DDB Worldwide, a subsidiary of Omnicom, launched State Farm Mutual Automobile Insurance Co. into banking and mutual funds, achieving $2 billion in assets under management (AUM) within one year of launch. State Farm is the largest property, casualty and auto insurance provider in the United States and ranked 36th in the 2019 Fortune 500.
A significant change in financial and insurance legislation presented State Farm with the opportunity to expand their offering to include banking and investment products. A 25 percent market share of all insured autos nationally provided the company with a potential trove of pre-qualified and very brand-loyal customers. State Farm’s dominant business provided the perfect platform for direct-to-consumer branded banking and investment products, it only needed to leverage access to its substantial customer base. It was decided to be an acceptable risk for the prospect of dramatically expanding State Farm’s business and client relationship.
There were several challenges. First, the addition of financial products was considered a risk to the core business, stable revenue trajectory and overall brand. Adding a new line of business to a legacy product offering ran the risk of compromising overall and long-time policy-holders the brand had amassed over 80 years if the investment products lacked fidelity.
Second, State Farm’s agency model heavily relies on their agents being active promoters and the only conduits to the product line and sales process. A valid and critical concern was the possibility of a disorganized rollout in the 16,000-strong agent network, with the potential of agents not being knowledgeable about the products, misrepresenting the products, or trying to sell products directly where they were not licensed to do so.
Finally, the revenue model of credit cards was predicated on policy-holders taking on additional, and expensive debt. The value proposition of the card from the company perspective was not congruent with their “good neighbor” ethos. Profits State Farm would enjoy at the cost of policyholders might disrupt the relationship leading to erosion of core insurance policy products.
I was brought in by DDB to focus on the launch and continuity of a host of financial bank and mutual fund products as I had prior deep, integrated marketing experience with a number of national and global brands including First USA Bank, Marriott and United Airlines Affinity cards, and Wells Fargo Bank products across several channels.
With other account leaders, I ran all aspects of DDB’s oldest, largest and most profitable account. My responsibilities included the direction and overall performance of the accounts, as each account, lived as an independent business unit and profit center within the agency. As an account director, I was responsible for managing and directing the agency resources to optimize client success.
This was one of the largest multi-media and integrated marketing campaigns executed by State Farm and DDB to date. The State Farm Bank and State Farm Mutual Funds brands were successfully launched, as were all corresponding products. This involved a surgically calculated and expertly executed national and multi-channel roll-out strategy. The bank and investment portfolio amassed over $3 billion in assets within one year of launch.