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Amica Shifts From Word-of-Mouth Referrals to 18-City Mailing

In a major marketing strategy shift, Amica Mutual Insurance Co. is testing a series of mailings that mark the beginning of a prospecting effort that ultimately will target 18 cities in mostly new markets.

The first test was mailed late last month and included 10,000 pieces each in Albany and Rochester, NY; Portland, OR; Knoxville, TN; and Milwaukee. The lists came from two undisclosed sources. Amica plans to roll out a mail campaign of undisclosed size in late July.

Though Amica, Lincoln, RI, consistently receives top customer-service ratings from Consumer Reports magazine, the $2-billion firm has had a long-standing policy to rely mainly on word-of-mouth referrals for new customers. Market forces, however, are changing that philosophy.

“First, we need to grow in the Midwest and Northwest strictly from a spread-the-risk standpoint,” said John Connors, vice president of marketing at Amica. “A hurricane could come up the coast, and we'd be wishing we had more [policy holders] in Minnesota.”

Amica has 40 offices nationally, but its policy holders are concentrated mainly on the East Coast from Virginia through New England.

Two other factors driving Amica to advertise are that auto-insurance rates in general haven't been rising like they once did and that Amica's competitors are delivering better customer service, Connors said. Consequently, people aren't shopping around for new insurance.

“All of that put together means we get fewer people calling on us,” he said.

Amica also lacks the brand awareness and critical mass of customers in the new markets that would be necessary for word-of-mouth referrals to work.

To increase brand awareness before the mail campaign, Amica gave its branches a marketing budget for community-event sponsorship. Also, it bought regional television and radio spots that are slated to run in all of its target cities throughout the year. The campaign's theme is, “The people you want around just in case.”

In May, it began running regional print ads in Time, Newsweek, Sports Illustrated and U.S. News and World Report. The ads employ a see-through creative concept where photographs of everyday driving scenes reveal looming disasters when held up to a light. One ad featuring a car with the headline “Hold this page up to the light before you get behind the wheel again,” reveals a truck headed straight for it.

The radio and magazine spots use local toll-free numbers as response mechanisms. The television spots have no response mechanism.

Target markets for the campaign are Albany, Buffalo, Rochester, Syracuse, Nashville, Knoxville, Chicago, Cincinnati, Cleveland, Denver, Indianapolis, Milwaukee, Minneapolis, Phoenix, Seattle, Pittsburgh, Portland and Richmond.

Amica's direct mail piece employs the same theme and see-through creative concept as the print ads. It qualifies leads with four “yes” or “no” questions. People can respond by mail or a toll-free number.

“Initially, we want to find out how the public will react to a thematic piece that's more conceptually driven than the normal white mail piece,” said Jay Conway, vice president of Amica's ad agency, RDW Group, Providence, RI. “We went to great pains to reinforce that message. We also, obviously, want to test list quality.”

Amica executives declined to give numbers-related goals for the campaign.

“This is the first time that we've attempted to do this type of comprehensive project, so we're not sure what kind of results we'll get,” said Dale Huff, Amica's vice president of corporate communications. “We want to take what we learn from this process and establish a base line for the future.”

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