December 12, 2011

From Crain’s Cleveland
By Timothy Magaw

When asked how large his sales staff is, Medical Mutual of Ohio CEO Rick Chiricosta without hesitation says 2,600 — the size of the Cleveland-based insurer’s entire workforce.

And in hopes his army of employees around the country will continue to spread Medical Mutual’s good name, Mr. Chiricosta has encouraged his employees to shop as much as possible from the insurer’s clients.

If the “Mutual Appreciation” initiative goes as planned, Mr. Chiricosta expects it will boost customer loyalty and perhaps stir a little activity in the local economy.

Consider it an “I’ll scratch your back, if you scratch mine” sort of arrangement.

“It’s real simple,” said Mr. Chiricosta, who hatched the idea. “The one thing we bring to the table that our competition doesn’t is that we have 2,000 people who live (in Northeast Ohio). From a conceptual standpoint, we’re saying ‘Let’s reward the people who are choosing us.’”

Late last month, Medical Mutual rolled out an interactive database on its companywide intranet that allows employees to search the insurer’s client list based on geography and service type. Employees are asked to keep receipts and log purchases from those clients in order to win prizes.

Medical Mutual employees as of late last week had logged $688,699 in purchases from the company’s clients.

Clients, not surprisingly, approve.

“I think that’s fantastic their CEO would come out to their employees and encourage them to do business with the partners,” said Chris Marhofer, operations manager at the Ron Marhofer Auto Family, one of the insurer’s clients. “If you can create relationships like that, it helps us all out. It creates a better business environment for both parties.”

Mr. Chiricosta said the initiative also presents his company with a distinct marketing advantage. For one, he has instructed his employees to remind the companies with which they’re doing business that they’re patrons largely because of their connection with Medical Mutual.

“It’s a great concept, and executing it and keeping momentum is going to be the challenge, but I think it can make a big difference from a sales standpoint,” he said. “It could really play well when you’re sitting down with a significant customer.”

Northeast Ohio business leaders said they were unaware of other companies with programs such as Medical Mutual’s. However, they noted there’s a recent influx of “buy local” campaigns by trade organizations and other nonprofit groups geared at spurring growth in the regional economy.

The Council of Smaller Enterprises, for instance, runs a website armed with a searchable database of local business. Also, Cleveland Independents, a local nonprofit, run a directory of independently owned restaurants in the area.

Rosanna Miguel, an assistant professor of management at John Carroll University’s Boler School of Business, said she see such programs as “more of a reaction to the fears people have about the economy, and the fact that it’s something we feel we don’t have control over.

“We can’t do a whole lot to make things better other than support the local community and organizations,” she said.

Joe Roman, president of the Greater Cleveland Partnership chamber of commerce group, said the advantage of “buy local” campaigns is that they foster relationships between consumers and businesses. But, in the end, he said, it’s up to each business to prove its value in the market — not just through a buy local marketing blitz — in order to cement their relationships with consumers.

“If Medical Mutual’s program works and creates new relationships and the relationships are useful for both parties, that would be a win for everybody,” Mr. Roman said.