Brian O’Neill reflects on pulling through the banking crisis and how the advent of online has revolutionised customer communication.
Our business is life and income protection, pensions and investments. What distinguishes these products from both consumer goods and other types of financial services is that consumers rarely proactively purchase these products despite their clear need for them.
They may be provided to employees by employers especially in larger companies or mortgage borrowers are compelled by lenders to purchase life cover when taking out a loan. Alternatively, a significant proportion purchase these products after being introduced to or contacted by a financial broker.
So from a marketing perspective our products are push orientated rather than pull orientated and therefore our marketing to consumers focuses on highlighting the need for our products and awareness of them. However, as a company that does not sell direct to the public but markets our products solely through financial brokers, much of our marketing focus is B2B, marketing our products to brokers to ensure they will be aware of them when advising their clients and making recommendations.
A UNIQUE OFFERING
We are one of the oldest life assurance companies in the market having been in operation continuously in Ireland since 1834. We are a fully domesticated Irish life assurance company, owned by the mutual insurance group Achmea, who are the largest insurance group in the Netherlands.
Based on our mutual and cooperative roots, we remain focused on being a sustainable customer focused insurance group, which is servicing our customers financial planning needs over their life time.
Our market share is now 6% and we are determined to grow this to 10% over the next 3 years. Our relative small size allows us to focus on our customers and to be nimble in making changes and improvements to our products and services. We are the market leader in income protection and our challenge here is convince more Irish consumers to consider this important form of cover.
DEVELOPMENT THROUGH CRISIS
Customers trust in all financial services providers declined significantly as a results of the difficulties encountered during the banking crisis. While life assurance companies did not experience the same severe level of difficulties as banks during this period, many of our customers experienced significant declines in the value of their funds at a time when their overall financial circumstances deteriorated.
As a result, we suffered both a significant decline in new sales of our products as well as many of our existing customers being unable to maintain their products and savings with us during a time when they were suffering financial hardship.
Our response was to focus on retaining existing customers through improved communications services and reduced charges. We also reduced the cost of covers across most of our products for new customers and reduced commission levels payable to our financial brokers/advisers, which was not welcomed but required.
We then offered increased support for brokers through training and supports so they could up-skill to move from a focus on product sales to added value financial advice and services over the long term. This helped restore the confidence of both customers and financial brokers/advisers in the long term sustainability of Friends First.
Life assurance companies do not manufacture tangible products and so our industry lends itself it to the use of digital processing and communication.
Consumers rarely proactively purchase these products despite their clear need for them
Our modes of customer communication have already significantly moved from paper to digital with both our distribution channel as well as our end consumers.
All of these groups expect to be able to engage with us and our products through multiple digital channels and devices 24 hours a day.
Our marketing mix has also moved from traditional press and off line media to digital promotion. We still use traditional media such and TV and radio but this is now supplemented and supported by digital media and channels which provide an integrated mix and instant feedback on the effectiveness of our campaigns.
Digital media and channels also provide us with a rich, dynamic and effective way of communicating what can be complex products to our customers. For example, video and calculators tools are very appealing ways for customers to learn about the need for our products and the product themselves.
They also lend themselves to increasing users on line, as if your content is not short, clear and appealing it will not be accessed. Like so many other financial services providers, Friends First have embarked on the process of digitalising our value chain and communication processes.
As a heavily regulated industry this is not without significant challenges as there are necessary warnings required with much of our promotional content.
In my experience with the advent of digital, marketing has become more appreciated in our industry than historically. The old adage that ‘50% of my marketing works but I don’t know which 50%’ no longer applies and is not tolerated.
Digital media and channels provide us with a rich, dynamic and effective way of communicating
Interacting with customers and financial brokers/advisers through digital channels ensures we receive quick and detailed feedback on how they engage with and react to content sent or made available to them.
This provides us with invaluable insights into what works and what does not and enables us to both make changes quickly and to test different forms of content in a cost effective way. This was not always possible with more traditional hard copy collateral.
As Friends First is a B2B business, marketing is not integrated into the sales process to the same degree online as the sale of consumer goods or some other forms of financial services products. But the importance of marketing in a digitally focused B2B business such as ours has definitely increased and is continuing to do so.
The advent of online is the biggest development in marketing in my 30 year career in life assurance. It has fundamentally changed the pace, the variety and the measurability of marketing activity. The demand from customers and financial broker/advisers for always-on communication has placed huge demands on us in developing effective and relevant content and campaigns.
The increase in the pace of change is a challenge for us but the availability of performance analytics ensures we know what is working very quickly. This has created the need for agile and highly responsive marketing. It has also broadened the type of skill needed in marketing especially in the areas of data management and analytics.