How Safeway Insurance Targets the Hispanic Market

Safeway Insurance was looking to boost its presence and name recognition in face of competition from better-known rivals with significantly higher advertising budgets.

It also wanted to sell policies and build brand recognition among Mexican American consumers living in Chicago. So it relied on a multichannel marketing approach, said Gus Kostakis, vice president of SourceLink, Safeway’s agency.

“So Safeway wanted to figure out if it could go directly to the consumer and minimize churn,” said Kostakis during a May 1 session at the National Postal Forum in San Diego.

Safeway, which operates in 49 states and sells primarily through 2,500 independent agents, in 2009 established Safeway Direct, a company that deals directly with Hispanic consumers at the neighborhood level.

Rather than imitating its larger competitors, who might heavily advertise yearly savings of 15% to 20%, Kostakis said Safeway opted to advertise insurance that costs only $25 per month.

Safeway’s efforts included billboards, direct response radio and television. The insurance company also sponsored the Chicago Fire, the local Major League soccer team; one of the Fire’s players is Blanco, a popular Mexican soccer star.

They all came before Safeway used direct mail, which it employed to “close the deal,” Kostakis said. “The plan with Safeway was for three or four months to go with heavy television, outdoor, radio, sponsorships with no direct mail at all,” he said.

Why is that? Direct mail is less effective when trying to promote a company that’s not too well known, Kostakis said.