As someone who worked on the State Farm account for a few years, I view the company’s latest concept with more than a casual interest. The company with the familiar “Like a good neighbor…” jingle is about to launch an entirely new retail idea smack dab in the middle of my neighborhood in Lakeview. And at least at a first glance, I think they’re on to something good that more in the insurance industry might want to take a closer look at doing themselves.
State Farm Next Door opens August 1st and the concept is a more open, casual community space that offers free Wi-Fi and coffee (via its Next Door Cafe) as well as personalized coaching/small group classes on financial matters that range from paying off student loans to learning how to budget your finances.
This may not seem like a huge departure from the typical agent office, but it is. Here’s why. For a long time, State Farm talked about the fact that their agents live in the same community as their customers. Which is normal. But even though you can continuously say, “We live where you live,” there’s nothing quite like actually demonstrating it visibly by being more of a central hub.
Plus, there will be no actual insurance sold at State Farm Next Door so they aren’t cannibalizing their own agents’ efforts by selling policies here. There will be financial consultants and all the services at Next Door are free. Personally, I think the latter part of that sentence is important for bringing down some barriers among younger people who would normally walk on by because they don’t see the point in planning when they don’t even have the funds to pay for ongoing classes.
Stepping out of the “Auto/Home/Life” rate rut.
Let’s be honest. You first walk into or call State Farm, Allstate, Farmer’s, etc. because you have a need for auto, home or life insurance. You need to get covered, you compare rates, you buy. You don’t like your rate after a while? You look around, you compare again, you buy.
Fighting a branding battle based on rates doesn’t benefit State Farm. I never thought it has. It’s territory that Geico and Progressive have owned quite well for years. Even when State Farm talks about the dangers of “cut-rate car insurance,” they’re still planting the seed of shopping based on rates and playing into the hands of their competitors.
That’s why, even though the newest ad work for State Farm is entertaining, that’s not necessarily what I see pulling people in. I see the Next Door concept having real upside by broadening out from buckets of insurance sold from an agent behind a desk into more generalized classes on finance and budgeting for 20-somethings and 30-somethings in the neighborhood who needed that guidance but couldn’t find it up to this point. You don’t have to walk into Next Door with an intent to buy. You walk in with an intent to learn (sorry, I don’t think I’ll walk in with an intent to just have a cup of coffee when there’s Starbucks and Caribou close by, but I appreciate the offer).
No hard selling, new look
In a way, State Farm’s Next Door feels a lot like smart social media itself – not a hard sell but a place to inform a community. And possibly learn from it along the way. I also like the fact that State Farm has the guts to do a true departure design-wise (different logo, wood background) for this sub-brand of Next Door, because in this case anything that looks too close to the familiar auto/home/life color palette would be a bit of a turn-off. A bright red building would scream “State Farm,” but it wouldn’t say “come in with your financial questions or just to hang out.” The location doesn’t hurt being steps away from Trader Joe’s and the Diversey/Clark/Broadway intersection.
Some may think the idea is a stretch, but I disagree. I think for a brand that’s been around for as long as State Farm, it’s a stretch within their brand that makes sense and might even be overdue. Even more so than insurance and agents, State Farm is supposed to be about, well, being a Good Neighbor with warm, friendly guidance. I think the Next Door concept is authentic and true to that ideal. Will that translate into a steady flow of interested customers? Well, we don’t have to wait until the doors open. Let’s hear from you:
Does this type of cafe concept with free classes, coffee, Wi-Fi and “no strings attached” appeal to you from a financial services and insurance company?