If you haven’t heard about Ã‚Â State Farm’s plans to test a totally new approach to their business, you should take a look. It seems like they’re going to sell insurance by NOT selling insurance.
Here’s a description from the Chicago Brander (1):
State Farm Next Door opens August 1st and the concept is a more open, casual community space that offers free Wi-Fi and coffee (via its Next Door Cafe) as well as personalized coaching/small group classes on financial matters that range from paying off student loans to learning how to budget your finances.
And guess what? It’s all free. Even more crazy? They’re not going to sell insurance policies at these locations.
An article on Families.com says it well (2): “This is either a fantastically innovative idea, or a disaster waiting to happen.”Ã‚Â I happen to think that it’s a great idea, and here’s why: State Farm is forgoing the classic insurance price-war and focusing on living up to what they say they are, a ‘Good Neighbor.’
I’ve only been out of school for a handful of years, but I’ve switched insurance providers 3 times for lower rates. It’s a crowded market, and for the big players, comparison is the name of the game. But it’s not the best way to be a good neighbor. A neighbor doesn’t present you a buffet of commodities, they go out of their way to really help you, and it seems like that is what State Farm is aiming for. (A timely move as well – budgets and student loans are a hot topic and a big need for many recent grads.) Ã‚Â Chicago Brander hits the nail on the head:
For a long time, State Farm talked about the fact that their agents live in the same community as their customers. Which is normal. But even though you can continuously say, “We live where you live,” there’s nothing quite like actually demonstrating it visibly by being more of a central hub.
There are a number of factors that will contribute to the success of Next Door, and I’m interested to see how things turn out. What I do know is that not playing the same game as competition and “actually demonstrating” your promise to customers is one of the best foundations to build on.