Auto insurance is not the most sexy purchase you can make as a consumer. It’s one of those “must have’s” and often its hard to differentiate the pros and cons between major insurers to make a decision.

I’ve admired the advertising creativity from Allstate and Progressive over the past year or so. Dennis Haysbert has put an incredibly trustworthy and down to earth face on Allstate’s brand and their ads have ranged from serious to funny, all effective in their own way to communicate Allstate’s brand promise.

And, who doesn’t like ditsy Flo, the Progressive girl, complete with her tricked-out name tag?

State Farm, the biggest of these competitors has been strangely quiet. Big Red offers not only insurance but banking and investment services through their State Farm Bank group, but for some reason has kept their light, comparatively speaking, under the bushel basket.

Progressive has launched a new campaign to pitch Loyalty in the past month and I’ve seen splashy print ads in USA Today and ESPN The Magazine touting “We Like Long Term Relationships”  and announcing rewards for new and existing customers alike.

I have to smile when any big brand chooses to put the “L” word front and center in their advertising. Customer Loyalty remains front and center with customer facing businesses, large and small and there is growing realization that growing a satisfied customer base and keeping them around for an extended time drives fundamental business and shareholder value.

I also have to let you know that Progressive’s program is a Loyalty program with a little “L”, and deserves a smallish Loyalty Asterisk™ for its manner of expressing its value proposition to consumers (i.e. calling benefits commonly offered across competitors a Loyalty program). Dig in to their web copy and you will see that they offer a myriad of tenure based and other discounts, not unlike what Allstate has been touting for the past few years and a similar package to those I have earned with State Farm, having been a client for over 25 years.

The difference? Progressive is the only of the top 3 insurers to use the “L” word and as such, makes it so.

The range of options to execute a Customer Strategy to develop and nurture brand loyalty has never been greater. They have always existed, but with points-fatigue on the rise and consumers demanding transparency and value, every brand should evaluate the Big L and the Little L as they form up a go-to-market plan.

That’s the best way to get yourself a tricked-out Loyalty program.

Regardless of your hobby, profession or even your belief system, these days it’s easy to find a group of people just like you. Go to online community organizer Ning and you’ll discover over 1 million communities, for everyone from sand volleyball enthusiasts to landscape architects to supporters of the Kwam Um School of Zen.

Now it seems more and more companies are getting into the act, especially those focused on the Gen Y (Millennial) market. From game maker Xbox to the Vans shoe company, companies with true-blue followings have created thriving online meeting centers where the devoted can exchange ideas, discuss products, solve problems and even schedule meet-ups.

But while social communities can work for some brands, it definitely feels like a stretch for others. So upon learning that Allstate had joined the fray with its Good Hands Community, I was skeptical. After all, who wants to join a community sponsored by an insurance company?

Yet, even before looking at the site, I saw how it might work—if Allstate didn’t stray too far from its core area of expertise, insurance. The Good Hands site could be a place where customers could engage with agents on insurance issues, from making sure they had the right coverage and deductibles to learning how to adapt policies to life changes like a new car, new house or new baby.

But the folks at Allstate appear to have set their sights on a much wider mandate. As the Good Hands Web site states, it’s a community where you can “share your thoughts with others about hopes, dreams and challenges. Together you can share ideas about keeping families safe, saving money and preparing for what’s next”.

The community home page feels a little more down-to-earth with menu categories that include “Making a Difference”, “Daily Spending” and “Personal Finance”, and discussions on “helping others” “stay-cations” and “living debt free”. It’s all well intentioned, but the topics feel a little off-base for Allstate and better suited for the Peace Corps, AAA or Capital One respectively.

For auto insurance policy holders, there is a category on “All Things Wheels”. But I can’t seem to find any discussions on auto insurance, as posts are concentrated on issues like checking my oil, being alert at the wheel and hybrid automobiles. How about helping me figure out how much collision I should carry on my 8-year old Saturn?

The other thing that doesn’t feel right is there is not an insurance agent to be found on the Good Hands site. You see, the chief bloggers and hosts of the community are Allstate employees Ben and Amit who are both identified by the title “Strategy and Content Manager”. No offense guys, but I think Allstate policyholders would prefer to communicate with honest-to-goodness insurance agents.

So overall, a kudos to Allstate for the effort. It’s a nicely designed site that really is trying to engage with current and potential customers. But let’s not forget, you’re an insurance company. And with so many potential communities for people to join these days, it feels like Allstate may be stretching its good hands a little too wide.

Final note: For a company that does an online community right, check out Intuit. Its Intuit community connects customers with small business owners and features discussions hosted by Intuit-sponsored business professionals. The Intuit community keeps the focus where it belongs: helping small businesses succeed.

Tom Rapsas is an independent Creative Director, Writer and Strategist. He can be reached at tomrapsas@gmail.com.

Until very recently I worked on the acquisition side of an auto insurance account, where  these days it’s all about the price—with virtually every auto insurer claiming they can save you $400 or $500 (which makes you wonder, if everyone can save you money, which companies are ripping people off?).

But perhaps the most eye-opening aspect of auto insurance marketing is the lack of respect paid to retention. After all, if you believe the accepted adage that for every $10 spent to acquire a new customer it takes only $1 to retain an existing customer—why are auto insurers plowing so many millions into acquisition and spending next to nothing on retention?

It’s especially important to have a retention strategy these days because of the changing relationship between auto insurance buyer and seller. Once upon a time, most drivers had insurance agents who they had a one-to-one relationship with—but now, with independent agents becoming a shrinking breed, and with the rise of direct-to-consumer providers like Geico, 21st Century and Esurance, times have changed. Most customers have no interaction with their insurance company, unless they have an accident or are mailing in their premium check.

Seems to me it’s time for auto insurers to take a fresh new approach to retaining customers, one that begins building a relationship well before the auto policy is about to expire and the customer can be swayed by the latest “you can save hundreds” TV commercial.

Thought one: Adding a message on a bill insert, while a no-brainer, will do absolutely zilch to build a relationship with best customers. What’s needed is a more robust approach that includes a regular stream of print and/or e-mail communications with relevant information drivers can use like:

• Invitations to online or offline tutorials on choosing the coverage right for me and my family
• Info on safety recalls and maintenance tips for my particular vehicle
• Safety advice for teenage and senior drivers on my policy
• Reminders of why my insurer is the right choice and what it offers that the competitors don’t

Thought two: Start engaging via social networking tools. With people so often confused by their auto policy details (collision? comprehensive? low or high deductible?), it seems like there’s an opening for an auto insurance provider to become the online source for honest, helpful information. So who will step up?

While some auto insurers are moving in the right direction by gravitating toward the communications opportunities offered by Web 2.0, many of the executions are weak at best and some companies have chosen to do nothing at all.

A few quick observations:

• Market leader Geico barely exists in the Web 2.0 world unless you want to count a blog for the Miss Geico offshore racing boat—and a few “Screw Geico” entries from unhappy customers out in the blogosphere. Kash, the bug-eyed stack of money that stars in Geico’s goofy TV commercials, does have a Twitter account—but has just a single tweet over the last 4-months. (Kash may be the quiet type, but one tweet?)
• Esurance icon Erin, animated hero of the company’s television commercials, has her own blog on the company Web site—but after a fast start in 2005, it seems like Erin may be all blogged out—she has a woeful total of three blog entries in 2009. (Is she busy on a TV shoot? Have her write from the set!)
• Then, there’s Allstate. Very active with Twitter, they appear to be doing a bang-up job of responding quickly to customer comments and concerns. They also appear to be the only insurer to set up an online community which can be found at goodhandscommunity.org. The community gets an A for effort, but the execution?

In my next post, I’ll give it a full review … to be continued.

Tom Rapsas is an independent Creative Director, Writer and Strategist. He can be reached at tomrapsas@gmail.com.