ICBC
By Dave Doroghy
This story hinges on the idea that a piece of metal with the right design and surrounded by some clever marketing will shake about $100 per person out of a lot of consumers’ pockets. This particular piece of metal is more useful than a pet rock but the marketing idea was what people were really buying.
In the fall of 2005 we approached ICBC, the government authority that insures all cars registered in the province and issues their license plates. Fortunately we were able to start right at the top: through an introduction from a VANOC board member a meeting with the president of ICBC had been arranged. On a cold blustery October day Dave Cobb, Andrea Shaw and I took the SeaBus from our old offices on Pender Street to the giant automobile insurance company’s headquarters on North Vancouver’s shore. As we sat on the SeaBus bench, strategizing while we crossed the choppy waters of Burrard Inlet, we were completely ignorant of the fact that our sale with ICBC was actually pretty much a done deal.
First, ICBC President Paul Taylor was a huge Olympics fan. He had lived in Calgary during the 1988 Games and had witnessed firsthand the transformative nature of the event. He took the entire 18 days of the Calgary Games off work to serve as an Olympic volunteer. It was always a good sign when I walked into the office of the president of a large company and he had Olympic memorabilia from the Calgary 88 Games hanging on his walls. During our meeting Taylor admitted that he was a bit of an Olympic junkie and how strongly he believed in what we were doing for British Columbia and the rest of Canada. He said we could count on ICBC’s support.
Second, there was political will from the very top to do the deal – the premier’s office wanted it. Issuing a license plate to support the games was not a new idea but doing it early and doing it well was. What followed that meeting was two years of trying to navigate the terms of a politically sensitive sponsorship agreement through a never-ending, long, slow-moving labyrinth of bureaucrats, legislators, provincial finance committees, sub-committees, ICBC managers, politicians and, finally, the premier. Everybody got his or her fingerprints on this one. For a long time it moved at a snail’s pace. But thank goodness we started working on it five years out so that we had sufficient lead-time to ink the deal and establish the program. In the end it took over two years to close the deal: the first plate hit the streets of BC on April 6th, in 2007.
In partnering with ICBC, VANOC needed $15 million in true value to do the deal. Even though ICBC was a crown corporation, it would be unfair to the rest of the Tier II sponsors to do a deal for anything less. The $15 million could be in cash or a value-in-kind that alleviated a budgeted expense. In this category we happened to have a large expense line item related to ICBC’s business; namely, underwriting the insurance policies for the 5,000 automobiles General Motors was lending to us. The costs that we would incur if we had to go out and insure those vehicles before, during and shortly after the Olympics, was $6.2 million. Of course we wanted ICBC to cover the insurance coverage costs as part of this sponsorship agreement. I met with the head ICBC actuary a few times as he tried to assess how many claims they could expect from us over the next few years from accidents in our massive fleet, and at what cost to them.
To attain the remaining $8.8 million for a $15 million Tier II sponsorship, ICBC committed to producing a special Olympic-branded license plate and making it available to the public for an additional fee over and above what they would have to pay for their regular plates. The program was on an opt-in basis and totally up to the motoring public to decide if they wanted to buy the plates or not. Each year, ICBC issues just over two million car insurance policies, each one with a front and back license plate, and all of our projected calculations were based on this universe of potential participants. We figured if we hit the ball out of the park we might achieve a 5-percent sales rate and sell 100,000 of our special Olympic license plates.
The auto-insurance company really did its homework on how to structure the pricing for the public plate offering. First of all it looked at every single Olympic Games over the past 50 years and researched what Olympic automobile license plates had been offered to motorists. Here is some trivia: the first known Olympic license plate was issued in Melbourne for the 1956 Summer Games: 200 to 300 plates were produced. Many subsequent Olympic Games applied the Olympic logo to the general issue of plates but it was not until the games in Los Angeles in 1984 that the program was implemented as a fundraiser. In Los Angeles 25,583 special Olympic plates were sold for $100 each, raising over $2.5 million for those games. ICBC unearthed countless other facts and figures on other games and commemorative plate programs that helped us mold our offer.
When it came to raising money off of license plates, there were two revenue variables that ICBC and VANOC had control over and had to agree on. The one-time, up-front incremental special Olympic plate price and the annual renewal fee for the right to continue using it. This is the way the existing personalized plate program in BC worked. In reviewing our options we recognized that a large, up-front fee to enrol in the program would result in fewer people taking part, but that a fee that was too low would leave money on the table. We knew, however that the real money was in the renewals. If we could get enough motorists to buy the plate as soon as it was issued then we could collect renewals every year, for three or four years. “Ca-ching, Ca-ching,” we heard, the sound of a cash register ringing up sales.
ICBC conducted a quantitative research study with 1,000 motorists to ascertain how to maximize our revenues by correctly choosing those two magic numbers. Motorists were shown a mock-up of an Olympic license plate and asked if they would sign up for the program for a $10, $20, $25, $30 or $40 enrolment fee. Then they were asked what annual fee were they would likely pay to leave the plates on their cars. ICBC then went to market with more research and focus group studies to confirm their initial findings. The entire three-month study was presented to me in a one-hour Power Point presentation with the final slide revealing the two magic numbers that they were recommending.
After a lot of number crunching it was decided that the initial up-front fee to purchase the plate would be $35. Then, every year when the motorist who purchased the plate went to renew his or her insurance policy, he or she would be charged an additional $25 to continue displaying the plate for another year. Get those plates out there and collect the renewal money! Simple. The formula to maximize our revenue was pretty clear to anyone who took the time to go through the extensive research. What wasn’t as clear was what design should go onto the plate itself, to make it appealing enough to the motoring public to purchase.
The design element is the fun part of a deal. Both VANOC and ICBC started working on plate design concepts shortly after our discussions began. VANOC had a crackerjack creative department full of about 20, cutting-edge designers, who were mainly in their mid-twenties, had trendy hair cuts, cool tattoos and many pierced body parts, wore mainly black clothing and sat in front of huge Mac monitors all day. The department, called Brand and Creative Services, was on the second floor of our office building and I used to love to go down there just to soak up the great energy. The staff designed everything from our logos to our mascots, our posters and background signage used at the sport venues. They also produced all of our publications and all of the newspaper and TV ads that we ran. The entire branding of the 2010 Olympic Winter Games was developed in-house by this group of talented, young and very hip contemporary artists. We had a very short period of time to develop a look and feel for the games and everything that we produced had to be consistent with our brand positioning.
The group of designers that we used on the ICBC project viewed the 12-inch-by-six-inch metal plate as a canvas that would display something inspiring that communicated our celebration of the games and the uniqueness of British Columbia. We put them to work on dreaming up a concept and gave them only one restriction: the numbers on the plate had to remain highly visible. That was non-negotiable, and came down from the police who had to read them. Our original concept depicted a spectacular snow-capped mountain range in the background with a silhouette of Vancouver’s downtown skyline in the foreground.
In fact, whatever artwork we put onto those plates they would have sold. Dale Bumstead, the ICBC executive who was assigned this special plate program, was a lifer with the corporation and really sank his heart into the assignment. “We have had the most boring and dull, standard blue–and-white plates for decades,” he told me. “There is a real pent-up demand for a colorful and new plate. These things are going to sell like crazy.” He knew his stuff because later on they went on to do just that.
Since the program had such a high profile, the provincial government wanted in on the design too. We got word from the premier’s office that they didn’t like our initial mock-ups of the plate and that they wanted to add the not-very-modest new slogan that they had dreamed up: “British Columbia – The Greatest Place on Earth”. Some of the senior executives at VANOC felt that the line was too boastful and not really our style at Vancouver 2010. Reaching consensus on artwork, or slogans, is always difficult because everyone has his or her own opinion. It became an internal debate at our office, whether we should go along with the slogan or not. We heard that the premier really wanted it on the plates and that it could be a deal breaker to remove it. In the end we settled for a stunning photo of snow capped Mount Garibaldi with our 2010 logo on the middle of the plate and their slogan on the bottom.
So we had a design: problem solved? Not quite. In introducing a new license plate you can’t just come out with a plate for cars. The plate also has to be available for trucks, motorcycles, trailers and any registered vehicle. Every BC insurance agent selling plates at the more than 1,000 locations in BC has to stock all of the different variations. Finally, an optional plate had never been made available in BC, so systems had to be put in place to administrate the program, track revenues and manage restocking.
Within a couple of months of launching the plate program we had sold 50,000 of them. Over subsequent months the numbers just continued to climb way beyond our expectations. Around the three-year countdown to the games Opening Ceremonies ICBC was selling up to 500 plates a day. I specifically remember that date because our three-year countdown was mired in controversy with violent protests breaking out at a ceremony that we staged in downtown Vancouver. The aggressive disruption of our event was heavily covered in the media and quite a downer for us at VANOC. But the day after the ruckus occurred, John Furlong received an e-mail from ICBC President Paul Taylor and it was quite a morale booster at a time when we needed it. It read: “John, sorry to hear about the protests that happened yesterday. I just thought that I would drop you a line to let you know how the average British Columbian feels about the games. As of today we have sold 53,875 plates.” Paul’s point was that the plate program could be used as a barometer to measure the public’s support for the games against the violence perpetrated by comparatively few protestors. In the end we sold 187,000 plates and raised over $10 million making it the most successful plate program in the history of the Olympic Games.
John Furlong once took me aside and told me he could not believe the phenomenal success of the ICBC license plate campaign. “The way I look at it is that after you pay the up-front fee of $35 and renew the plate for two and a half or three years, it will cost you about $100,” He paused, smiled and then said, “It just goes to show the power of the Olympic brand and the support that we have out there, that would make someone pay $100 for a small piece of metal”.
From a personal point of view, one of the things I liked the most about the program was its highly visible nature. I was proud to have worked on it. To me it was like an encouraging wink or pat on the back every time I saw a car with a 2010 plate on it drive by. I started counting them on my way in to work every morning. On one particular commute, when I was driving in to the office and ruminating on a litany of no’s that I had just received from companies that I was courting, I counted 23 Olympic plates. That visual symbol of public support motivated me to get back onto the phone and make some more cold calls
