With the reduction in performance marketing spend, The Zebra decided to increase the volume of its TV ads. And after getting a hall pass from the board to throw the 2020 plan out the window, the new plan was to weather the storm. Despite the rocky start, Melnick believed that demand will come back as insurance is a mandatory product. However, the increase in cost and consumer uncertainty made these channels more expensive and less efficient, leading The Zebra to cut their performance marketing spend significantly in April. Not knowing how long the disruption in traffic will last, management decided to rely more on performance channels to drive users to the site. The Zebra’s management took on this challenge. They argue that businesses should take on the challenge of making well-defended, case-by-case recommendations about where to cut spending, where to hold it steady, and even where to increase it. As a result, businesses typically cut costs, reduce prices, postpone new investments, and make the mistake of slashing marketing across the board. During recessions, consumers set stricter priorities and reduce spending, which leads to a drop in sales. Jocz identified patterns in consumers’ behavior and firms’ strategies that either propel or undermine performance. In a Harvard Business Review study titled ‘ How to Market in a Downturn,’ authors John Quelch and Katherine E. Further, traditional media outlets will be impacted the most, with TV spend reducing by 13.8% and newspaper ad buys going down 19.5%. For brands, this is easier said than done – in a CNBC article from May, it was reported that the ad market will reduce by 8.1%, or $49.6 billion, compared to a previously forecasted growth of 7.1%. People were searching ‘where can I find toilet paper?’ They weren’t searching for auto insurance.” And while The Zebra did see a shift with more standard and preferred customers coming into the market as they’ve become more cost-conscious, it wasn’t enough to make up for the traffic disruption.Īmerican author, advertising executive, and politician Bruce Barton once said that in good times, people want to advertise in bad times, they have to. “We have a great position in SEO and we saw a drop like everybody else. “As far as the auto insurance industry goes, COVID hit in probably the worst time,” Melnick states. The startup experienced the usual spike at the end of February, which normally continues well into April, but in the second and third weeks of March demand dropped. The pandemic hit The Zebra at the peak of their high season as car sales increase during the spring months. “Our objective is always to lose as little money as possible and keep heading towards profitability, but we got here sooner than we expected.” “We kind of became profitable accidentally,” Melnick shared in a Zoom call alongside Martina Hahn, chief product officer at The Zebra and his former colleague at KAYAK. In May, it recorded net revenue of $6 million and that number grew to $8 million in September. Three years later and the KAYAK aspirations are still aspirations, yet The Zebra has achieved a positive image few insurtechs have by becoming profitable. “The Zebra team has the product-first DNA and momentum to pull this off, and we’re thrilled to partner with Keith Melnick – who we worked with on KAYAK for over a decade – and the whole The Zebra team to help make this vision a reality.” “There’s an opportunity in insurance to build the go-to digital brand for comparison shopping, just as we’ve lived through from the beginning with what KAYAK did for travel,” said John Locke, a partner with Accel during The Zebra’s Series B round in 2017. But over the years the startup’s image began to fade when the founders passed the torch to Keith Melnick, the former KAYAK president who was brought on as the new CEO to turn The Zebra into the KAYAK of insurance. Includes the uncheckable checkbox, a short-lived marketing gimmick, and the real zebra it once brought to a party. Companies are built in the image of their founders.
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