A Financial Learning Space for the Next Generation of Customers
Designing a new business idea for a top American insurance company
State Farm is one of the leading insurance companies in North America. It offers a broad range of insurance, banking, and investment products and services. Over the past few years, State Farm’s core offerings have faced various challenges, including a decrease in car ownership per household, public policy changes, safer vehicle design, new car-sharing services, and a shifting client base. To address a changing marketplace and build stronger relationships with Millennials (consumers born between 1981 and 2000), State Farm engaged IDEO in a four-year, radically collaborative relationship that resulted in the design and launch of Next Door, a community-focused learning center that offers free, no-pressure financial coaching to consumers in the Chicago area. Next Door opened in Chicago’s Lakeview neighborhood in August 2011.
Since opening, Next Door has registered many thousands of community members, provided thousands of coaching sessions, and hosted regular classes and community events. Next Door has also received praise from local and national media, and high ratings on Yelp. Through Next Door, State Farm has started a mutually beneficial dialogue between their employees and the Next Door community, with benefits ranging from helping and learning about young consumers to supporting local businesses. “At State Farm, we see Next Door as an open-source learning lab,” says Brett Myers, Next Door’s program director. “It’s a new way of being a ‘good neighbor’ for a new generation.”
After interviewing 18- to 35-year-olds, IDEO’s design team soon discovered that many young people viewed traditional banks and insurance companies as “intimidating” and “unwelcoming,” selling products and services that were confusing, expensive, and irrelevant to their contemporary lifestyles.
To help change this perception, the team began designing a community “financial learning space” with no-pressure financial coaching as its core offering. To make the experience more realistic, designers built a full-scale prototype of the concept in a Chicago warehouse. IDEO and State Farm walked dozens of consumers through the prototype, acting out different service scenarios and roles and soliciting feedback. IDEO also interviewed State Farm agents, life coaches, and financial advisers about their goals, challenges, and connections with customers for additional inspiration.
When State Farm decided to take the idea from concept to bricks-and-mortar in 10 short months, IDEO invited the State Farm creative team and outside digital developers and architects to work side-by-side with IDEO designers for a few months in IDEO’s Chicago studio. Together, the team created the Next Door brand (logo, graphics, and more); key storefront and interior designs; digital designs including a website and an iPad Financial Coaching Tool; concepts for classes and community events; and a framework for the new venture’s organizational structure, service roles, and metrics for success.
Every aspect of the Next Door service experience is designed to support meaningful conversations about personal financial goals with Millennials. Next Door beckons curious passersby and makes them feel comfortable by providing a bright, modern interior filled with comfy sofas, free Wi-Fi, whiteboards, and a café stocked with locally-sourced artisanal coffee and snacks. Helpful hosts explain what Next Door has to offer. A wall-sized chalkboard advertises free classes taught by Financial Coaches and local other experts, as well as events like art exhibitions and yoga classes hosted on-site by community members. Professional conference rooms can be reserved for free, and a lending library is filled with books about personal finance.
Next Door’s main attraction is free financial coaching. These experts—part mentors, part life coaches—help customers navigate the financial implications of such goals as starting a family, leasing a car, or buying a house. They offer insight and information in laypeople’s terms, bringing the State Farm heritage of “good neighbor” assistance to a new generation.