This paper argues that, in spite of consistent levels of promotional support for UK insurance companies since they first began advertising on television in the mid-1970s, no strong insurance company brands have yet been established in the UK in 20 years. It recognises that there have been many FALSE starts, and looks at the influences from inside and outside the companies which have aided and abetted this failure in branding. It considers the attitudes of company managers towards branding, and examines why the distribution system for insurance products has not seemed to need, or be able to use, strong brands. It examines how the recent changes in regulation and legislation have now made branding of insurance a much more important issue, and lays out some suggested courses of action to remedy this lack of brand building.
This paper describes how Lloyds Bank tackled the issue of customer retention. The Bank used research to investigate the extent of defection due to dissatisfaction with the Bank and to explore the process leading from satisfaction to account closure. As a result of the research fundamental assumptions in the Bank about the reasons for defection and the best way of handling them were challenged, leading to the design and implementation of a new Customer Retention process.
On the French Financial market, in the late 80's, the "SICAV monetaires" (Funds invested in monetary markets) experienced a very specific situation : they bore a high interest rate although they were at the same time almost liquid and very secure. They appeared as the perfect product, so, no surprise, they experienced a strong development and represented, in 1993 a market of 140 billions ECUS. In the context of diminishing short term interest rates and government incentives towards long term investments, it appeared important to be able to answer the following questions : - How to estimate owners' reactions in case of reduced profitability ? What are they going to do with their SICAV monetaires ? - What alternative products will meet their requirements ? - How will they arbitrate between their difierent expectations ? The paper is aimed at presenting the kind of research approach that was used to answer those questions. It is based on a Trade-off approach, which allowed to identify the relative "utility" for the individuals of the main criteria involved in the financial product ownership. It has then been possible to simulate changes in expected behaviour induces by changes in the offer. Main results of the research are presented. They will illustrate the type of customer segmentation that can be built of the method and show how to define the product characteristics to be proposed to meet the needs of each identified segment.
The data presented in this study, which has been derived from various CATI-Bus-Surveys made with respect to the population in West Germany, and from a Disk-by-Mail-Survey made with respect to insurance brokers, outlines the expectations and opinions expressed by German insurance customers and insurance brokers towards the European internal market for insurances. The majority of German insurance customers is pleased about the fact that due to this trend "their" insurance companies are faced with a stronger competition. At the same time the majority is relatively loyal towards "their" German insurance companies and has little confidence in foreign insurance companies. The insurance brokers are very confident and optimistic about the liberalization of the German insurance market. They believe that this trend will substantially increase their importance as "the person who guides potential clients through the labyrinth of insurance offers". As regards the insurance customers the broker enjoys a slightly better reputation than the company's agent, however, he is far from being accepted in his function as the so-called guide. Acceptance alone is doomed to failure due to the fact that the majority of the insurance customers does not really know the difference between a company's agent and a broker.
This paper presents some of the key findings from a qualitative research project conducted by NOP Corporate and Financial on behalf of Lombard Business Finance. The overall objective of the research presented in this paper was to determine the viability of a direct distribution channel in an important segment of the business market, defined from an earlier segmentation study. In other words to establish whether this market segment (made up mainly of smaller businesses) would accept a telephone- based service rather than the traditional salesforce as the main channel of distribution. The research found the concept to be a highly relevant one offering benefits to both customers and supplier alike. However, it also established that the credibility of the supplier and the building of a relationship were absolutely vital. The exact nature of that relationship was explored in some depth and one of the most interesting conclusions from the research is that small business self-perception has changed significantly as a result of the recession. These businesses see themselves as survivors, heroes even, who expect a partnership of equals not the sort of parent: child relationship so often found in the financial services sector. The need for equality in the relationship is exacerbated by the perceived performance and behaviour of some of the banks. The extravagant lending policies of the 1980s and the subsequent need by some banks to reduce their exposure, via the apparently impulsive recall of small business overdrafts and loans, has impaired or even destroyed, many customer relationships. And by so doing, has created a vacuum in the market into which the Lombard product concept can be directed. The research showed that it was important for Lombard to promote both sensible lending and the desire for a genuine relationship. And via the use of projective techniques (which were shown to be very valid in a business context) established the basis of the service proposition. This needed to be built around not only access and speed, (which predominate in the retail sector) but also the reliability and warmth typified by the British milkman.
Due to the increased perception of risk, the population is more strongly oriented towards insurance protection. In both East and West Germany, more than half of the population advocates having the most comprehensive insurance coverage possible for their families. The risks against which the population feels it is most important to be protected-and against which the East German population has felt a markedly increasing desire for insurance protection in the past three years-are: car theft, damage to one's automobile, liability claims, water damage and involvement in court cases. Parallel to the population's increased awareness of the need for protection, the level of insurance coverage has risen in both East and West Germany in the past three years, although coverage is still deficient in some areas since the population now has higher standards. There are still considerable differences in some areas when it comes to the East and West Germans' ideas of what qualities a good insurance company should have. East German consumers attach far greater importance to receiving competent advice, while West Germans, for example, place more emphasis on premium refunds and quick and satisfactory claims settlement. Although the majority of respondents say that price is not the deciding factor in choosing an insurance company, there is a tendency to change companies in order to take advantage of more favorable offers. The need for information is still far greater in East Germany than in the West, although the East German level is beginning to approach that of the West German population. This applies particularly to information about the various insurance options and the conditions on which insurance companies will pay. Corresponding to the need for information is the population's lack of knowledge about insurance. There are no signs, however, of any attempts on the part of the population to close up this information gap-on the contrary, it even appears to be widening.
This paper focuses on customer relationships in retail banking. Understanding customer relationships and especially the profitability of them requires the development of new concepts and tools. The paper discusses some concepts and tools available to support profitability analysis on a customer base level and on a relationship level. A tool in this context is the relationship configuration matrix, which enables us to investigate distinct relationships and segments of the customer base and develop products and pricing mechanisms in order to fully utilize the business potential of the particular customer or segment. The tools are illustrated by a case. Swedbank, the largest bank in Scandinavia, has carried out a comprehensive customer base analysis in which MIS data about 97.000 customers and market research data about 3226 customers was used. The aim was to calculate customer relationship profitability and develop strategies for ensuring the loyalty of profitable customers and enhancing profitability of the large number of unprofitable customers. Profitability was found to be a function of customers' interaction behavior and thus a pricing strategy was launched. The successful strategy was the first comprehensive and congruent pricing strategy in the Swedish market and has created a fair amount of debate.
The purpose of this paper is to be provocative, whilst at the same time taking a serious look at some of the issues which can lead to market research being deemed a waste of time. As market researchers, we are unlikely to be of the opinion that the craft we follow is pointless and makes no contribution to the future prosperity and well-being of the financial services industry, but this need not prevent us from examining some of the difficulties we face in establishing the credibility and usefulness of market research. The concerns I address in this paper are: the raised expectations of research users' the problems associated with forecasting future events accurately the role of the researcher - number cruncher or strategic guru? our dependence upon respondents and their reluctance to become engaged in the research process the appropriateness of certain techniques and research methods the development of a partnership between clients and agencies the importance of reporting the results. This paper is a mixture of my own views and those of buyers of financial market research in the UK. Their opinions were collected in two mini-group discussions which addressed the question "Is market research a waste of time" and some of their comments are quoted verbatim. The paper concludes that market research is in the greatest danger of being considered pointless where the expectations of research users are too high and the strategic input of researchers is too low.
NVA is a Dutch association of qualified insurance brokers. The common characteristic of the 950 members is that they are independent; not tied up to one insurance-company. It is important, with regard to the competition of direct writers and banks, to maintain high standards of expertise and service. That is why NVA , in cooperation with Lagendijk Onderzoek, developed a method for measuring the qualities of the member-brokers. Every NVA member can make use of the method. It consists of sending questionnaires to 700 clients per broker. The clients then fill out the forms and send them to Lagendijk Onderzoek where the data-processing and preparation of the reports take place. The interesting pari is that in practically the same period, a rather large number of brokers is participating. This has for result that, next to the individual reports, a collective report can be prepared. The outcomes of the whole group of brokers function as a benchmark for the individual broker. The findings indicate, generally spoken, that the clients of the NVA brokers have confidence in competence, responsiveness and speed of action of their broker. Irritation can be caused by administrative errors, lack of clarity, slow reactions and uninvolved personnel. Contributing to satisfaction are extras as personal attention, initiative and creativity. !( cannot be denied that costs play an important part. The individual brokers all have their own profiles. The method enables the researcher to indicate clearly their strengths and weaknesses. Growth prospects arc a vital element in the way of reporting.
The underlying thesis of this presentation is that effective and market-relevant image-building strategies can only be developed based on a precise understanding of consumer reality. An image cannot be determined and established arbitrarily; it must successfully win recognition within a dynamic consumer context and within a constantly developing market. In doing so, strategic advantages can be achieved through the help of morphological market psychology since this examines the turbulent interplay of forces in consumer reality, lending transparency to the developmental context and generally applicable principles to which both the market and the image are subject.
Financial institutions have been forced to adapt from sales driven organisations to a customer focused operating culture in order to survive - although the process of adaptation is far from complete, and has not been painless. The problem is that determining what the customer wants is more difficult in financial services than in other industries, because the products are often complex and long term. Customers may have clearly defined expectations of a branch based retail banking service, but they find it difficult if not impossible to define the standards of service they expect when they buy a life policy or personal pension plan - because they do not understand the products they are buying. Yet customer retention is vitally important to the life and pensions industry, since cancelled policies signal lost profits. The aim of customer service therefore is to build and maintain confidence in the institution and thus ensure retention for the long term. It is unnecessary for customers to define the standards of service they expect, the only relevant consideration is whether commumcations between institution and customer have the effect of increasing or decreasing confidence, and hence prospects for customer retention. A survey for TSB Life and Pensions used multivariate analysis to infer the relationship between customer service and confidence, distinguishing those service attributes that are critical to maintaining customer confidence from those that appear to have little or no influence. Once confidence is accepted as the long term goal of customer service, a strategic framework can be established to review each service attribute against its contribution to the key confidence index.
All banks attempt to convince the public of their specificity and the specificity of the products and services that they offer. The efforts to do so are often in vain because, with the exception of a few well informed clients, banking clients tend to be lifetime clients of the banking establishment which is closest to their home or employment. In this report, we will describe the SORGEM's prescribed method for rendering banks and their products distinct from others.