It makes sense therefore for a business to focus its attention on developing customer satisfaction and loyalty and there is overwhelming evidence to suggest that a differentiated customer experience builds brand, market share and competitive advantage. So how can we go about this in the international life industry?
Friends Provident International is a company committed to independent financial advice but we still need to decide on our target customers and recognise that international life insurance isn’t everyone’s panacea. Once we have decided upon whom we are targeting, we should fully understand them and that requires an investment in research. We need insight to understand the customer’s goals, hopes and fears and to understand their attitudes and behaviours. Then can we build an offering that truly meets the needs of the customer. That offering includes products, customer experience and our marketing, amongst others.
We could all learn a lot from other industries and companies. Take Apple or Disney, for example, two of the world’s biggest and most valuable brands. Apple’s brand is worth a staggering USD 145 billion according to Forbes, 2015. They achieved that status for good reason: they invest millions of dollars in understanding their customers and the experience that they deliver is therefore highly relevant and rewarding. Virgin Atlantic also developed a compelling proposition by listening to customers – it’s an airline that built a loyal following by challenging conventions and making life easier and more fun for the customer. The reason for Virgin’s success stems from an inherent ethos to seek out complacent industries and to deliver improved outcomes, acting as the people’s champion.
Fundamentally, customers invest in international life insurance products to protect their families and to make money to achieve their financial goals. Companies and advisers that look after customers’ interests and help them meet their goals should stand to benefit most in the long run. There are a number of factors in play in our industry that may naturally encourage this focus on customers in future.
New regulation in Hong Kong and Singapore that confronts the way in which companies and advisers operate is arguably beneficial for the industry. The banning of indemnity in Hong Kong is good for the customer and fundamentally good for the insurer and the adviser in that it is helping them to build long-term value in their businesses. This regulation could bring about genuine change, forcing insurers to innovate and advisers to reposition themselves to meet the long-term nature of customer needs.
For example, international insurers could build products without inbuilt commissions, allowing the adviser to add remuneration amounts, within limits, that help customers meet their goals, perhaps on a recurrent basis, to foster a longer-term client-adviser relationship. This could also allow advisers to charge fees instead. Commissions don’t have to be built-in. New entrants such as platforms are recognising this and are beginning to secure a small but growing breed of advisers – the landscape is changing.
And in those markets where regulation isn’t forcing change, other factors are at work. The availability of information is driving change. Never has the customer been better informed about their options. Never have they been more able to express their dissatisfaction. The internet and social media is empowering the customer. The cult of the customer has arrived and it’s shaping a brave new world.
Every part of the value chain needs to deliver meaningful value and all our interests – insurer, customer, fund manager and adviser- need to be aligned if we want this to work and if we want our industry to thrive.
This is the first in a series of articles on customers and my next article will consider some of the insight we have gleaned and what it means for advisers and Friends Provident International and the wider Aviva Group.
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