• by Cory Treffiletti , Featured Contributor, July 8, 2009

Every once in a while you notice something new that makes your scratch your head and think.The most recent example of this was when I witnessed a number of brands running TV commercials  featuring an iPhone application and nothing else. But what I find most surprising is that the least-expected brands are the ones using this strategy to connect with a consumer! 

Nationwide and State Farm are the two brands I've discovered piggybacking on the iPhone app space, with positive results. Both brands are promoting their own "pocket agent" type applications which allow you to submit a claim directly, with pictures and details, the moment you're in an accident. Both feature the iPhone prominently in their ads and both are running on TV with some support online as well.

The strategy appears to be to use the iPhone app to acquire new customers rather than just as a CRM effort, which is what you would expect. It makes perfect sense to promote the app to your existing customers and allow them to interact directly during an accident, but there's also a logic in promoting this wider than your existing base to position your brand as convenient and reliable in order to attract interest from other potential customers.

Esurance and Geico lead the insurance space with gimmicky, catchy, fun and engaging advertising. They've both latched onto popular culture as a tool to make themselves hip and relevant and done a very effective job. Esurance took its cartoon characters and aligned them with "Star Trek," while Geico tried its hand with a gecko and a caveman, but those brands have positioned themselves as fun rather than reliable, and inexpensive rather than convenient. They both sell on price and they both inundate the consumer with ads as a means of pummeling them into submission (count the number of Geico and Esurance ads you see on TV over the next seven days; it will be a staggering number). Nationwide and State Farm are much more aloof, more conservative brands in my humble opinion, but they're using the iPhone apps to position themselves as professional and convenient for their customers.

The strategy is a sound one; you may not need your insurance company to be fun and energetic. You really just want them to be reliable, dependable and easy to work with. The development and promotion of an iPhone application is an easy way to do that. Does it convince a consumer to switch without an overt request to do so? That remains to be seen, but it certainly raises the questions of "When will my insurance company have one of those?"

Positioning yourself as an innovative and reliable brand is definitely a long-term strategy, whereas price is a short-term strategy. How many times have you come to realize in life that you get what you pay for? Sometimes the inexpensive option comes at its own price, and sometimes that price is all too high. It's not until after you need the insurance company that you realize how unhappy you can be.

I'm not saying that any of the companies above are good or bad, but I am saying that very little of their advertising addresses the long-term goals of customer satisfaction and the process of submitting and managing claims in the way that State Farm and Nationwide are addressing them. Even if the total audience with an iPhone is far less than the total potential audience for these brands, aligning themselves on a position of reliability and convenience is a smart tactic for the future and it sets the precedence for the competition to keep up.

Of course the downside to using innovation in this way is that once you start, you have to maintain it -- and Nationwide and State Farm will now have to maintain focus on technology in order to stay ahead of the curve, doubtlessly creating apps for other platforms as well.

I took note of this strategy and I am curious when we'll be seeing other brands use the iPhone App space as a marketing tool, and whether Apple will get involved in allowing or approving these ads. Do they have to be involved or can they just let it happen, knowing that every one of these ads is inherently a free ad for their phones as well? Have you seen any other brands using the iPhone in this manner? Let us know by visiting the Spin board!