Get Hound Happy! Referral Hound Campaign Jennifer A. Fagan Allstate New Jersey Insurance Co. Bridgewater, New Jersey, U.S.

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1 Get Hound Happy! Referral Hound Campaign Jennifer A. Fagan Allstate New Jersey Insurance Co. Bridgewater, New Jersey, U.S. Need/Opportunity / Since the reform of New Jersey s insurance industry in 2003, more than a dozen additional insurance companies have entered the marketplace. This increase in competition forced Allstate New Jersey to find innovative and inexpensive ways to grow. Since referrals are free, they became a natural means of low-cost customer acquisition. However, the Allstate New Jersey sales force has been slow to adopt referrals as a part of their daily sales processes. Allstate New Jersey has 264 insurance agents across the state, and a vast majority of them are independent contractors. As a result, the company cannot force an agent to implement a particular sales process. Suggestion and persuasion may be utilized, but demands cannot be made. It became necessary to find a way to creatively convince agents that referrals are a worthy business tactic. Company statistics showed that referred business had a close rate of 65 percent, that it tended to retain at higher rates and that referred customers purchase additional products. While this had frequently been communicated to agents, there was little buy-in. In 2007, only 78 percent of agents were using a measurable referral process in their agency, and only 5,029 referrals were received as a result. That averaged out to each agent receiving less than 20 referrals for the year. As a company, All State New Jersey knew it could inspire the agents to do better. The Get Hound Happy! Referral Hound Campaign was designed as a multifaceted movement intended to promote behavior change among agents and get them to adopt a referral process in their agencies. The campaign centered on a lovable, clever dog, known as the Referral Hound. The Referral Hound had one mission: to help Allstate New Jersey agents sniff out referrals. The tagline of the campaign, Get Hound Happy! was included on every piece of internal communication material associated with the campaign. Since referrals made the Referral Hound happy, All State New Jersey wanted all of its agents to Get Hound Happy! as well. Intended Audience(s) / While the entire company employees, agents and financial specialists received communication associated with the campaign to help build awareness, the primary focus was on the agents and their licensed support staff. Since agents and their staff are the ones who are out in the community selling the products and speaking with customers, it was important to get them to change their behavior and implement a referral process. Anecdotal evidence indicated that agency staff tend to be eager to learn, and are oftentimes quick to adopt a new process. Agents also tend to enjoy communication that makes insurance fun. Because of these characteristics, agency staff would become a focal point of the campaign. _ 222

2 Goals and Objectives / The campaign had two main goals: to support the company s objectives to get 100 percent of agents using a measurable referral process, and to receive 10,000 customer referrals in The measures for this campaign were not financial, but were rooted in these two goals. While All State New Jersey realized that getting 100 percent of agents to adopt a referral process was more of a visionary objective for 2008, it became a long-term goal to have every agent using a referral process. Agencies using a referral process are measured with the company s internal web-based tracking tool. It is the agent s responsibility to input all referrals they receive, and this campaign was directed at increasing agents use of this tool. The goal of 10,000 referrals was a hard measure that would double the amount of referrals received in Great importance was placed on referrals because of their potential for long-term profitable growth. Because referrals have a 65 percent close rate, they are more costeffective than telemarketing or direct mailings. And since referred customers tend to retain at a higher rate and purchase additional products, referrals are both solid sales and retention strategies. Solution Overview / Jennifer A. Fagan, project manager, worked closely with All State New Jersey s sales manager to develop and implement this campaign. This was a multifaceted campaign that began just prior to the insurance company s sales kickoff meeting in February. These meetings are attended by both agency owners and agency staff members. The Referral Hound became the company s spokesdog for referrals, and he appeared in various communication tactics throughout the year. In order to bring the Referral Hound to life, the sales department provided the budget for the purchase of 10,000 customized plush stuffed animal dogs to be distributed to all agencies in This toy came with a collar that said, I love referrals, so the business objective would not get lost in the cuteness of the toy. The goal was to get agents to not only place the plush hounds on the desks of their staff, but also to hand them out to customers. The plush hounds were intended to be distributed to agents at the sales kickoff in February. A video was created featuring the sales manager and the plush hounds as a way to generate some energy before the hounds were handed out. The Partridge Family s Come on Get Happy served as the musical backdrop, and the tagline for the campaign Get Hound Happy! was introduced for the first time. All State New Jersey s regional sales leader was also provided with referral-specific message points for a brief speech that was to be given after the video played. Those message points were: 4 The best advertising out there is the kind you can t buy: word of mouth. 4 In 2007, referrals brought in the same amount of business as US$1 million in advertising. 4 Referrals have a close rate of 65 percent. 4 Referrals boost retention and facilitate cross-line sales. 4 Referrals are a cheap and effective way to grow your book of business. 4 All State New Jersey needs to make referrals part of the fabric of the company it is not just a _ 223

3 program but the way we do business. 4 All State New Jersey would like everyone to implement a referral program in their agency this year and Get Hound Happy! The Referral Hound and his catchy Get Hound Happy! slogan were also featured in All State New Jersey s internal newsletter, The Allstate New Jersey Loop (The Loop), as a means of introducing the campaign to a companywide audience (The Loop is distributed once a month to the company s 870 agents, employees and financial specialists). This was intended to build awareness among all internal stakeholders that referrals were a strong sales tactic, and to reinforce growing the company through referrals as a main business objective for In March, The Hound s House column was introduced in The Loop. Jennifer A. Fagan was the ghost-writer for the Referral Hound, and this monthly column was penned in the hound s fun-loving tone. Each month, the Referral Hound would have a pow-wow with agents who had successful referral programs and share best practices. Agents were selected based on a combination of high referral numbers and unique sales processes. For example, one featured agent focused on training staff to ask for referrals while another proactively marketed to the workers at Newark Liberty International Airport. All of the ideas presented in The Hound s House could be replicated by agents and their staff, and this ability was also taken into consideration when selecting which agents to feature. All good hounds need an equally good home. To make the plush hounds more eye-catching in the agents offices, a Hound s House display was created. Sporting Allstate New Jersey blue, this doghouse-shaped-box served as both as carrying case and an agency display. The plush hounds originally came in plastic bags and were not attractively packaged. There was also concern about how to best deliver multiple plush hounds to agents offices easily and efficiently. Each dog house display comfortably held 20 hounds and was equipped with a handle for easy transporting. One Hound s House was allotted for each agency location, and was used for transporting and storing the Referral Hounds. Sales training classes began in July and ran through November. All agents attending these training classes received a Hound s House for their agency. The training classes included a section on how to ask customers for referrals so that the distribution of the plush hounds was aligned with the training. Education consultants conducting the training classes were given message points to ensure the agents would use the hounds and their display in an effective manner. Message points were: 4 Give the hounds to customers with children to produce an outstanding customer experience. 4 Display the Hound s House in the waiting area of the agency to grab the attention of customers. 4 Place a plush hound on the desk of every staff member as a reminder to ask customers for referrals. 4 Use the Referral Hound to segue into a conversation with customers about referrals. 4 When sending a thank-you note to a customer who provided a referral, send along a hound too. _ 224

4 To ensure maximum penetration of the message points, a mailing was sent to all agencies that received a Hound s House. The mailing came from the Referral Hound and was shaped like a dog bone. Written in the Referral Hound s cheeky tone, the mailing reinforced how the agents could best utilize the display and the hounds. Bullet points were replaced with paw prints to draw the agents to the most important content. The dog bone was mailed in a clear envelope to ensure it did not get lost among the multiple pieces of mail agents receive on a daily basis. On the back of the mailer, the campaign tagline Get Hound Happy! was displayed. The central piece of the Get Hound Happy! Campaign launched in October. The Hound Pound Great Referral Sniffout was introduced to licensed support staff with the objective of changing behavior and driving business results. This 12-week campaign included three monthly contests (held in October, November and December) to reward those licensed support staff who were actively asking customers for referrals. This campaign was done entirely via . Depending upon the number of referrals Allstate agents asked for in a month, licensed support staff members were grouped into one of four categories: Lassie, Pluto, Snoopy and Scooby. Each category correlated with a gift card of increasing amounts. The more referrals they asked for, the greater the prize. The top three referral sniffer-outers became members the Hound Pound VIP Club. VIP members received an additional gift card, a congratulatory certificate, an additional plush hound and a Dunkin Donuts breakfast for their entire agency. In order to participate, agencies were required to use the company s web-based tracking tool. Referrals were then calculated after they were entered into this tool. To keep participants engaged in the Hound Pound Great Referral Sniffout, weekly contests were held via showing pictures of the Referral Hound in various historic locations throughout Boston and Philadelphia. The premise of these contests was based on the Referral Hound traveling the East Coast to spread the word about how Hound-tastic customer referrals are. Participants were given a trivia question that corresponded with the Referral Hound s location. Winners were chosen at random from correct answers, and would receive a small prize. Tips on how to ask for referrals were included in these contest s. During the campaign period, weekly referral tips were also posted on the company s intranet, which is accessed daily by agents and support staff. These referral tips came from outside sources to boost the credibility of the information being provided. Implementation and Challenges / Since this project was entirely funded by the sales department, the communication budget for this project was US$0. However, if the sales department budget were to be taken into consideration, the cost of the entire campaign would come to US$31,200 (this includes the production costs for the plush dogs, the Hound s House display, the dog bone-shaped mailing and gift cards for the Hound Pound Great Referral Sniffout. The dog bone mailing, the production of the plush dogs and the Hound s House displays all required the use of an outside vendor). An initial challenge came at the onset during the sales kickoff. While the original intent was to distribute the plush hounds to agents and licensed support staff at this event, the idea was nixed at the last minute due to concerns over the amount of time it would take to hand out the hounds. To compensate _ 225

5 for this change in direction, a decision was made to put one plush hound in each takeaway gift bag so the hounds could still be introduced alongside the video. All of the agents were gathered at this event, so it was an ideal opportunity to distribute multiple hounds at that time. Not being able to use the sales kickoff as a distribution point created a challenge that required the hounds to be delivered piecemeal to individual agency locations. The idea to create a portable Hound s House display was born out of this challenge, and the hounds were later given to agencies during sales training sessions. Another challenge was that agents are independent contractors, not employees. All State New Jersey s contractual agreement prohibits the company from prescribing the manner or means by which agents are to conduct business. Communication is allowed to persuade or suggest, but it cannot explicitly tell agents that they need to implement a particular sales process. Communication centered on the Get Hound Happy! Referral Hound Campaign had to be highly persuasive without being demanding, and special attention was paid to make sure this delicate balance was met. Meticulous legal review was required as a result. Additionally, licensed support staff are not employees of the company; they are employed directly by the agent. The company is not permitted to communicate with support staff without receiving the consent of the agent first. As a result, agents had to enroll their staff in the Hound Pound Great Referral Sniffout, which meant it would not be easy for the campaign to reach 100 percent of the licensed support staff. Measurement/Evaluation / By the end of 2008, 85 percent of agencies were using a measurable referral process, an increase over the prior year of nearly 10 percent. This measurement was determined by an increase in agencies using the internal tracking tool. Additionally, the company exceeded its goal of 10,000 referrals and closed out the year with 10,080 referrals, an increase of more than 100 percent over the prior year. From those 10,080 referrals, nearly 6,100 insurance policies were issued. The estimated premium earned as a result of these polices is US$4,613, The Hound Pound Great Referral Sniffout was a Hound-tacular success, and can be seen as a driving factor in the company, both increasing the amount of agencies using a measurable referral process and exceeding its goal of 10,000 customer referrals. Agency participation for the contest was 42 percent, enrolling 228 licensed support staff. The week before the contest began, 79 percent of agents were using the tracking tool and 6,845 referrals had been entered. At that time, the company was on pace to miss its goal by nearly 900 referrals. During the 12-week contest period, participating agencies submitted 1,572 referrals and put the company over its goal of 10,000 referrals. The Hound Pound Great Referral Sniffout accounted for 15 percent of all customer referrals received for the entire year. The total amount distributed in gift cards was US$2,315, making the average cost of each referral a mere US$1.47. Additionally, 85 percent of agencies used the internal tracking tool. The Get Hound Happy! Referral Hound Campaign played a critical role in the company s overall referral success when it came to driving both behavior change and bottom-line business results. The effectiveness of the campaign was highly valued by senior leadership of the company and is being brought back at request of the sales department in _ 226