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Brand Battle: Blue Cross and Blue Shield vs. Aetna

Brand Battle: Blue Cross and Blue Shield vs. Aetna

How a giant holds onto its lead

Summary: Two brands face off, measured across brand impact determinants and evaluated by their performance data in our latest study The 360° Advantage: How Whole Brands Dominate.

In this Brand Battle, Blue Cross and Blue Shield—an association of regional non-profit health insurance carriers—takes on Aetna, a deep-pocket national brand. While each of these brands can use insights from their Whole Brand Index scores to chart a competitive path to growth, only one wins the old-fashioned way: by staying true to their mission and never letting up. 

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Sometimes power speaks for itself.

Such is the case of Blue Cross and Blue Shield, the national brand name that overarches regional Blue Cross systems throughout the United States and is the number two brand in terms of WBI score in our study.

While the health insurance industry is widely vilified by consumers, Blue Cross has long been both the most recognized and most trusted brand in its field. It currently provides health coverage to one-third of the US population— 106 million people.

Our study explains the sources of this unusual dominance. As the brand dimension chart shows, it is the near equivalent of a straight-A student.

In the back of the pack among health insurers in our study is Aetna, a well-known insurance brand who goes head-to-head with Blue Cross in most markets. The two compete for group plan services to employers along with individual plans sold to both under-65 consumers and to Medicare recipients (generally over 65). Aetna is by no means a weak brand — it, too, is a household name.

It recently enhanced its position in the healthcare market by being acquired by the retail drug brand, CVS. The intent behind this merger was a more robust alliance for two brands serving two different sides of the healthcare market. So far, it has not propelled Aetna any closer to Blue Cross. As the scatter-plot graph below shows, the only brand anywhere close to the “Blues” is United Healthcare.

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On paper, a brand like Aetna seems as if it could use its own brand equity to cut into Blue Cross dominance. It is, after all, a national brand with extremely deep pockets and investor support. Blue Cross systems, while financially strong, are regional operations and are, for the most part, nonprofits required to serve community needs to maintain their tax exemption.

Yet Aetna has not been able to cut into the Blue Cross dominance. Why? In many respects, Blue Cross is a classic example of what a traditional iconic brand can achieve if it stays true to its roots. But “Blue brands” do more than that: they perfected whole brand behavior long before anyone thought of it as a concept.

In our study, Blue Cross was the top choice an average of 48% of the time across all 10 of the key brand dimensions, second only to Nike. That data-point proves what competitors have long known about them: they seldom miss a beat. They build gold standard products—the largest and highest quality networks in their markets. They back it up with consistently high standards of customer service and have led the industry with a satisfying customer experience that delivers what people need: peace of mind. They are as widely recognized as Coca-Cola and they know how to tell their story across all communication channels.

In a category that many see as price and commodity-driven, the Blue Cross performance in the marketplace shows they are anything but that. Twenty-three percent of consumers are willing to pay full price for Blue Cross even when competitors discount their rates, four times the average of the typical brand. Plus, 30% have recommended the brand to others in the past six months and, even after 75 years of familiarity, 26% still see them as a brand on the rise.

As the brand dimension chart shows, Blue Cross holds a consistent 20-point lead over Aetna in virtually all areas. Realistically, there is only one strategy available to a brand like Aetna:  look for incremental gains and don’t count on Blue Cross to slip up. Disruptive innovation can’t be ruled out in any line of business, but when you are chasing a top performer with decades of success behind them, in a regulated industry dealing in life and death, winning with a lightning bolt isn’t a serious likelihood.

Aetna may be able to build dominance in vertical markets. The CVS alliance could give them a segue to retail customers where they might gain a path to more individual business through the pharmacy lane—a potential product lure for Medicare members. Aside from that, Aetna should take a hint from Blue Cross: go heads down and do the best in every brand dimension.

The health insurance industry has one of the highest correlations between Whole Brand Index and Total Performance Score of any category, with r2=0.91. If they steadily improve their WBI, their TPS will rise and they will steadily move up along the regression line.

They would be smart to break out the pack occupied by them, Cigna, Humana, and the Anthem brands, who are for-profit Blue systems who don’t prominently display their Blue identity. Concentrate on winning against those peers and before slugging it out with Blue Cross.

To hold their dominance, Blue Cross needs to spend their reputation capital wisely. Never forget the George Romney assessment of GM in the 1980s, “Nothing is more vulnerable then entrenched success.”  

Never remain entrenched—work to constantly improve.

Read more about The 360°Advantage: How Whole Brands Dominate.

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Unless otherwise stated, Barkley does not have a business relationship with the brands mentioned in this article. All Barkley clients are clearly noted throughout the Whole Brand Index and Whole Brand Project website.


Barkley US

Sep 15, 2020

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Brand Battles, Healthcare, Marketing, Modern Consumer, Research, Whole Brand

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