Winning the struggle for growth through enhanced customer relationships
A recent study conducted by Deloitte Research suggests that financial institutions should rethink their growth strategies, eschewing product innovation in favour or process and service improvements. The latter are much harder for competitors to replicate, thus providing a more enduring advantage, both in terms of better customer service and revenue growth. Process and service innovations also tend to reduce complexity and cost, creating a ‘virtuous circle’ of top-line growth and bottom line profitability by making it increasingly easier to attract and retain customers.
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Attract
How do I attract the right new customers?
The key to growing market presence. It is important to understand the type of customer you are aiming for and to ensure your proposition is targeted to this group. Key levers here are:
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First - define and understand your target market(s)
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Secondly - develop propositions that are compelling for consumers and distributors
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Service/ product/ pricing innovation
Grow
How do we sell more to our existing customers?
For many life and general companies the challenge is not about customer numbers, the real uplift will come from increasing product holdings per customer. Key levers here are:
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Ability to understand your relationship with your current customers
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Product range and competitiveness
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Ability to bundle/ offer loyalty discounts/ differential pricing
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Intermediary attractiveness (commissions/ products/ service)
Retain
How do we keep our most profitable customers?
Attrition is a major problem for insurance companies, and improvements in this area can be much easier and less expensive to realise than attracting new customers. You need to understand your profitable customer segments and then develop retention propositions accordingly. Key levers for retentions include:
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Intermediary and customer profiling
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Service innovation/ effectiveness
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Differential pricing
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Managing the attrition trigger points
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Timely and appropriate communication
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