CMO50 2020 #8: Jonathan Kerr

  • Name Jonathan Kerr
  • Title Chief marketing and delivery officer
  • Company Auto & General (Budget Direct)
  • Commenced role July 2020 (CMO since March 2013)
  • Reporting Line Insurance Australia
  • Member of the Executive Team Yes
  • Marketing Function 5 Direct Reports; 67 in team
  • Industry Sector Insurance
  • 2019 ranking 8
  • Brand Post

    As the coronavirus crisis began to emerge, Budget Direct did something almost counter-intuitive. The challenger insurance brand decided it would still bring out its 20th anniversary campaign, despite the rising sense of uncertainty and upheaval. "We made the big decision to bring forward the campaign. To effectively swim in our own lane," Jonathan Kerr told CMO.

    It meant overcoming many challenges, not least of which was the sudden shift to working from home, but it turned out to be a fateful, and successful, decision in terms of sales and how it was received. "It really was quite remarkable," Kerr said.

    Marketing effectiveness

    As the chief marketing and delivery officer, a key element of Kerr's role is responsibility for driving growth in terms of sales and premium. "Entering FY20, we were 10 months into Budget Direct's highly successful 'Insurance Solved' campaign. Regardless, I challenged my team to once again grow us faster while reducing our average cost of sale," Kerr said.

    As a result of the strategic shift, and with excellent creative execution, the insurer was able to reduce average sales cost while also increasing sales."Working with our in-house media team, in response to the significant media consumption channel-shift we had observed, I decided to run a six-month test to dramatically change our media mix. The strategy was to deliver the same high quality brand campaign, but deliver many more brand and video impressions, while moving to more cost-efficient channels," he said.

    Influencing change

    With COVID-19, Kerr radically changed the media strategy and, despite the crisis, clicked over with the fourth consecutive year of over 20 per cent growth, significantly outpacing rival insurers.

    The challenges proved a catalyst for the team. "When you're going through those moments, having clear leadership about what mountain you're about to take really is important. And we really were on a mission, we brought it to life, and it went really well," he said.

    And looking ahead, the big challenge is maintaining the brand's strong growth. "I don't think there's been a better time for what our proposition is," Kerr noted. The mission is to stay relevant, "on point in terms of delivering real value - not just talk - in terms of what we put into market. And at the same time having very differential marketing and engaging marketing that leads the public to optimism about the journey that we're all going through together."

    Data-led marketing

    At Auto & General (Budget Direct) Kerr has built a full in-house team of marketing, data and digital capabilities. "I designed this structure to bring together the disciplines of lead generation, online quote and sale optimisation and data focused performance improvement under one-roof," he said. "This year as part of the ongoing mission to cost effectively increase yield from our online quote system, I challenged our data science team to build a machine learning model."

    This project is as example of setting up a department in a way that feeds innovation and optimisation and leads to rapid performance improvements. It also required the team to work with its call centre operations team to stand-up a new outbound calling capability to deliver this solution.

    They will call people who are predicted to value a follow-up call and, crucially, avoid bothering customers who are predicted to just want to engage with the insuurer online. "It's a great example of using data and technology to deliver a customer-focused solution that is a win for customers and the business," he explained.

    CX capability

    In the last financial year, Kerry said the team has also built and launched Budget Direct Money Manager, becoming the first insurer in Australia to build and launch a full personal financial management solution for its customers.

    It's a smart tool that speaks to its varying types of customers."Budget Direct as a brand attracts an interesting mixture of cost-conscious customers as well as affluent, finance savvy customers, who know a good deal when they see one. That is why our proposition of 'Award Winning Insurance For Less" resonates so well across our key segments," Kerr explained.

    "We identified that these key segments value and enjoy doing a good job of managing their money, so we decided to launch a retention and data mining 'marketing as a service' offering to our customers. The beauty of our offering is that Budget Direct Money Manager is free to our customers as long as they maintain an insurance policy with us," he said.

    "Within Budget Direct Money Manager, we are able to help customers better manage their finances while also spotting opportunities to save them further money based on our product offerings."

    Kerr said that the exchange of value is done in a very transparent way and is designed to build its reputation with  customers for being smart and adding value throughout the year, even if they don't need to claim on their insurance policies. "Despite only launching several months ago, Budget Direct Money Manager already has thousands of users and very high product satisfaction scores," he said.

    Commercial acumen

    Now fielding a full in-house media planning and procurement function, Budget Direct work directly with all the media owners and independent benchmarking has shown it has one of the most effective media functions in Australia. This means it can rapidly and nimbly move the levers when circumstances changes - like a global pandemic.

    "During March 2020 it became clear that advertisers were going to significantly pull back their spend due to COVID-19. As a result, a relatively short window of opportunity would open up, to strike long-term media deals with the main media channel owners at unprecedented rates," Kerr said.

    A board-approved plan was executed that has given the insurer a significant commercial advantage in this financial year across many media channels. "This is an example of the clear commercial advantage of our in-house model," Kerr said.

    "I was able to rapidly decide to run a six media channel, procurement process concurrently with the full backing of the board in order to grab this huge opportunity. I didn't have to work through third parties to set up a process. We ran the entire process ourselves and all the media owners trusted us to be fair because of the track record we have built up with them over the years," he said.

    "This is true commercial marketing, strategy and structure in use and has taken years to develop."

    COVID-19 innovation

    As COVID-19 became a reality in March 2020, Kerr quickly reviewed everything he could find on how to market your way through a downturn. "I decided that there was a huge opportunity for Budget Direct to out navigate the competition during this time," he said.

    "The case studies I read certainly suggested it was time to double down on the brand advertising and SOV, but provided nothing about what tone of advertising would be appropriate to use at that time. I quickly commissioned research from Bastion Insights, to see if my hypothesis was correct."

    Based on this research that said the last thing people wanted to see in advertising at this time is anything that reminds them of COVID-19 and knowledge that we had a triumphant, fun advert in post­ production, Kerr presented his strategy to the board.

    The plan was to immediately switch out its cinema and outdoor advertising, reinvest in TV and upweight online video and BVOD by over 300 per cent in response to sudden swing back to TV and small screens. It also included securing the extraordinary distress rates for an April/May/June media push, invest in additional media over the period, and bring forward its triumphant and positive 20th anniversary advert by two months.

    Then the plan was to build a follow-up campaign that would communicate just how much its customers saved
    by switching to Budget Direct on motor and home insurance. The board supported his strategy and after a remarkable effort from the team, it went live in April.

    "By the end of April we knew we had nailed it. While our competitors were pumping out violins and 'we are all in this together', Budget Direct had launched a campaign with all 1700 of our employees charging across a battlefield, with a pledge to help save Australians on their insurance," Kerr explained.

    "In May 2020 we sold significantly more motor and home policies than we did in a strong May 2019 and then in June 20 still deep In the first COVID-19 wave, we set an all-time monthly sales record for motor and home sales."

    "FY20 was a year like no other. The great news though, for everyone at Budget Direct, is we also delivered results like no other during this extraordinary time."

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