In March we launched a new product called legal expenses (terrible name, great product). I was excited about this product because it has a myriad of features that solve problems freelancers face regularly:
- A lawyer chases overdue invoices for you
- There’s a 24/7 legal advice helpline
- You’ll receive loss of earnings from attending jury duty
I’m painfully aware of the number of customers I have (and any insurer) that begrudge buying insurance. It’s considered money down the drain because they don’t foresee a situation happening where they’d need to use it.
That’s a fair assumption. Only 3% of our customers have made a claim, but the value of insurance when it’s needed is astronomical considering our average claim is £17,000. For most people, however, insurance is a “check a box” purchase—as in they’re buying it to satisfy a request from a client or fulfil a clause in a contract.
Because of the scarce nature of having to use your insurance, I knew I needed to bake more value into With Jack from day one. What made me excited about this product was that it could deliver value immediately and on a more consistent basis than our other products. I believed this launch would inch With Jack towards product / market fit.
What Does A Successful Launch Look Like?
I’ve been involved in enough launches over the years to know that it’s dangerous having high expectations. Launches typically don’t perform as well as our pre-launch bubble and cloud of optimism allows us to dream.
But this time was different. I had high expectations. Why? Well, I now had an existing audience to launch to (500+ customers). I’d been serving this audience for 2+ years and had spotted trends and patterns, so I knew this product could help them. Lastly, I have a good understanding of the problems my customers face and how to talk about this product in a way that resonates with them.
Before any launch it’s a good idea to determine what you want to get from it. That way you can devise a strategy to reach your goal and gauge whether your launch has been successful. I expected this product would do well because of:
- The positive reaction I got when talking about it in the build-up to launch
- Its low price point (it only costs £5.50 a month)
- The immediate value it delivers unlike other products that are triggered if there’s a threat of being sued
It’s embarrassing to admit this because of how wrong I was, but I expected 50%+ of my existing customers to add this to their policy via a mid-term adjustment or upon their renewal. This would give me a huge spike in cashflow (I estimated £5000). For new sign-ups I expected a similar rate of adoption.
That wasn’t so.
Only 15 existing customers added it to their policy. I contacted around 300 so it was a low up-take. New sign-ups performed better, but it was a quiet start. It took 2 weeks post-launch before customers started buying it.
Now we’re 1 month post-launch and 40% of sign-ups are adding it to their quote. I’m happy with that. Sadly, the adoption rate with existing customers has remained poor.
There was no instant cashflow boost, it didn’t inch us towards product / market fit like I expected it to, and my average commission per policy has only increased by £5.
What Went Wrong?
A number of factors can contribute to an underwhelming launch. My first assumption is that I did a terrible job marketing it. Here are the tactics I used to spread the word.
- Tweets from both my personal and business account in the run-up to launch, which had good engagement… for an insurance tweet
- Two blog posts; one with an overview of features and the other with real stories from the insurer
- Corresponding social media posts via Instagram, Facebook and Twitter to promote the blog posts
- Daily tweets highlighting each feature of the policy
- Email sent to mailing list with 200 customers opted in
- Personal outreach. I contacted existing customers individually
The blog post had 1000 visits. The tweets garnered 25,000 impressions and 900 engagements. The newsletter had a 72% open rate, but only 7 clicks! Bottom line: it’s difficult getting people excited about or engaged with an insurance product.
The second assumption is that I’ve overestimated how problematic late payments and legal advice are for freelancers. Sure, it’s an issue, but maybe it’s not a £5.50 per month issue.
My final assumption about why my product launch failed is that… it’s insurance. And people begrudge paying for insurance. And I can’t change that. Not even with an incredible product like this.
Here’s a common reply I got from existing customers who didn’t to add it to their policy;
"Looks good, but I think I'll leave it for now. All of my clients pay on time. I'll come back to you if that changes."
I don’t know much about psychology, but a big problem I’ve faced with selling insurance is mindset. People rarely take preventive measures if they’ve never experienced a similar problem.
I understand that mindset. I used to have it. Prior to my house getting broken into and £5000 of gadgets being stolen, I was relaxed about security. I never thought that kind of thing would happen to me! Now I never leave the house without setting the alarm, but it took a bad experience to put me into that risk-averse mindset.
Here’s an analogy I’ve used before with insurance. Saying you’ve never had a problem before and therefore don’t need insurance is similar to saying you’ve never had a car accident so don’t need to wear your seat belt. I’ve never had a car accident, but I still take preventive measures when driving and buckle up just in case.
Convincing people to change their mindset is challenging. I haven’t figured that part out yet.
From Bad To Worse
Launch was overshadowed by a technical hiccup. I won’t go into detail as we’re still getting to the bottom of it, but anybody who bought a policy with legal expenses had to resubmit their details for a second time as some data wasn’t submitted properly.
It took a while for me to spot this bug because of how quiet launch was (like I said, it was 2 weeks before somebody bought this product). Going back to every customer who had purchased legal expenses and asking them to resubmit their information wasn’t ideal.
I was worried people would be angry or that we’d lose them altogether.
However, this was a great lesson in how to handle mistakes and it turns out the best way is to be as transparent as possible. I told every customer that had been affected that we’d launched a new product, there was a technical error that we’re fixing, but they’d need to resubmit their details again. To apologise for the trouble I either offered a discount on their premium or an Amazon voucher.
And you know what? Not one person was angry. Not one person gave me grief about having to fill out the form again. Not one person decided against signing up. They all cooperated and remained customers.
If you face your own technical glitches, be upfront about it. Be human about it. A little bit of generosity goes a long way, too. Either discounting the product or offering them a gift voucher.
I'm Not Giving Up
After launch I came across a blog post by Josh Pigford titled, A post-mortem on shutting down a product we just launched”. Josh talks about validating their product by scheduling video chats with their target customer. He said:
The response was universally positive. “This solves a huge problem for me!”, “I’d definitely pay for this.”, “Please tell me this will be available soon!”
When it came down to having potential customers hand over cash for their product, they hit a wall. Not a single person was willing to pay. I resonated with this blog post because a lot of my expectations about how this product would perform was based off feedback.
Yet again I’ve learned that hearing nice things about what you’re building isn’t enough. The only validation is people paying you money for it.
Even though launch was underwhelming, I’m now getting enough traction to continue pushing this product. 40% of new customers are adding legal expenses to their policy
Upon reflection I don’t think this is a marketing issue or that late payments aren’t a huge problem (visiting the freelance sub-reddit is enough to show this problem exists). I do think it’s a mindset issue and one I’ll constantly be battling against from working in insurance. “I haven’t had this problem yet, so I probably never will.”
I haven’t figured out how to get around that yet, and maybe I never will. But one thing is for sure: I have to get used to playing the long game in insurance. I don’t think I’ll ever see an explosive launch. It’s the nature of the industry I’ve chosen to build a business in.