The eSurance Campaign – Pass or Fail

The eSurance company launched a marketing campaign around the Super Bowl. They purchased the first commercial after the end, and reported (part of the commercial) that in doing so it saved them 30% of the cost of a commercial during the game. They then said they would give that savings to one lucky person. They would chose that person at random based on Tweets using the hashtag #EsuranceSave30.

Tweets could be sent until 1:00 am PST Tuesday morning at which point the contest ends & a winner would be chosen from the qualified entries. Some reports had the number of tweets using this hashtag after that commercial in the 1.2 million range. That would not surprise me at all given I put a column in my Tweetdeck for the hashtag & the thing ran non-stop (this was Monday – the day after the commercial). I searched for the total number, but haven’t seen a updated piece yet.

This brings up a couple questions in my head:

  1. Isn’t the goal of a campaign to ultimately bring in new customers?
    • If so, what is the cost of acquisition for this campaign?
    • What is the cost of acquisition in other methods & compared to this campaign?
    • Bottomline – does it make sense to even use the super bowl or could other means produce same/better results.
  2. How does the brand engage its new found followers?
  3. What does the brand do to continue the momentum? – keep the ball rolling

 

I was also curious as to what the impact of the contest would be on their twitter handle. Since the entire contest was predicated on using Twitter, this isn’t too difficult to watch.

 

1. What is the Acquisition Cost?

eSurance said they were going to give away $1.5m which represented the 30% savings from having a commercial during the Super Bowl. This puts an ad during the Super Bowl at about $5m.

I unfortunately did not see what their total number of followers was before their ad, but as of 9:00 am CST on Monday they had 107,000 followers (an article had them at 8,900 before the commercial).  (I think the game was done around 9pm?)

I followed the number of users & tracked the rate of new followers. It went on at a pretty good clip through the morning with each hour gaining about 10k – 20k with the earlier hours closer to the top of that range & the later hours at the bottom. By 12:00 pm (noon) CST they had 190,000. Things slowed dramatically after that & by 3:30 pm they had about 220,000. As of 9:00 am Tuesday morning (after the contest had ended) they had about 259,000 followers. So for argument purposes lets say they gained 250,000 followers from the campaign. (The count was about 261,000 by 10:30 am – & they are going to announce the winner Live on Jimmy Kimmel on Wed, so the campaign could produce more.)

So, $5m (remember, they paid for the ad & the are giving the rest away) / 250,000 = $20 per new follower

I’ve never bought followers, so I don’t know if that is a good $ or not. For comparison though, the Budweiser Puppy started its Twitter profile on Friday before the Super Bowl & was actively tweeting to random people over the weekend. They only had about 12,000 on Tuesday morning. Their’s was “free” in that the commercial didn’t send people to Twitter that I am aware of. So for the cost of having someone staffed on the Twitter handle, they could build on that base & if done correctly they could get there.

If we want to figure out the Cost of Acquisition we have to start making some assumptions at this point. Really a table would work best here, but for our purposes I’ll just use some easy numbers.

How many of the new followers would sign up? How many of the people Tweeting would sign up (many did not follow, just Tweeted)? How many doing neither would sign up from the campaign?

I think a 1% conversion rate would be quite generous & thus easily capture all potential new users. That puts the new users around 2,500.

That means it cost eSurance about $2,000 for each new customer.

I don’t know if that is a good acquisition cost or not but we can do some other calculations to put it in context.

Based on a report from justice.org the insurance business is lucrative with Allstate getting about 45% of premiums as profit. Since eSurance is owned by Allstate, lets suppose they implemented their same claims strategy, but since eSurance is a internet lower cost strategy lets put their margin closer to the 10% range. (A report from blogs.rhsmith.umd.edu put GEICO in the 5-6% margin range). In my view a 10% profit margin would be a good average for any company.

So for a new customer paying $100 / month, eSurance would see (1,200 * 10%) $120 in profit. This means they would have to keep that customer for about 16.7 years just to break even. Ouch!

For giggles, lets pretend I am way off base (by about 100%). So they have 2,500 new customers and each pays $200/month and the margin is closer to 25%. That would be $600/yr in profit & it would take over 3 years for the company to make money. Oddly enough, in that RHSmith article it stated that insurance companies typically would need to retain customers 3-4 years for those accounts to become profitable.

So is $2,000 / new customer a good acquisition cost for eSurance? I’d guess not. Given the math that had to take place to reach the 3-4 year barrier I just don’t buy it. – FAIL
(obviously I don’t have access to eSurance’s internal numbers so everything is guessing)
(I’m also not in the insurance business so don’t know what the cost of acquisition through other methods is)

So does it make sense for eSurance to have launched this campaign? Only if their cost of acquisition in other methods is higher than what comes out as a direct result of this campaign. IE – money could have been spent elsewhere to produce better results.

 

2. Engagement – the what/when/how

There was sporatic engagement from the Twitter account to people who were using the hashtag. There were retweets, some replies, etc. When I logged in on Monday they were following about 285 other users. A lot of those users were verified accounts, so they weren’t really following normal users. Some of the interactions also seemed forced. The rules said they would DM the winner, so by default they would have to follow that person. They didn’t follow anyone new until the morning of Tuesday. This made it fairly easy to figure out a short list of people who could have one. As I am writing this at 5:00pm CST Tuesday, they still have only followed about 297 people. Most of those are verified accounts which I would suspect didn’t really enter. They followed about 10 or so accounts on Tuesday morning & several of those accounts interacted with each other asking each other if they were the winners. Obviously those that were interacting didn’t get a notification – just a follow. There was one lucky user though, which through a pretty quick search of activity could be discovered. I posted my prediction on who it was on the app Knoda, so we will see if I am correct. (The user I think won only tweeted the hashtag once, vs. thousands of times for the other 4 who were followed early, which is why I think his was picked – it provides a better narrative for the story “I only tweeted the hashtag once…”).

Is getting a reply or follow from eSurance a big deal? Eh. might make your day, & you’d retweet it out to your friends, but not exactly earth shattering. That to me isn’t engagement. I’ve seen a lot of better engagement from brands who engage in conversations with people. Some of these conversations are “gasp” not related to their brand at all, but just conversations the people they follow are having. This of course would require them to actually follow their prospective customers.

Potential:

What if eSurance had followed every one of their followers in the wee hours of Tuesday morning? Wouldn’t everyone who was followed by eSurance then begin an entirely new conversation? Sure a lot of them would say “what? let me see if they just followed everyone” and that would be it.  What having millions of tweets but only a couple hundred thousand followers tells us is that most of the people using the hashtag didn’t really know the rules & weren’t actively looking for reasons to not be the winner. If they had followed all their followers, the conversation of who the winner was could have been extended another day & raised the potential for new followers / users. (Although Super Bowl was still trending on Tuesday, eSuranceSave30 was not. But some people were still tweeting it as if the contest hadn’t ended.)

What if eSurance built on that initial follower base & started truly engaging their potential customer pool? Would you be more inclined to at least look at the eSurance site the next time you were looking for insurance if they were following you & engaging in conversations over the next year or two or three? Instead of using Twitter as another broadcast medium (just shout your message at people), maybe it could be used as an engagement medium?

Obviously I don’t have any numbers to back up that potential I explained, but I will tell you one of my experiences:

I was conversing with a friend who was taking her first trip to Vegas (2011 or so). She was staying at The Venetian (@VenetianVegas). She started following their acct & they followed back. She was tweeting that this was her first trip & was staying there. They replied with a “Welcome, glad you are staying with us…” type of thing. While she was there, she noticed that her sink wasn’t working properly, but she had to grab a shuttle before she could tell the front desk. She tweeted out that she loved the room, but her sink was broken but had to grab the shuttle & couldn’t tell the front desk. (she @’d the Venetian acct in the tweet). I replied to her (taking out the @) that they knew it was broken now, if of course they were following their acct & it would be interesting to see if they replied. They did reply to her & said not only did they see the tweet, but the sink was fixed & hope she enjoys the convention.

How often do I go to Vegas? Once or so every year or two. Its been 3 years & I still remember that engagement. Will it get me to stay at the Venetian? Their name is always at the top of my list when I start looking for rooms.

Scrolling through their tweets today I see a lot of “glad you stayed with us”, “hope to see you again,” etc.

 

So how are they engaging their new followers? They really aren’t. The fluff of “stay tuned on Wed for the live announcement on Jimmy Kimel” reply doesn’t really engage a follower. – FAIL

 

3. What does the brand do to keep the momentum?

They tried to push out their announcement for the Jimmy Kimmel show, but this could have been done better. As mentioned above, if they had followed everyone that followed them (and even some of the people who used the hastag but didn’t follow them) then tweeted out “Hey, remember, we can’t Direct Message you if you are not following us”. This could have pulled in more followers (with whom they could interact), as well as keep the buzz going about who the winner could be. Everyone would be waiting until the 1:00 pm EST notification deadline & then tweeted again after it saying they didn’t get a DM.

As I mentioned above, the Super Bowl is still a trending topic, but #eSuranceSave30 is not. Keeping the conversation going could have pulled them into another day of discussions. Would that result in more end users? Maybe, maybe not, but it wouldn’t have been a difficult implementation nor would it have been an additional investment.

I am sure there are plenty of articles mentioning the eSurance campaign so that helps somewhat here – they were original enough to get additional media play.

What will they do after the Jimmy show? No idea but given the performance so far I’m going to give it a pre-emptive – FAIL

NOTE: If I am incorrect on the Jimmy show / after stuff I’ll update this post.

 

Bottomline:

My unprofessional assessment of the campaign:

1. Fail
2. Fail
3. pre-emptive Fail

I’d guess they could have gotten more end users through a different medium or with a strategy that incorporated some of the ideas I mentioned. $5m + (remember they had to produce the commercial too) probably could have been put to better use.

 

Disclaimers:

Am I a marketing professional? No, I’m just a guy with a computer.
Do I know what I am talking about? That’s really subjective. If you agree with some of my ideas & conclusions, then yes, if you disagree then no. Take the information for the cost you paid to obtain it.
Do I have any reason to put Pass/Fail on anything? Not really.
Am I a clown on the weekends? No
Do I have eSurance? No
Will I? probably not – pretty happy not changing things
Do I run a social strategy or anything of the sorts? Nope
What about Facebook? Yeah, I didn’t do any searches there to find out if some people didn’t know you had to be on the Twitter.
Did you cover all bases? Absolutely not. Some assumptions were made as mentioned above, but the searches I did to find information didn’t yield as much as I’d hoped.

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