Issue: Liberty Mutual, Doing the Right Thing

The insurance company knew the message it wanted to send in order to be in the top five, but the challenges were many

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Insurance company Liberty Mutual had an ambitious goal in late 2005: to become one of the five largest auto insurers in the U.S. In the auto insurance business since 1918, Liberty Mutual was in the top 10, but it was seeing its market share shrink rather than grow. And it was seeing itself outspent on advertising by the dominant players by a margin of 5 to 1.

"About the time that we were to put more resources behind [the auto insurance market], so was everybody else," remembers Stephen Sullivan, senior vice-president, communications services. Competitors GEICO, Progressive (PGR), State Farm, and AllState (ALL) were each spending five times what Liberty Mutual was on advertising to maintain their market share or attain modest growth. Plus, to make it into the top five, Liberty Mutual would have had to increase its business by three times the industry average.

The company saw other challenges as well. "All of this was made even more daunting by the very low degree of interest and in particular, trust, the consumer has in the insurance category," Sullivan admits. And he recalls that compared with the category leaders, consumer familiarity with the Liberty Mutual brand was low. Consumers were familiar with the name Liberty Mutual, but they didn't know what the company did.

Making a Corporate Motto Resonate

"We realized that we would have to change our messaging and our advertising direction to differentiate us from our competitors," says Sullivan.

On the plus side, the company believed it had a strong message to convey: Its mission is to help people "live safer, more secure lives." But how do you convey that and make a corporate motto resonate with consumers? "We knew we had something to say—the question was how do you really make something like that tangible?" says Sullivan. "How do you connect with people in a way that's not just some other claim from a big insurance company that people are going to disbelieve?"

The questions were more than rhetorical ones thrown about at strategy meetings: They were problems Liberty Mutual brought to its advertising agency, Hill Holliday. The agency helped Liberty Mutual further refine its message.

"In doing that research, we had reinforced to us over and over that our employees believed something very strong about the company," says Sullivan. "The way people expressed it: 'You know, at the end of the day, we just do the right thing.'"

Thinking Beyond the Traditional

Liberty Mutual decided that "doing the right thing" was the message it really wanted to communicate to customers and prospects. If employees felt strongly about it, the company would be able to deliver. But the refined message was no easier to communicate. "It's a wonderful thing to say that we do the right thing, but it's also a more difficult message to get across to consumers because so many people want to say that," says Sullivan. "What we wanted to say is 'We recognize that personal responsibility is one of your core values and if this is true, then you will like doing business with a company like us because we share that value; in fact, we celebrate it on your part.'"

And Liberty Mutual never lost sight of the fact that it was always going to be outspent on advertising and it needed to think beyond traditional ways to reach the marketplace. So the challenges it took to advertising agency Hill Holliday were multiple: How do you achieve significant growth in a crowded marketplace where your big-spending competitors are also hungry for growth? How do you translate employee passion and commitment about responsibility to consumers who have little interest in and trust for your product? How do you build awareness of what the brand really stands for in ways that will differentiate you?

Patricia O'Connell is Management Editor for BusinessWeek.com.