Client Centricity
Momentum Sales
Lee-Ann du Toit
Agenda
1) Introduction
2) What is client-centric?
3) Developing a deep understanding of your clients
4) Why become client-centric?
5) The role of technology
6) The shift in our landscape
7) Moving to action
Without our clients we don’t have a business
•
“The purpose of a business is to make and keep a client.”
1909 - 2005
Our future gameboard
Deliver Value: Innovation
Passive
clients
Disruption
Commoditisation
Engaged
(active)
clients
Agenda
1) Introduction
2) What is client-centric?
3) Developing a deep understanding of your clients
4) Why become client-centric?
5) The role of technology
6) The shift in our landscape
7) Moving to action
What is client centricity?
•
A real, sincere and deep understanding of your target clients’
true needs
•
•
Identifying which needs can be profitably met
•
Eg
Mobilizing your business to supply solutions to these identified
needs, and then dynamically adjusting our solutions as our
clients and the market dictates
What is client centricity?
A client-centric business knows these five 5 key principles:
1. The client is the primary source of income
2. Different clients should be treated differently
3. Not all clients are profitable and some are more profitable
than others
4. With focused attention, you can increase your practice’s
profitability by increasing the profitability of your clients
5. Your business is essentially a portfolio of clients more
than a portfolio of products
What is client centricity?
1. The client is the primary source of income
• The client is the primary source of income for your business
• This realisation shifts the focus to the real source of income
• This impacts your entire strategy and approach
• Client centricity is first and foremost a strategic issue
• Knowing that the client is the real source of income, then
one’s focus on the client becomes more intense:
• How can one more effectively generate income through
the client?
What is client centricity?
1. The client is the primary source of income /cont.
• Client centricity is a business strategy
• The client takes centre stage in all business decisions
• It is a profit-growth strategy; not a “make-the- client•
•
happy-at-any-cost” strategy
Client centricity involves the whole business:
• leadership, processes, the decision-making, the culture,
the systems, the structure, the way people are
rewarded and promoted
Client centricity is not the same as client focus
What is client centricity?
2. Different clients should be treated differently
• It is not unfair to treat different people differently
• The opposite is more likely to be true
• Clients have different needs which not only require
•
different products but different solutions and different
modes of interaction
Different clients have differing levels of profitability
potential or influence
• Know your clients well enough to treat them
appropriately i.e. both differently and profitably
What is client centricity?
3. Not all clients are profitable. Some are more profitable than
others
•
•
•
•
Successful business is based on mutual value exchange
• The client receives value and pays according to that
value so the business receives value in exchange
Clients know whether they are receiving fair value
Do you know the profitability level of each of your clients /
client segments?
Use that information to make profitable
business decisions
What is client centricity?
4. With focused attention, you can increase your profitability
by increasing the profitability of your clients
•
•
•
Investing in systems, processes, people and research to
know the client better
Enabling decisions and execution of deliverables for
clients with express intention to increase the value for
both the client and your practice
Structuring around client segments, so that one person is
in charge of the profitability level of a particular
client or client segment
What is client centricity?
5. Your business is essentially a portfolio of clients rather than a
portfolio of products
•
•
•
•
The focus of measurement is now around the client
Previously, profitability comparisons were done on product
level (eg product A makes more money that B or C)
Rather compare the profitability of client segment A vs B vs C
Enables appropriate decisions towards specific actions to
increase the profitability of client segment A or B or C
What is client centricity?
5. Your business is essentially a portfolio of clients rather than a
portfolio of products
•Invests resources to find more products or solutions for your
clients
• Given your rich understanding of your clients’ needs
•You have a portfolio of clients to look after for life
•A business that only sees itself as a portfolio of products
invests resources into finding more clients for their
products
•It is more cost effective to sell to an existing client
than to find a new one
How is client centricity different?
Client centricity is different to client focus
Many businesses focus on their clients:
• Conducting client satisfaction and/or loyalty research
• Emphasising excellent service
• Offering flexible, customisable products
• Tailoring their client communications
• Designing positive client experiences
How is client centricity different?
Client centricity is different to client focus
A client centric business will do these, and more:
•
Research will not be limited to satisfaction or loyalty, but will
include research into client needs, problems and unsolicited
feedback
•
It will know the value of each of their clients and segments
their clients according to their needs so that they can better
meet those needs
•
Excellent service will be given and great client
experiences will be created, but certain offerings
will only be available to clients within a
particular segment or value level
How is client centricity different?
Client centricity is different to client focus
A client centric business will do these, and more:
•
Value-add services are offered with the specific intent to
increase the value of particular client segments
• Products remain extremely important, but are now
designed in response to identified needs of specific client
segments
• Client feedback (including complaints) is
treated like gold, captured on systems,
tracked per client, and acted upon
Agenda
1) Introduction
2) What is client-centric?
3) Developing a deep understanding of your clients
4) Why become client-centric?
5) The role of technology
6) The shift in our landscape
7) Moving to action
Our past approach to pricing and benefit design
•
Products were designed within focused product
development units in insurance companies
•
Once the product was developed, and priced appropriately
given risk profile etc, it was rolled out to consumers
• “Insurance is sold not bought”
Grudge purchase
Traditionally used a
financial advisor
Products pushed to
clients
Consumer expectations
• Consumers are becoming more demanding
• Understanding the role of trigger events is essential for
success
• Sources of financial advice are changing (social media)
• Simplicity, safety and quality (transparancy is key)
• The financial advisor is still king
• For clients, the new normal will be about “buy what you
understand and understand what you buy”
So what are consumers looking for?
Consistent theme in both upper and lower LSMs
Momentum Brand Health Study 2011
Client centric product design is essential for
bottom line
Customer centric product design
Revenue growth
Cost control
Increased customer
engagement and
satisfaction
Reduce product design
costs through lower
failure rates
Source: Datamonitor 2010
“Businesses that
successfully combine
value-creating
customization with cost
effective delivery
outperformed industry
peers two to one in
revenue growth and
generated profit margins
5% to 10% above their
competitors”
Booz Allen Hamilton
Consumer insight must drive product
development
Value proposition & benefits of products
Consumer insight
Identify the need
A customer centric organisation
must utilise an array of market
intelligence to firmly grasp what
issues are driving consumers’
and clients’
choices and attitudes.
Source: Datamonitor 2010
Practical ideation
Develop the product
A customer centric organisation
must let its product innovation
be driven by revealed
consumer needs
Example of successful customer centric product
design: Savings
• Smartypig rewards consumers for reaching their savings goals
• Clients can set themselves specific goals and then track their
progress
•
Contributions are made automatically with the consumer
choosing the frequency; however, additional contributions can
be made at any time
•
Rewards are critical to the SmartyPig offering
SmartyPig rewards savers with more than just
interest
High
• SmartyPig offers consumers a means
to organise their savings ambitions
Customer
centricity
• The rewards it offers are relevant
and significant
• Tangible rewards like cashback are
particularly appealing to consumers
Low
High
Underlying demand
• Extra rewards for saving are even
more appealing while interest rates
remain depressed
• Soon many more aspects of
financial services will be linked to
accompanying incentive and
rewards schemes
Low
Agenda
1) Introduction
2) What is client-centric?
3) Developing a deep understanding of your clients
4) Why become client-centric?
5) The role of technology
6) The shift in our landscape
7) Moving to action
Why become client centric?
A true story – meet John*
Why become client centric?
A true story /cont
Why become client centric?
A true story /cont
Why become client centric?
Now, imagine if the private banker…
Why become client centric?
•
Make sure the bank innovated to keep clients like John
happy
Why become client centric?
There is a bank like this – the Royal Bank
of Canada
• Don’t you wish there was a bank like
this in South Africa?
• How would your clients and your
business benefit from this approach?
Why become client centric?
Client centricity pays
• RBC converted their large Personal and
Commercial division into a client centric
division
• It reduced expenses by $1-billion
• They are ahead of schedule towards
increasing revenues by $1-billion
• If the P&C division was measured on
its own, its stock performance
would far exceed
the market
Why become client centric?
Bottom line:
• Become client centric because…
• … for those in a commoditised B2C environment, it is a
more profitable business strategy
Agenda
1) Introduction
2) What is client-centric?
3) Developing a deep understanding of your clients
4) Why become client-centric?
5) The role of technology
6) The shift in our landscape
7) Moving to action
“We are in the midst of one of the
most disruptive and informative
transformations in business
history”
Financial Services Keynote opening,
Salesforce conference, San Francisco USA
September 2011
Access to financial services
100%
4.3%
% of consumers with life insurance
90%
11.5%
80%
7.2%
16.2%
70%
60%
50%
40%
71.6%
53.0%
30%
20%
4.6%
10%
11.1%
14.6%
0%
South Africa
Global average
Online directly from the company
Through my bank
Online through a price comparison site
Other
Through an tied agent / IFA
Don't know
A shift in distribution towards consumer friendly
channels
• Consumers want to access financial products via simple
and convenient channels
• Consumers prefer channels that offer comfort and safety
• Traditional channels vs. technology advanced channels
Sales – the future financial advisor
• Convergence on the mass affluent- everybody is going after
the same customer
• Everybody thinks they are a financial expert
• Shifts from "households" to "living arrangements"
• Clients more comfortable with technology - advisors also
needs to be
• Evolution of how we:
• Gather prospects and customer data
• Engage & collaborate with customers
Sales – the future financial advisor
• How have all the consumer shifts affected our industry?
• “The customer experience is something you create with
the customer, not do to the customer”
• Advisors that find a way to integrate customer experience and
social platform will be sustainable into the future
• Invite clients to be part of the process to create the right
solutions: Put client in co-pilot seat, make him part of the
process of decision making around their financial needs
The Social Revolution
“How to delight your customers in a whole
new way”
Delighting customers is knowing who they
are, what they need
and
)
The Social Revolution – Financial Services
• Customers trust their networks and communities more than
advertising (imagine a “tripadvisor" for financial advisors...)
Opportunities for social media in insurance
64 %
who pick an insurer based on friends’ advice are satisfied with
their choice
59 %
using social media do so in
order to get the opinions of
others who have already
gone through the purchase
process
Source: Boston Consulting Group study of “new Media” relating to insurance Industry
Opportunities for social media in insurance
14 %
25 %
are connected to their
financial advisors via
Facebook, Twitter, or
LinkedIn
are connected to their financial
advisors on two or more social
networks
Source: Boston Consulting Group study of “new Media” relating to insurance Industry
Agenda
1) Introduction
2) What is client-centric?
3) Developing a deep understanding of your clients
4) Why become client-centric?
5) The role of technology
6) The shift in our landscape
7) Moving to action
The future role of advice
Changes in consumer needs and legislation will result in:
• Consumers demand greater choice of advice channel and may
even use multiple advisors / channels
•
More focus on longer term relationship with client, and
holistic needs provision
• Partnerships and collaboration between different advisors
• Less number of independent advisors
• Quality of those remaining likely to improve
Client incorporates the landscape changes
Product focus
Client need / solution
Business unit Silos
Collaborated, crossfunctional units
Standardised solutions
Customised, individualised
Single advice channel
Multiple advice channels
(partnerships)
Single need view
Multiple need of client
(single view)
Agenda
1) Introduction
2) What is client-centric?
3) Developing a deep understanding of your clients
4) Why become client-centric?
5) The role of technology
6) The shift in our landscape
7) Moving to action
How do we become client centric?
With determination. It is not easy.
Nelson Mandela: “After climbing a great hill, one only finds
that there are many more hills to climb.”
How do we become client centric?
Step 1
• Understand that client centricity is a business strategy
• It is a business strategy rooted in a business philosophy
that says:
“If you look after the client’s interests, your business
interests will be advanced”
•
Clients are our only source of revenue
How do we become client centric?
Step 2
• The mindset at the core of this strategy is one that
recognises that the client, not your financial practice, is the
centre and the starting point
How do we become client centric?
Step 3 – Study your clients
• Focus on your client data – clean it, analyse it, and see
where the gaps are
•
Group clients based on their needs and values and relevant
drivers of those needs and values (segmentation)
•
Conduct research to understand their lifestyles relative to
your offering and competencies
• Identify what matters most to your clients
• Immerse yourself in your clients’ worlds
How do we become client centric?
Step 4 – Calculate your client’s profitability
• Allocate revenue to each client
• Define various costs associated to transactions and ongoing
relationships
• Calculate current profitability of each client
• Calculate potential profitability of each client
• Set out profit targets per segment and overall
• Technology can assist greatly here
How do we become client centric?
Step 5 – Organise your business around your client
•
Inspire and educate your people on client centricity and
across product knowledge
• Enhance systems and create single view of the client
• Redesign incentive measures and profit reports
• Assign managers to be responsible for client segments
• Hold managers accountable for segment profit increases
• Design, communicate and execute tailored
client value propositions
What does this mean going forward?
Momentum Sales is also on this journey
• We are partners in this journey and will work with you
• If we are both client-centric, we will be able to achieve the
outcomes the clients really need
• Give us feedback - tell us how we can assist
• Tell us where we are falling short
• There are going to be changes and kinks in the road,
but together, we can be successful
What next?
• Transform current client-mindset to profitable client-centric
financial practice over time
•
You will unlock more value and profits over time
• Open and honest feedback to Momentum Sales
• Identify long-term value of clients
• Where are the big concerns?
• Where are the opportunities?
• Discussion forum: m-panel
•
Share similar challenges
Where to start – implementing in practice
• Decide on an action plan
• Set specific measures and targets in place – monitor
• Competition?
•
•
•
•
•
Most goals achieved on action plan
Most profitable client base
Highest practice revenue increase
Best practice of the year
Other?
Closing thought
• To be client-centric, you will focus on a lifetime financial partnership
& relationship with your client
• … instead of short-term non-sustainable product push approach in the
past
• Holistic view
Thank you
Lee-Ann du Toit