Less Customer Engagement? One Brand Sees Value In That

Did you think the title of this piece was a typo? It’s ok if you did, no one could blame you. But believe it or not I want to introduce you to a brand that believes it can build more customer loyalty and positive sentiment by not engaging its customers. Even ignoring them if you will.

Sounds crazy, right?

Well, Clearcover CEO Kyle Nakatsuji built his company on this very premise and the idea that most people think car insurance is actually pretty boring. So while they might not want their car insurance company engaging with them — they do want a good customer experience and good prices. So Nakatsuji built a car insurance company to focus on leaving customers alone in moments that insurance doesn’t matter.

Currently operating in California, the brand, which launched in 2016, has plans to launch in Illinois and soon and expand nationally in 2019.

I spoke with Nakatsuji not long ago on a variety of topics including advertising, which he refers to as “media that is intended to buy their attention but has nothing to do with the product” when speaking about the big boys i.e. Geico, Progressive, Allstate, State Farm and so on.

Steve Olenski: It’s no secret that insurance companies are among the biggest spenders when it comes to advertising. How can a startup expect to compete when facing seemingly bottomless pockets when it comes to the big players in the industry?

Kyle Nakatsuji: Our technology and all of the other things we do, including avoiding spending billions on advertising, allow us to offer a high-quality product at lower prices than the big players. And no matter how much they spend on ads, they can’t change that – in fact, it would make it worse. We’re betting our focus on providing the right coverage, when it really matters, for less money will help us win fans, not buy them.

Olenski: As you discussed on the phone, there is also the perception that so many consumers have when it comes to not just insurance but ANY industry which is the “how good can they be if I’ve never heard of them?” mindset. So many consumers equate awareness to quality and in turn become, almost unwittingly, blind loyalists to a brand who very well may not be the best option for them for that given product/service. How can a brand such as Clearcover convince consumers that awareness AKA massive ad budgets, doesn’t always equal the best option?

Nakatsuji: Insurance consumers are smart. We’re a startup, but we also have thousands of customers that have all switched to us from one big company or another. Many of them made the switch because they understand that an expensive brand isn’t the only way to signal quality, and that new entrants with the right approach can be an attractive alternative to traditional players. So, we’ll continue to focus on providing great products and saving people real money – we’re confident people will catch on.

Olenski: I understand the brand uses AI to help provide the best coverage for every person. Can you elaborate on how AI is helping consumers get the exact coverage they need vs. what they may not need?

Nakatsuji: We use AI in multiple layers of the business to ensure we can execute on our mission — to provide people with the right coverage, when it matters, so they can pay less. That means we use it not only to help people get the right coverage, but also in our internal and risk monitoring processes to ensure we can optimize operations and continue to provide low prices.

It will of course bear watching to see if this David can take on the Goliaths of the car insurance world, an industry which has been described as “experiencing its most seismic shift since it began over 100 years ago.” And rest assured there is a lot of money at stake here with the U.S. market alone with $200 billion.

The key will be for Clearcover and brands like it to provide 3 basic things above all else:

1. Quality product
2. Competitive pricing
3. Excellent customer service

While these may sound incredibly simplistic, we all know they’re not all easy to deliver andsustain.