New Progressive Channels - Essay Example

Before the introduction of the toll-free telephone service, it sold its auto insurance through three main channels. The three channels were independent agents, direct response, and captive agents. Independent agents had the task of marketing Progressive while still representing other insurance companies. They provided insurance counsel through face-to-face interaction. They were expensive and would charge up to 20% of premiums. Captive agents comprised a network that sold Progressive’s policies directly.

Through direct response, Progressive made use of television, radio, and magazine adverts to urge consumers to consider their insurance quotes (Kotler & Keller, 2011). The new marketing channel was effective In 1992, Progressive started the Express Quote service. It was a toll-free minute 15-minute call service for consumers in California. In 1994, it availed the service to other states which helped it grow despite its rates being the lowest.  The marketing channel saw an increase in policies written by up to 44% in regions where the service was exclusively advertised and by 30% where it was not.

Using the multiple distribution channels saw tremendous growth and success particularly because of the toll-free call service.  The company would receive over 50,000 phone calls each day. Calls on existing claims and new loss-report calls are channeled to the appropriate call center. Representatives answering the calls would interview customers, record their accident statements, and enter their data into the company’s mainframe within a few minutes.