who would talk protection were getting ever rarer, nowadays consumers have an ever improving chance of bumping onto one. 

In short an improvement in supply-side behaviour is meeting an improving buy-side attitude. The combination is how a bandwagon gets rolling. Do jump on it.