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Liberty Mutual Insurance - Marketing Plan

Essay by   •  January 20, 2016  •  Business Plan  •  9,044 Words (37 Pages)  •  1,973 Views

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Final Project – Marketing Plan

Mkt-500-X3195 Marketing Strategies 15TW3

The existing organization I will submit a service idea for is Liberty Mutual Insurance. Liberty Mutual is an insurance company that offers personal, business, and life insurance. Its headquarters is in Boston, MA and they have many offices located across the country and the world. It is a fortune 100 company with increasing yearly revenue over the past five years. “Since 1912, we at Liberty Mutual Insurance have committed ourselves to providing broad, useful and competitively-priced insurance products and services to meet our customers' ever-changing needs.” (Libertymutualgroup.com)

The auto insurance industry is slow changing and traditionally has little to no product differentiation. However, “…consumers' wants, desires, and expectations are changing faster today than at any time in the past. The industry must take faster action and examine the changes that are going on in consumers' lives so innovative products and services can be created that will help protect their financial future.” (2014 Big Idea) Price and service are ways an insurance company can earn a large market share. Pricing models are completed by actuarial departments and a customer’s background can affect price therefore the focus my product idea will be on the service side.

Have you ever been in a car accident that required your vehicle to be repaired? Depending on the service of your insurance company this can be added unforeseen stress to your life. After you file the claim, your vehicle is appraised and then you drop it off at your repair shop. Many customers don’t have a trusted repair shop and feel uneasy or in the dark during this sometimes lengthy process. With the new ‘Repair Watch’ service program a customer will receive photo updates, directly from the shop, of their vehicle’s repair progress. This will put customers at ease during the repair as constant communication and repair updates are sent via text or email with an online site for additional information.  The online site will feature an opportunity for a customer to give real time feedback (that can be addressed by the repair shop or insurance company) and share functionality through social media applications to cross promote the product while customers show off their vehicle’s progress.

  Per JD Powers customers value the quality of the repair work, how well they are kept informed of the repair process, speed of completing the work, thoroughness of explaining the work, and the repair facility employee’s responsiveness. Those attributes add up to about 71% of the overall repair process experience (JD Powers Research). Insurance companies struggle to keep customers properly informed during the repair process. Claims representatives in office do not have knowledge of the repair process and will need to call the shop directly for updates then call the customer. Also there is the possibility of either party, insurance company or repair shop, blaming each other for delays which ultimately results in a poor customer experience. Repair Watch will break down this barrier and give eyes to the customer on the repair process.

The competitive advantages for Liberty Mutual are exclusivity of the service for their customers and also improvement on internal costs. For example, with Repair Watch Liberty Mutual will be able to keep track and enforce timely repairs. This could decrease the amount of rental days for customers and ultimately decrease expenses for Liberty for customers with rental coverage.

There will be challenges with this new service. The biggest being shop adherence. If a shop does not adhere to updating photos and uploading them properly then the service is ineffective. The good news is Liberty has contracts with over 2500 shops nationwide. Liberty drives volume to these shops because Liberty guarantees their work for them. Based on this contract Liberty can enforce certain measures and expectations of the shops. Other challenges may include too much contact with the customer. We would want an opt-out option for the customer of the repair status updates only (we still want the customer to receive other claims updates). Price is always a challenge with a new product. We would offer this service for free to our customers, but there would be an internal cost to Liberty. If the cost of the operation outweighs the benefits to the customer then profitability of the company will decrease. A strict budget will be imposed and execution of the pilot phase and rollout of the product must be efficient.  Lastly, a customer with insurance may never have a claim to experience the product come to life. Although Liberty is generating a profit off of that customer they may leave due to competitive pricing and not being able to experience our outstanding service.

To create a great mission statement we must first understand what a mission statement is. “A mission statement is a statement of the organization’s purpose –what it wants to accomplish in a larger environment. A clear mission statement acts as an “invisible hand” that guides in the organizations. (Armstrong & Kotler pg. 39) A mission statement should also answer basic questions about your company.   Here are four essential questions your company’s mission statement must answer: What do we do? How do we do it? Whom do we do it for? What value are we bringing? (Answer 4 Questions to Get a Great Mission Statement (Forbes))

A mission statement should be market-oriented as opposed to just product oriented. For example, an insurance company mission’s statement should not just be “We sell insurance products of all kinds to customers that need them.” Also a mission statement should not be confused with strategy, goals/objectives, and execution. “Objectives and goals are also whats, not hows, but they are smaller than a mission. There can be a number of objectives and goals to be achieved in order to achieve a mission, but there is usually only one mission.” (Mission vs Goals)

A good mission statement might be difficult to achieve when you work for the company. It is easy to get into the details of what a company’s goals or strategies are when you are bogged down into the everyday details. A mission statement should be the basic core of what your company does and what its’ goals are in the big picture. Liberty Mutual’s mission statement is as follows:

“Our Mission is to help people live safer, more secure lives by protecting the assets they value most.”

The mission statement answers the high level questions; What do we do? How do we do it? Whom do we do it for? What value do we bring?

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