Kelly, Matthew, & Supa, Dustin W. (2012). Fortune 500 Foray: How the Nation’s Largest Insurer Leverages Social Media. Public Relations Journal, 6(4), 1-21.
The role of social media in large corporations is constantly under scrutiny, especially in a highly regulated industry such as insurance. This study explores how State Farm Insurance Company adopted social media as a tactic for relating with consumers. It explores both the strategic and tactical application of the use of social media, and highlights both the positive and negative ramifications of engaging with publics via various social media. This study showcases the challenge for State Farm not only in dealing with regulatory communication restrictions, but also in dealing with, at times, a hostile yet captive consumer audience. Ultimately, the study examines how a major, established corporation can adapt to new communication tools, and the growing pains that come with that adaptation.
Case study method using both historical and primary source material, as well as participant-observation.
1) Prior to full engagement via social media, State Farm’s ranking in a customer-loyalty index was third, though they were the largest national insurer. Additionally, other insurance companies have, for the past several years, been making substantial gains on State Farm in terms of market share. Part of State Farm’s social media efforts were an attempt to reestablish its foothold as the industry leader.
2) State Farm’s success on social media has primarily come in the form of partnerships with organizations not normally associated with the insurance industry. However, State Farm’s use of Twitter is primarily a customer-driven communication tool.
3) State Farm leverages multiple sites via each social media platform in order to best serve its consumer base, and consumer needs. However, it has been subject to criticism by users in the same platforms. By diverging its social media interests, State Farm has more successfully segmented audiences, and can more readily respond to critique via social media.
4) State Farm has established an official training program to help agents understand how to better leverage their social media in their communities, prior to the establishment of the training program, State Farm discouraged usage by its employees. This is, in part, due to the sensitive nature of the insurance industry.
Implications for the Practice
While this is a case study and therefore cannot be generalized across the public relations discipline, this study shows how an organization can adapt its current communication efforts to a social environment. It highlights both the successes and failures of a major company, and may be beneficial for practitioners as it showcases potential pitfalls and also how to leverage social media. Of particular interest to the field may be in examining how State Farm was able to successfully leverage social media without becoming a social media enterprise, but rather diverged its corporate interests to address specific markets within its consumer base.
The full text article can be downloaded for free at: http://www.prsa.org/Intelligence/PRJournal/Documents/2012SupaKelly.pdf