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Lisa Hronek Archive for April, 2010
Toyota brand still strong as sales zoom into the fast lane
Just seven months after a global recall of roughly 8.5 million vehicles, Toyota is enjoying increased car and truck sales. At the end of March, sales were expected to be 30-35% higher than they were last year. In the first ten days alone, sales surged a whopping 40% compared to early March 2009. Various incentives previously unheard of from Toyota, coupled with their effective catering to loyal customers have helped the company bounce back quicker than expected.
Some notable incentives include:
• Zero-percent financing for the first five years on its top-selling models
• The introduction of the “Toyota Auto Care Premium Package” that includes oil changes and other maintenance services for free over two years for the purchase or lease of any new vehicle
• Cash rebates ranging from $500 to $3,000 depending on the vehicle
Toyota made all the right moves to regain customer confidence and attract first-time buyers. The company admitted fault and was openly communicative with the press. They then made restitution with the aforementioned incentives to quickly resolve a crisis that might have left other competitors in dire straits. A crisis that could’ve ruined the Toyota brand and image seems to have only made the company stronger.
Are credit unions and smaller banks benefiting from the banking crisis?
According to the FDIC’s quarterly Summary of Deposits and numbers from CUNA, mid-sized organizations have been doing significantly better than smaller or larger institutions. They’ve also experienced approximately the same growth rate for deposits from 2008 to 2009 as credit unions. Smaller banks are not growing deposits, but what about credit unions?
According to American Banker, traffic has tripled on the National Association of Federal Credit Unions’ CULookup.com credit union locator site. This may in part be due to the initiation of the “Move Your Money” campaign (http://moveyourmoney.info/) at the beginning of 2010. However, credit unions are not picking up a significant number of new customers in the process.
According to Mintel’s report, Brand Perceptions of Financial Services Providers—April 2010, the number of consumers who state they have an account with a credit union has not seen a significant increase for respondents who had opened an account in the last year, when comparing survey results for January 2008 vs. December 2009. Further study is probably needed to determine whether credit unions are in fact benefiting.
One thing that is quite apparent is that trust has become significantly more important in the two-year period. This is an area in which both credit unions and smaller banks excel, especially when compared to larger financial institutions.
People are unhappy with banks, but are they actually willing to move their deposit accounts? Maybe not, but people are likely to start looking elsewhere for products that banks could have cross-sold, such as mortgages.
Auto insurance direct mail strategy: Progressive on hiatus
Progressive has all but stopped acquisition mailing. In 2009, they sent 90% fewer offers than in 2008. So far this year, Mintel Comperemedia has only tracked one auto insurance piece from Progressive. It was a card mailed by Florida Insurance Specialists to clients with a homeowner’s policy and offered a discount for Progressive auto insurance.
Progressive’s strategy to stop using direct mail is the opposite of GEICO, State Farm and Allstate, all of which have increased efforts. These auto insurance leaders have either maintained high mail volumes or increased mailings since last year.
GEICO, the largest auto insurance mailer, sends a letter as its top offer. Interestingly, it is not branded with any of the characters GEICO has developed. It does, however, have a call-to-action header: “Do not discard this letter without first visiting geico.com.”
Allstate and State Farm are next after GEICO. Each sends letters that feature a quote card, a box showing savings over the competition, and an agent’s phone number.
Maybe the reason Progressive has stopped mailing is because it is enamored with the overwhelming success of Flo and the Insurance Superstore campaign. But State Farm, Allstate and GEICO seem to be increasing direct mail alongside successful campaigns in other media.
How long will Progressive maintain reduced direct mail as part of its marketing strategy? Please contact me if you’re interested in exploring this idea further (DHayes@Mintel.com).