How Progressive Markets the Trading of Privacy for a Discount

How Progressive Markets the Trading of Privacy for a Discount
http://www.thecmosite.com/author.asp?section_id=1167&doc_id=205271
Ariella Brown, Content Developer and Blogger 4/1/2011

Here's the pitch: Place a small device in your car and let it track your driving, in order to qualify for discounts on your car insurance. Would you do it?

Progressive is hoping you will. The company is making a big marketing push for its Snapshot device, which is touted as the key to a "pay as you drive" program offering discounts up to 30 percent. Its approach to marketing the Snapshot offers lessons in how to put customers at ease as they are asked to give up some privacy for tangible benefits.

Progressive is promoting Snapshot through ads and videos that feature the famous "Flo, the Progressive girl" -- she has her own Facebook page with more than 2.6 million listed admirers. The ads are designed to look like home videos rather than professionally produced commercials. Progressive is heavily invested in social media, including a dedicated YouTube channel, a Facebook page (not nearly as popular as Flo's), and a Twitter account.

According to CMO Jeff Charney, the Snapshot device will be as transformative for the insurance industry as the iPod was for music. While other insurers offer similar programs, they are much more limited. Allstate has a discount for drivers in its Drive Wise program only in Illinois, and State Farm offers Drive Safe & Save for drivers who sign up for it and subscribe to OnStar. Progressive's Snapshot program is available in more than 30 states and does not require enrollment in any additional service (it does its own transmitting back to the database).

Customers can log in to their Progressive policy and get an overview of their driving habits, review specific trips, or track their driving by day of the week or time of day.

The Snapshot device is small and easily plugs into the car's diagnostic port. While it may be capable of picking up a lot more than some people may be comfortable with, Progressive insists that it only records the number of miles you drive, the time of day you drive, and how often you make sudden stops. Skeptical drivers are assured that the record can only bring their rates down, not raise them. When I expressed privacy concerns to Brittany Senary from Progressive's public relations department, she assured me, "The device does not have GPS, so we don't know where the car is. In addition, we don't take into account how fast the car goes."

Still, drivers should bear in mind that the data could be used against them in particular circumstances. Progressive can access the data with customer permission, but that is not the only criterion. Another is "reasonable cause to believe he or she committed insurance fraud." The catch-all clause says the data can be tapped "if it's necessary or appropriate to prevent fraud, perform research, or comply with the law" -- so the records could be subpoenaed by courts.

For those who balk at that loss of privacy, the company emphasizes that Snapshot is a "voluntary discount program." Customer can choose to opt in to prove that they "drive less, in safer ways, and during safer times of day" and so qualify for a discount. They can also opt out if their own tracking of the program online indicates they are not going to save money with it. By marketing the Snapshot in a down-home campaign holding out the promise of savings, and offering customers the ability to see their own driving behavior, Progressive makes a pretty effective pitch.