The New Direct

The definition of “direct marketing” is changing. BlueCross BlueShield is a brand that understands that. It’s made the journey from direct to brand to what we now call the new “direct.”

BlueCross BlueShield

BlueCross BlueShield, a more than 75-year-old association of independent BCBS plans, is clearly one of the most recognized brands and brand icons in the country. Over the years, these insurance giants have reaped the benefits of terrific brand equity. When the Johnson administration signed Medicare into law in 1966, the Blues were right there with Medicare supplements to round out the coverage. In fact, so many BCBS plans handled the administration aspects of Medicare that consumers were often confused as to what role a Blue Plan played: Was it an arm of the government, a private insurer or both? BlueCross BlueShield owned the Medicare market.

Until 1982. That’s the year someone woke the sleeping giant that was the American Association of Retired People. AARP severed its long-time exclusive relationship with Colonial Penn Insurance and put its entire account out to bid. Enter Prudential. In addition to providing members with supplemental health products, Prudential made a major push to provide affordable, easy-to-get Medicare supplements to AARP members. Consequently, for the next few years, the Blues saw their market share decline at a rapid rate.

They were still operating on an “If you build it, they will come” mentality.  Many of the Blue plans seemed to be doing the right things, but that’s different from doing things right. But one by one, the Blues took up the best practices of direct marketing and clawed their way back to the top. 

So, what happened? This was—and for some still is—a marketing anathema: Some aspects of direct just don’t feel right to the keepers of the brand. This is especially true when deployed in broad-reaching media such as broadcast/cable and print. David Ogilvy’s credo for the direct marketer, “We sell, or else” doesn’t resonate for those whose charge it is to protect the brand.  In fact, today some point to GEICO and say, “Look—they can do it with :15 and :30 second spots. They can build the brand and still generate leads and sales.” Yes they can—with an incredible media spend, aggressive integration of every medium known to man, and a willingness to take risks with their messaging.

BlueCross BlueShield is one of the best examples of a brand marketer that became a brand/direct marketer. There are many carriers providing health insurance to consumers of all ages, but none as credible as the Blues. Over the past 25 years they’ve emerged as the Cadillac of health plans for individuals who need to buy their own insurance, whether they be self-employed, retired early, without insurance from a small business employer, or just between jobs. The strength of the Blue brand coupled with a new strategic focus to dominate this market led the company to certain success when deploying direct tactics to generate leads for agents and/or to take products directly to the consumer.

Today, the one-two punch of brand advertising and direct response advertising has propelled the Blues into a leadership position in the individual insurance market. Could the brand, like GEICO, more strategically deploy resources by making all their advertising brand-direct? 

Sure, but for them the revolution is not yet complete.

Warren Hunter is chairman of DMW Direct.

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