BLOOMINGTON (Source Karina Gonzalez The Pantagraph, Bloomington, Ill.) – Insurance isn’t the easiest thing to understand, particularly for young people, but State Farm is working to change that.
State Farm’s collaborative foresight and innovation unit is working to make the insurance world — everything from student loans to college-savings programs and retirement accounts — more accessible for those in their 20s and 30s. Simply put, State Farm wants more young people as customers.
And with good reason: In recent years competitors such as Geico and Progressive have gained market share with their online products.
State Farm’s collaborative, now in its third year, includes 15 full-time employees who are dedicated to researching trends among youth and generating new ways of reaching them. Other State Farm employees also shoulder the task of developing ideas and are invited to submit suggestions for Internet marketing initiatives. When ideas are formed, dozens of other employees join the collaborative to make them happen.
Carol Csanda, director of strategic resources at State Farm and the main organizer for the collaborative, said the unit provides a way to make changes that will keep pace with trends and technology in order to compete.
Mike Seeborg, economics professor at Illinois Wesleyan University, said companies like State Farm that have followed a traditional business model are now facing obstacles in reaching youth.
“It’s an interesting challenge to continue to be a good neighbor and at the same time find new ways to find young customers,” Seeborg said.
Young people communicate differently, Seeborg said.
“As young people move into markets, they are moving in different ways than previous generations,” Seeborg said. “The Internet is a way of life. They communicate with each other with social media and increasingly they purchase through the Internet.”
The collaborative unit’s biggest initiative so far is the creation of the Next Door Cafe, a State Farm-run coffee shop where everything but the coffee is free. The cafe is staffed by 11 State Farm employees who are not allowed to sell any products, but provide free counseling sessions to individuals or groups in a class setting.
State Farm spokeswoman Missy Dundov declined to reveal the cost of operating the cafe, which opened in August in Chicago’s Lincoln Park neighborhood.
Brett Myers, program director for Next Door, said the initiative so far is reaching its target audience by partnering with community groups and offering free yoga and fitness classes, in addition to the counseling sessions. The cafe also hosts a variety of groups, including one for young moms and another for recent college graduates.
“And we are targeting people in early stages of life … we want to walk with them,” Myers said.
Dundov did not provide any figures for how many visitors the cafe has attracted or how many people have taken a free one-on-one counseling session, adding that the company is still compiling data.
Chicago resident Linda Domingo, 26, said young people in their 20s and 30s don’t respond well to traditional advertising because of the sheer volume of information they are exposed to daily on the Internet and mobile devices.
Domingo admitted she initially was skeptical of Next Door’s no-pressure approach and was under the impression employees would try to sell her insurance. Instead, she discovered the cafe is a “cute” place to sit down and have coffee, work, read, chat or simply people-watch, Domingo said.
She appreciates the effort and has returned there several times, she said.
“Insurance isn’t the sexiest topic, but I like that (State Farm) is finding ways to make it more accessible to people in my age group by doing things like offering free workshops in a setting that I feel comfortable in,” Domingo said.
Like Domingo, others have provided positive feedback on the cafe, Myers said.
Next Door’s profile on yelp.com, an Internet site that provides consumer reviews on businesses, has a 4.5 out of 5-star rating from 12 area residents who have visited. However, one visitor wrote that the numerous on-site cameras made him uncomfortable.
Seeborg said Next Door is a unique initiative within the insurance industry, which has relied heavily on traditional methods for reaching customers.
And much of the unit’s work is figuring out what kind of model will turn young people into State Farm customers, Csanda said. Many of the ideas generated are tested at Next Door, Csanda said.
“For us to stay relevant, we need to tap in and learn what’s important for them,” said Csanda.
In addition to Next Door, the collaborative unit has also created mobile apps that can be accessed by Android and iPhone users. For example, policy holders can pay premiums, file a claim or submit accident photos through State Farm’s Pocket Agent mobile phone app.
Another app, Driver Feedback for iPhone, measures a driver’s braking, acceleration and cornering trends and provides a rating per trip. A third mobile phone feature, the On the Move widget for Android users, aims at reducing driver distractions.
Next Door classes
State Farm’s Next Door Chicago hosts classes on a wide range of financial topics.
Following is the cafe’s current class listing:
• “I suck at ___” series: Classes are designed to assist financial amateurs with subjects such as budgeting, investments, insurance and income taxes
• AV club and ND book club: Includes film screenings, podcast events and book club meetings
• Lunch and learn: Attendees are invited to bring their lunch and learn about financial trends
• How-to series: Classes on how to write a business plan, thief-proofing an apartment, bike safety
• Just the facts: Classes that review 401(k) plans, auto loans and life insurance A full schedule of classes can be found at www.nextdoorchi.com.
SOURCE: Next Door Chicago
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©2012 The Pantagraph (Bloomington, Ill.)
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Source Karina Gonzalez The Pantagraph, Bloomington, Ill.
