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Geico: Leo Goodwin was an entrepreneur who, in 1936, came up with an insurance marketing strategy in which he would directly market his insurance company and business to a specific group of individuals. The first group that he chose to directly market his insurance to was the United States Military and the individuals who took part in that particular job field. Enlisted men, officers, and members of the military personnel made up those who were first offered GEICO insurance. Goodwin's strategy went off without a hitch and the intelligent and insightful man was able to offer deeply discounted insurance policies to those in the Military. Goodwin's success came as a result of the discounts he offered clients on their insurance policies. Over the last seventy-three years, GEICO has continued to offer these discounts, although their marketing has grown to include other individuals in the general public. Nonetheless, their basic premise remains the same as GEICO still aims to manage their business costs in such a way that customers are able to save a great deal of money on their insurance policies and traditional insurance costs. Many of these costs are typically higher at many other companies.Throughout the years, the Military has remained, in general, loyal customers and GEICO has noted this loyalty. In total, the Military has resulted in faithful and dedicated customers and policy holders with GEICO for more than seventy years. This is a very impressive statistic and GEICO, for their part, is able to offer help and competitive insurance not only during times of war, but during times of peace as well.
Berkshire Hathaway is the name of the company that is run by one of the most successful individuals to take part in investing in recent years. That man is none other than Warren Buffett and Buffett took GEICO on as a subsidiary more than twelve years ago, in 1996. The specialized insurance program is so popular that the GEICO plan based in property-causalities has been listed for two years, in a row, as the single most admired plan in the United States of America. This poll was published by Fortune Magazine, a popular business magazine.
In addition to the property-casualty services that are offered by GEICO, there is a full range of available products. These insurance products include policies on homes, vehicles, boats and motorcycles, as well as homes, apartments and other building units. Personal insurance policies are also available from GEICO.
The History of GEICO
GEICO was formed by two individuals, by the names of Leo and Lillian Goodwin, in the middle of the 1930s. The couple faced some troubles since the time of the Great Depression; it was a risky time to open a new type of business, even one with as solid of a marketing plan. Leo Goodwin came up with his marketing plan during a time when he was working in Texas. He believed that a specific group who was offered a special discount would be drawn to the insurance company. The business opened in 1936 in Washington, D.C., and since then the company has grown and become a very well-respected insurance company. The official name of the company, GEICO, is an acronym for the first clients of the company – the Government Employees Insurance Company (Co.).
Lillian Goodwin was not simply a bystander when her husband started the company. She was an active participant. Accounting, bookkeeping, policy creations, rates, policies, and marketing were all fields that Mrs. Goodwin took part in and actively worked on as the company grew. In the end of 1936, the company had a total of twelve employees and had been able to sell a total of three thousand, seven hundred insurance policies.
After their start-up in 1936, the next landmark year for GEICO occurred in 1948. During this year, a new investor, friend Lorimar Davidson, came in to help attract new investors for GEICO. Davidson was able to attract Benjamin Graham, who in turn was able to influence and educate Warren Buffett about GEICO. In 1951, Buffett began a life-long relationship and link with the company. He even made a personal trip to Washington, D.C. in order to learn more about GEICO, who was able to take part in an impromptu meeting with Davidson, who convinced him in the validity and promise of GEICO. This was when Buffett first purchased some of GEICO's stock. He later purchased additional stock in 1976 and eventually amassed a collection of one million GEICO stock shares.
Leo Goodwin retired in 1958 and Davidson's loyalty was paid off when he was named as Mr. Goodwin's replacement and successor. Thirty-three years after GEICO was first established, in 1959, a new headquarters was opened. The new establishment was opened in Chevy Chase, Maryland.
Throughout the 1960's, GEICO experienced continued success to likes of which seemed unrivaled, exceeding a net earnings figure of $13 million. During this decade, they also issued their one millionth insurance policy and established a number of additional offices. Some of these offices even offered drive-thru windows. Unfortunately, the next decade was not nearly as kind to the company. Not only did Leo and Lillian pass away, in 1971 and 1970 respectively, but the company also had to deal with a weakening economy and loss of revenue. Nonetheless, with perseverance and a keen attention to serve activities, the company soldiered on. At the end of the 1970s, in 1979, Lou Simpson emerged as the Chief Investment Officer of GEICO. As recognition of his vision, Leo Goodwin was inducted, posthumously, in 2001 into the International Insurance Society Hall of Fame. The company was able to grow from a mere twelve employees to more than 21,000 associates in twelve major locations.
GEICO grew slowly and steadily throughout the 1980's, providing expanded underwriting offers and other development projects. At the same time, customers were offered a new 24 hour line to help with questions and concerns about services and policies. Clients were impressed with the increased availability of their insurance company.
A four-company strategy was put in place by the new GEICO Chairman, Olza "Tony" Nicely. He hoped to expand the customer and client base that GEICO had established. A new advertising budget was put in place in order to slowly appeal to more and more individuals around the country on an unprecedented level that took the form of mail ads, video commercials and radio ads. This initial move on the part of Nicely appealed greatly to Warren Buffett, as evidenced by the fact that his company, Berkshire Hathaway, mad a bid for the remaining shared of stock in the year 1995 and by the following year, GEICO emerged as a subsidiary of Berkshire Hathaway. The GEICO Gecko, one of the biggest and most beloved spokespersons for GEICO, emerged in 2000.
Another milestone year took place in 2003, when GEICO was able to sell their five millionth insurance policy and expand their offices to include two more in Arizona and New York. The year 2004 offered additional progress. GEICO retained their six millionth insurance policy and was able to once again offer vehicle insurance coverage in New Jersey. Nicely remains committed to growing the company and providing the perpetual services that clients have come to expect from GEICO.
GEICO Ads / Advertising / Mascots
"Fifteen minutes could save you fifteen percent or more on car insurance". If you recognize this tagline, you are certainly not alone. This is the major advertising and marketing premise that most people are familiar with in connection with GEICO. Most of GEICO's advertisements are available in video, print, and audio form. Radios, televisions, newspapers, and billboard are just some of the venues utilized by GEICO to get their message out to the masses. Mail circulars are also a very popular choice as far as GEICO advertisements go. These ads have progressed over time and the beginning ads were considered by many to be just as entertaining as the current ads.
At the start of their commercials on television, an individual would be doing something unintelligent and it would end up backfiring on them. One classic example is when a man was working and pressed a button on a cannon. Rather than projecting the cannonball, it backfired and illustrated a hilarious lesson for the individual who was then covered with smoke and soot. After this illustration, viewers could hear their current tagline, "We all do stupid things. Paying too much for car insurance shouldn't be one of them." In most cases, two separate and equally entertaining ads would be shown back to back since they were very short and well-received by audience members.
Today, most people are familiar with the DAY Gecko. He has been the mascot for the GEICO Company for more than eight years and was created by the Martin Agency. His debut took place in the year 2000. Over time, the DAY Gecko has been making more and more appearances in the ads, as initially after his creation he was only in some of the commercials. Framestore CFC is the organization that created the small, lovable computer generated image gecko that most individuals are familiar with today. His first television appearance took place in 1999. It occurred when the Screen Actors Guild was having a strike. Actors were encouraged, because of the strike, to not work until their demands were met. Many acted in agreement with this recommendation. The CGI mascot insured that the company could still make commercials and enjoy representation, even though it was not by a physically represented actor. Since live actors would have been in violation of the strike, the Gecko that GEICO utilized epitomized the company's creativity and resourcefulness.
The first commercial featured the voice of well-known actor Kelsey Grammer. As the GEICO Gecko, Grammer would plead with the individuals in the audience to stop mistaking his name and type, Gecko, with the popular insurance company, GEICO. Later, Grammer would be replaced with the popular British actor/comedian, Jake Wood. The Martin Agency rationalized this change and the implementation of the Gecko's Cockney accent as something that would shock the audience and take them by surprise, thus ensuring even more attention being paid to the ad. Recent commercials show the Gecko in more blue-collar environments, helping to humanize the Gecko further and also continue to appeal the working middle class citizens around the world. Computer animations have advanced and, with each new advancement in animation and graphics, the Creative director at the Martin Agency worked to make the Gecko appear more lifelike and real, reminding many people of a normal and average individual complete with the charming appeal of the guy next door.
Other commercials offer misdirection as their premise. Initially, the ad will appear to be for a completely different or nonexistent product. Fictional and real-life characters are used in the premises of these commercials, which make the GEICO plug clear at the end. Some of these characters involve the well-known Speed Racer, Bill Dutchess and Tony Little. There are also commercials that initially appear to be in relation to other concepts, such as hair-loss or fishing shows. Some other GEICO commercials that feature celebrities include the likes of Charo, Little Richard, Verne Troyer, DC Douglas, Don LaFontaine, Charlton Heston and Burt Bacharach speaking with real GEICO customers and retelling their insurance stories in more dramatic manners. Through these particular commercials, GEICO seeks to show that they are deeply invested in their customers, their stories and providing them with the best service possible.
As reality television gained in popularity, GEICO cashed in with a particular amusing commercial. A parody of the CBS hit "Big Brother", the commercial viewers were introduced to "Tiny House", which is roughly half the size of the individuals' normal home. There is drama and conflict exhibited for a few seconds until, at the end of the commercial, the concept is revealed to be a plug for GEICO.
Newer taglines include "Why haven't you called GEICO"? and "but it won't save you any money on car insurance"? The premises for the ads with these specific catchphrases include various fictional creations such as phone services, tomato flavored soda products and different fast food meals and offerings. These fictional ads are comparable to the creations put forth by the Energizer Company which proudly and often displays their mascot, the Energizer Bunny.
Previous commercials featured the actor Jerry Lambert in which he speaks with children about insurance fairy tales and other types of correspondence with a fictional customer of GEICO. One segment offers an email from one such fictional customer requesting that the Gecko do the dance, the Robot. This, they explain, would be "the bomb", and so the scene cuts to the Gecko doing the requested dance. Then the scene cut back to Jerry Lambert trying the dance, which he was less successful at performing when compared to either a robot or the GEICO Gecko.
Currently, GEICO utilizes their Caveman character for a number of commercials. Many of their newer commercials are shorter, featuring the Caveman. Most often, the tagline associated with this character is "so easy, a Caveman could do it". Since the Caveman characters in the ads are portrayed as very successful individuals who enjoy fine dining, expensive cars and homes, therapy sessions, news interviews and other situations indicative of a professional status, the Caveman characters are very hurt by the stereotype of the Neanderthal. The Caveman was very successful outside of the GEICO insurance marketing platform. Their characters led to a number of Caveman's Crib websites as well as an ABC pilot for a sitcom based on their situation. This character was created by the Martin Agency as well; they have enjoyed great success in their partnership with GEICO.
In another series, a child challenges an adult who is promoted by GEICO and vice versa. Mike Wallace is the driver for the NASCAR Busch Series Number 7 car. He is also one of the spokesmen for GEICO since GEICO is the main advertiser on the number 7 car. A little boy, Lauren Wallace stars in these commercials, claiming to be a relative of the NASCAR star – and also, a better driver. Lauren argues that Mike Wallace fans and spectators that see his car will only wonder about saving insurance money with GEICO. However, when Lauren Wallace drives around everyone will marvel at how awesome and impressive he is as a driver. The young go-kart racer believes that eventually he will be known to all as the best racecar driver ever, far superior to Mike Wallace.
Newer Lauren Wallace commercials are in the form of an interview. The young boy cannot be seen, but his voice can be heard. He offers such quips and threats as he (Lauren Wallace) being out to win. Mike may be out to sell GEICO car insurance, but Lauren will have no problem putting him in the wall, a distinct and violent racing maneuver. He threatens to do this whether Mike comes around in a go-kart race, grocery market or other shopping store or in taking part in a local remote-controlled boat race. Upcoming ads up the threat level as Lauren declares himself able to strike "as fast as lightning in a bottle".
The main appeal of the GEICO commercials is that they are entertaining and most often keep the viewer laughing. There are a number of humorous commercials in which the character needs to deliver some bad news to another character in the commercial. This could be a pitching coach or general manager from a baseball game relieving the picture or a character in a soap opera dealing with some dramatic new development. After revealing the bad news, they offer that they also have some good news: they just saved money on their car insurance.
The Real Scoop is one of the latest fictitious GEICO commercial campaigns. They feature such stars as Fred Flinstone and a Cabbage Patch Kid in environments that are similar to the E! True Hollywood stories that air on the E! Entertainment network channel. All of the characters featured in the GEICO commercials have vehicles which are complete with GEICO insurance coverage.
Social networking sites have enjoyed immense popularity in recent years and GEICO has taken advantage of this trend. My Great Rides is a social networking site for GEICO customers that own motorcycles. Stories and pictures are offered and site members can comment on and post their own experiences, pictures and ideas.
YouTube also offers a unique outlet for GEICO and GEICO commercials. Some of the commercials are created by Brandon Hardesty and offer a range of emotions. In the end, the commercials offer an older tagline of GEICO's, "There might be better ways to spend fifteen minutes online". Other commercials are not realistic ones, portraying such scenes as mattresses participating in fisticuffs in a hallway. Many of the YouTube commercials are portrayed in the same manner as those on television – they are played back to back.
GEICO's Competition
GEICO understandably has a bit of competition when it comes to vehicle insurance coverage and other offered services. In response to one competitor's claim that they can offer quotes from GEICO, Progressive's rivalry with GEICO has been taken to new levels as GEICO counters. GEICO maintains that the only way an individual can get quotes from their company is by contacting their company directly. Other rival companies include, in addition to Progressive, State Farm, Allstate and another military insurance company, USAA.
More about GEICO
Despite the fact that the Government Employee Insurance Company (GEICO) has the term "Government" in its name, this can be misleading. The organization is not a government corporation and has no official link to the government. Rather, GEICO offers personal auto insurance.
Married couple Leo and Lillian Goodwin founded their insurance company in the 1930s with a very simple concept. They wanted to be able to offer cheaper automobile insurance coverage to government employees as well as military personnel in all different branches of the United States military. This presently includes the Army, Navy, Air Force, Marine Corp and the United States Coast Guard.
The United States military and employee personnel were targeted during the time of the Great Depression. These individuals were specifically chosen by the couple for a reason. Leo and Lillian Goodwin decided that since the military members and many employees were contracted by and to the government, they represented a lower risk in individuals who would not be able to pay their policies. Since they were some of the only people that had steady and continuous work, the Goodwins decided that even in a time of business risks, this would be a successful plan. The coverage was eventually offered to the general public. However, the general public had to wait for their coverage until after the 1970's. This was when a necessary technological advancement was finally made – driving records became easily accessible and computerized.
There are a number of advantages to purchasing insurance from the GEICO Company. While a number of companies offer personal insurance coverage, GEICO offers a particularly impressive degree of personal service. This service is extended to customers regardless of what means they are utilizing to contact GEICO. This includes telephone services, internet services and office visits. Policy holders are able to enjoy savings specifically as a result of the company choosing not to spend money and capital on insurance agents for the company. Instead, GEICO has been able to employ a small number of field agents which can help people with their insurance needs. At the same time, it is still important to note that most of the agents that represent GEICO are found near military bases. These individuals are known as GEICO Field Representatives, nicknamed GFR's.
Wholly owned as a subsidiary of Berkshire Hathaway, GEICO has continued to enjoy immense success. Still growing and evolving, GEICO currently provides insurance coverage and insurance policies on more than ten million vehicles. More than seven million individual policies have been issued by the GEICO insurance company since it was started by a modest and entrepreneurial couple in the midst of the Great Depression, in 1936.
