Editors' Cuts

Progressive and the Power of Social Networks

Justin Stephani
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.

Readers are encouraged to respond to Justin by using the “Add Your Comments” box below. Healso can be reached at justin.stephani@sourcemedia.com.

This blog was exclusively written for Insurance Networking News. It may not be reposted or reused without permission from Insurance Networking News.

Comments (2)

Thanks for the comment. I appreciate your perspective and agree with you that nobody is going out of business because of a social media revolt
anytime soon. Most of my point was just how quickly social media can become national news and, beyond the thousands who read the actual post, it can
attract the attention of millions of potential customers, much to the detriment of the company in question.

At the time this was published, there were no confirmed details on the business effects. There are a couple now: Reports from Crimson Hexagon, a social media tracking firm, cited more than 1,000 twitter accounts professing that they had canceled their policies with Progressive, and "another 1,600 or so expressed a desire to not do business with the
company." Even if these Tweeters follow through, it's certainly still not enough to crumble a giant such as Progressive. But considering it happened in a week and that these are only the outspoken
repudiators, I still contend it's enough to warrant a look at some emergency social media responses, especially for small to mid-size companies.

Justin Stephani
Associate Editor

Posted by: Justin S | August 24, 2012 12:46 PM

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Justin: with all the sympathy towards Mr. Fisher's loss, and his ensuing struggles with the insurer... your story fails to convincingly demonstrate the alleged negative impact on Progressive's business. Ok, so Mr. Fisher posted his tweets and Tumblr. So what? Few (hundred, thousands maybe) people read them. So what? How many of them were current Progressive's customer, and will switch their policies as a result? How many of them are shopping for a new insurer, and will NOT consider Progressive as a result of this incident? I don't think we know. And who will remember it a month, or six months, later? Until we see stronger links between such social media cases, and negative (or positive) impact on the business in question, who cares? Just see for yourself, how many "British Airways sucks" web sites, blogs and posts are out there... and they are still flying fine, thank you very much.

Posted by: Industry Observer | August 24, 2012 12:13 PM

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