Allstate has been making a claim on television for a little while and today they mailed it directly to me.
There was a logic failure in Allstate's premise that jumped right out at me. Do you see it too?
"Nearly 7 out of 10 customers who switched their auto insurance to Allstate paid less. In fact, drivers who switched saved an average of $396 per year!"
Someone who reads this quickly may believe seven out of 10 people will save money by switching to Allstate, but that's not what it's saying. The figure listed only considers the people who did switch, not the entire pool of potential customers.
Here's a possible scenario: Gordon already has car insurance, but thinks about switching to Allstate. He gives Allstate his information and the quote reveals that switching would cost him more money than staying with his current insurance company. Gordon does not switch, and is therefore not calculated in the advertisement.
Jack, on the other hand, has a different driving record and lifestyle and is given a quote from Allstate that will save him money. He gets counted in the "Nearly" seven out of 10. Because he'll save money, it's reasonable to see why he switched.
Unfortunately, this figure doesn't tell us how much of the population is like Jack and how much is like Gordon. It doesn't even tell us if the people who switched opted for less coverage.
When you strip away the clever wording, the only thing Allstate has told us that it is indeed possible to save money by switching to their service, but winning customers with that lead is a hard sell.
Monday, December 14, 2009
Can you spot the fallacy?
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The real question is: why did the nearly 4 out of 10 people switch to Allstate if doing so meant they paid MORE???
ReplyDeleteYou're right, just absurdly illogical, but very deceptive.
Perhaps they got more coverage overall than the old company offered.
ReplyDeleteThat question only comes up when you see the figure for what it really says - if you made the false assumption they wanted you to, it sounded normal.
Yes, however, it is then up to us as consumers not to be mindless sheep and actually read what they are saying and respond accordingly. I say congrats to Allstate as what they said is most likely 100% truthful and if someone is foolish enough to read it the wrong way, then so much for them.
ReplyDeleteIt is up to the consumer to be careful, but there's nothing wrong with giving them little hints along the way. It's not like I said the FTC should thwart these stupid ads.
ReplyDeleteThis is done in almost every commercial in different ways. When 4 out of 5 dentists reccomend Happy Teeth Fuck toothpaste, they mean the dentists that were asked to choose between Happy Teeth Fuck toothpaste and Tobacco Yellow Shine toothpaste. When they say that a car has more cargo space, they mean "more cargo space when you push down all the seats and don't let anyone in". When a car costs 10 grand, they mean it costs ten grand if you don't get a radio, a gas tank cover, automatic transmission, windshield wipers, or seats.
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