Progressive and the Power of Social Networks
Insurance Experts' Forum, August 17, 2012
In a matter of five days, the Internet has proven itself utterly unwieldy as Progressive suffered attacks from every angle.
A quick recap: On Monday, an aspiring comedian living in Brooklyn named Matt Fisher composed a Tumblr post urging his followers not to purchase insurance from Progressive. Fisher’s sister had recently suffered a car accident and was killed—the other party was presumed to be at fault. A settlement was reached quickly between parties, but the survivor was underinsured. Fisher’s sister’s policy left Progressive to pick up what was left of the costs after the settlement.
Which brings us to the crux of Fisher’s argument against the insurer: Rather than pay the difference, $75,000, a court case ensued bringing the fault of the accident into question. For which, Fisher claims Progressive actively represented the defense—Progressive has slowly come to acknowledge a presence with the defense in representation of itself, but they continue to refute accusations of representing the defendant.
While the national media continues to pick apart the details, the defendant has been found guilty and Progressive stands to pay the difference—case closed. What fascinates me, however, is the lifecycle of this story.
Whether insurers are ready or not, the Internet is a terrifyingly effective platform for customer feedback, and peer consumer research. While social analytics is set to take off in coming years and monitoring social networks for feedback is increasingly seen as essential in this era of consumer-centrism, this is an uncanny example of why these initiatives need to be fully embraced.
This case is particularly interesting because the platform that served as the initial flare, Tumblr, is not easy to monitor. Yet, the site is set up for purely viral experiences. The whole premise is based on a constant cycle of sharing what’s been shared with you; thus, exponential potential for growth is inherent.
Usually these intense networks result in the overzealous popularity of pointless memes (see: Hey Girl, It’s Paul Ryan). But as the industry has learned this week, negative passions can be even more potent.
By the time many online bystanders and news outlets got a hold of the post, it had been shared dozens of times, and shares beyond that undoubtedly skyrocketed. It was too late for Progressive to control the damage.
Indeed, Fisher pre-empted his Tumblr post with tweets vaguely attacking the insurer, but for an insurer to pursue every piece of feedback—though some try—would lead to near-impossible levels of responsiveness. How far can insurers be expected to go to meet the concerns of every customer? Will social media centers replace call centers? Will dozens be hired solely to message the executor of every Internet complaint to ask for their story?
(Progressive eventually responded to several tweets regarding the case and its growing public attention; however the company’s automatic replies were scorned as cold, impersonal responses to a very personal customer complaint.)
As that level of attention to customers cannot be expected without advanced social analytics technology to supplement it, insurers need to push for this technology and seek innovative ways to use it for damage control purposes, as well as prepare their organizations such pushback in the mean time.
To be sure, it is a time of unprecedented oversight. As a confluence of regulatory issues loom larger than ever in a still-unstable economy, companies need to keep the consumer top-of-mind, as any and every customer inhabits dangerously public forums, and adjust their social media strategies accordingly.
Justin Stephani is associate editor for Insurance Networking News.
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