The challenge

As a direct operation, Direct Line doesn’t have a high-street presence - it relies on advertising to keep its brand alive and encourage consumers to phone or click.

The challenge in 1990 was to utilise the power of the brand in a market driven by promiscuity, build loyalty when switching brands was positively encouraged and move from merely operating in the motoring and home insurance markets to a much broader business base.

In addition to these serious challenges, the company has also had to contend with more and more competition from both established brands and, with the arrival of the Internet, new direct rivals as well. A price war in the mid-nineties also added to the pressures on the direct insurance market in the motoring sector.

Direct Line has succeeded despite such harsh conditions because it has a strong brand and an instantly recognisable icon – the little red phone – and a jingle that’s hard to forget.

The TV solution

The little red phone was placed centre stage in 1990 to rescue a motorist in peril as the hero of Direct Line’s TV advertising. It has since appeared in more than 30 TV ads as well as countless press ads, posters, online banners, items of direct mail and even on radio.

The phone served to build rapid awareness, with the public responding to its slightly brash attitude and memorable jingle. High brand awareness enabled Direct Line to outperform its rivals and grow market share and in-force policies significantly.

By 1995, however, the strategy needed to be revamped. The arrival of more direct insurers combined with the arrival of the Internet triggered a price war, hitting policy growth and share. The solution was to invest in the brand and move the little red phone to the sign off position rather than the hero role.
The new positioning would focus on service as well as price. The new ads featured conversations between customers and Direct Line operators, highlighting the new message and building on five years of emphasis on pricing.
Placement of ads first and last in break for the launch of direct Line’s website helped to demonstrate how fast it was to get a quote online, helped to generate more business and increase market share.

The strong brand provided a platform for adding new products to the Direct Line offer. In 1993 it launched loans, 1994 saw the addition of mortgages, life insurance came on board in 1995 while breakdown was added in 1998. These were launched using DR TV and specialist print titles and helped broaden the business’s revenue base.

By 2002 the concern was that increased spend might make the brand tired and so a new warmer style was adopted to show people in every day situations benefiting from Direct Line’s great service and value.

In 2004 it added a new element to the media mix by sponsoring all of Channel 4’s property related output – the 4Homes strand. Shows such as Location, Location, Location, City Gardener and Grand Designs were all sandwiched between Direct Line credits, which encouraged consumers to go online for a quote.

Although direct services are classically associated with DRTV, Direct Line has stood out from its competitors by investing a higher proportion of its budget in more expensive brand building communications than competitors.
Since 2004 the creative has developed further, though with a continued focus on service messages.

The TV campaign has moved from a product focus to an overall brand campaign, which covers car and home insurance at the same time. The current execution features a cross section of UK consumers being asked their views on car and home insurance and assures them that at Direct Line they can get ‘a good deal better’ on their insurance.

The results

In total Direct Line has invested £249m in advertising in the 12 years until 2002. The result has been incredibly high brand recognition. The little red phone attracts 97% identification with Direct Line and front of mind measures are now well ahead of rivals with spontaneous brand awareness at 70% compared to 54% for its nearest competitor.

The shift in strategy since 1995 has also paid dividends providing the company with a broader competitive proposition. Not only is the price message still core but also value and service scores are now ahead of its rivals.

Every pound spent on advertising has generated significantly more in return and that excludes the continuing value of new business, continuing value from existing customers and the extra value that Direct Line adds to the Royal Bank of Scotland’s market capitalisation.

That investment has generated a massive payback. Not only is Direct Line significantly larger than it was in 1990, but the strength of the brand has helped improve consideration and conversion and enabled the company to reduce costs.

Direct Line has used TV extensively to help it play a vital part in the transformation of the UK’s domestic insurance market since it was launched in 1985. It now has more than 4m UK customers who buy amore than five million products each year. The company also taken its business model into Spain, Italy and Germany.

“Direct Line is a great British brand, with its roots firmly cemented in providing great value for money products, underpinned by excellent customer service.

“We are the brand leader in our category, but by no means are we complacent as we continually strive to improve and innovate for the customers we have today and the customers we hope to attract in the future.”