It may be that points could be made in favor of Progressive Insurance's actions in the case of policyholder Katie Fischer, who was killed in a collision with an uninsured driver. However, in the age of social media, there may be no second chances for insurers whose behavior is subject to harsh interpretations. In this case, the insurer was not only made to look about as bad as could be, but its own social media response only made things worse.
The story requires some space to relate, so I'll begin with the lessons insurers should learn from Progressive's experience:
• In the age of social media, you no longer have the same degree of control of the message. Your actions are subject to greater scrutiny, and you can't respond with perfunctory statements and consider the matter settled.
• Routine corporate practices that would look bad if the public only knew about them (e.g., conduct in courts of law) now will be known, and all the ugliness will redound to your brand — and to the industry as a whole. Insurers may need to do some soul-searching about what they really stand for, and whether their ideals are genuinely manifested in practice across the entire enterprise.
• Insurers need to dedicate resources to understanding social media and practicing use of social media channels in a personal way — a mechanical, corporate voice defeats the purpose and will actually cause problems.
• He who lives by competition on price can die by competition on price — pushing insurance as a low-cost commodity will inevitably reduce standards of claims service and give insurers an incentive to act to the public's negative stereotype, i.e., that insurance companies are your best friend until you actually file a claim. To the extent that such charges have merit, it makes a mockery of an insurer's pretension of believing that the claim is the "moment of truth" when the trusted institution comes to the aid of its policyholders. The public already questions of the value of a relationship that mechanically sucks away their money month after month and only has value if something goes terribly wrong.
Progressive's troubles began with what Ms. Fischer's brother Matt has called some "impertinent tweets," related to his sister's case. Fischer, is apparently a stand-up comic, and while his commentary has been mordant rather than humorous, he has shown what damage an articulate person can do to an insurer's brand. Fischer followed up his tweets with a credible and compelling version of events which asserts that the terms of Katie's policy required the insurer to pay the difference between what she was owed directly and what an insured driver's carrier would have paid. Fischer writes:
At which point we learned the first surprising thing about Progressive: Carrying Progressive insurance and getting into an accident does not entitle you to the value of your insurance policy. It just pisses off Progressive's lawyers. Here I address you, Prospective Progressive Insurance Customer: someday when you have your accident, I promise that there will be enough wiggle room for Progressive's bottomless stack of in-house attorneys to make a court case out of it and to hammer at that court case until you or your surviving loved ones run out of money.This would be bad enough, but it gets worse. Much worse. Progressive proceeded to "auto-tweet" or "robo-tweet," i.e. , to automatically generate identical responses to multiple recipients. The approach was ill-conceived on two levels: it was impersonal in nature, and heartless in tone, as one writer quipped:
Which is what Progressive decided to do to my family. In hopes that a jury would hang or decide that the accident was her fault, they refused to pay the policy to my sister's estate.
Pro tip for big brands: When talking on Twitter about how you handled a customer's tragic accident, the phrase "contractual obligations" is unlikely to play well.
Matt Fischer's subsequent blog posting also alleged that Progressive's lawyers essentially served as legal counsel for the other person involved in the accident, because the insurer's financial interest was in a finding that the man was not negligent. CNBC reported that:
A blog post from comedian Matt Fisher entitled "My Sister Paid Progressive insurance to defend her killer in court" — has gone viral. There were nearly 16,000 negative tweets about Progressive just yesterday — that's up nearly 50,000 percent from a week earlier, according to General Sentiment, a firm which tracks social media chatter.
In a post titled, "Progressive's Flo vs Dead woman's brother with a blog, No Contest," the author of "Datechguy's Blog" recounts that Progressive released a statement denying that it served as the defendant's attorney in the case, and that Fischer fired back:
I am not a lawyer, but this is what I observed in the courtroom during my sister's trial:It's hard to imagine an effective refutation to that, and at this point Progressive should probably cut its losses [Update: Progressive reports that it has settled with the Fischer estate] and act in a way more likely to redeem its reputation. One thing it should not do is resort to more robo-tweeting from its fake persona, suggests Norv Leong, director of product marketing of social media software and advisory firm Actience.
At the beginning of the trial on Monday, August 6th, an attorney identified himself as Jeffrey R. Moffat and stated that he worked for Progressive Advanced Insurance Company. He then sat next to the defendant. During the trial, both in and out of the courtroom, he conferred with the defendant. He gave an opening statement to the jury, in which he proposed the idea that the defendant should not be found negligent in the case. He cross-examined the plaintiff's witnesses. On direct examination, he questioned all of the defense's witnesses. He made objections on behalf of the defendant, and he was a party to the argument of all of the objections heard in the case. After all of the witnesses had been called, he stood before the jury and gave a closing argument, in which he argued that my sister was responsible for the accident that killed her, and that the jury should not decide that the defendant was negligent.
"The Progressive debacle clearly shows the benefit of a having a damage control plan in place when there's a fall from 'socialsphere' grace," Leong says. "From a brand and reputation perspective, the main take away is to ensure all social communications are authentic and personal. Auto-tweeting responses goes against the main value proposition of social media. Social is all about authenticity of voice and engaging at a personal level with your audience, and other insurance companies should take note for their social strategies."
Leong is right, but social media is also about how the public can decide what the message is, whether through viral tweets or by a motivated, articulate person with a blog. The bottom line is that insurers not only have to learn to talk the talk, but they also have to walk the walk, because empty words and official-sounding excuses are not going to cut it anymore in a world of socialized mass communication.
To pose a question implied by the Datechguy Blog's author, do we really want to reinforce already bad stereotypes such as the Gilbert Huph character in The Incredibles?