Client Centricity Momentum Sales Lee-Ann du Toit

Client CentricityMomentum Sales

Lee-Ann du Toit

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

Agenda

1909 - 2005

• “The purpose of a business is to make and keep a client.”

Without our clients we don’t have a business

Our future gameboard

Passive clients

Passive clients

Engaged (active)clients

Engaged (active)clients

Deliver Value: InnovationDeliver Value: Innovation

CommoditisationCommoditisation

Disruption

1) Introduction






7) Moving to action

Agenda

• A real, sincere and deep understanding of your target clients’ true needs

• Identifying which needs can be profitably met

• Mobilizing your business to supply solutions to these identified needs, and then dynamically adjusting our solutions as our clients and the market dictates

• Eg

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


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?


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


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


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


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


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


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


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?


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



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


1) Introduction






7) Moving to action

Agenda

• 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”

Our past approach to pricing and benefit design

Grudge purchaseTraditionally used a

financial advisorProducts pushed to

clients

• 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”

Consumer expectations

Momentum Brand Health Study 2011

Consistent theme in both upper and lower LSMs

So what are consumers looking for?

(3)

Return on investment

(2)

Price of products

(1)

Trustedbrand

Client centric product design is essential for bottom line

Customer centric product design “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

“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

Revenue growth

Increased customer engagement and

satisfaction

Cost control

Reduce product design costs through lower

failure rates

Source: Datamonitor 2010

Consumer insight must drive product development

Consumer insightIdentify the need

Practical ideationDevelop the product

Value proposition & benefits of products

A customer centric organisation must utilise an array of market

intelligence to firmly grasp what issues are driving consumers’

and clients’ choices and attitudes.

A customer centric organisation must let its product innovation

be driven by revealed consumer needs

Source: Datamonitor 2010

• 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

Example of successful customer centric product design: Savings

SmartyPig rewards savers with more than just interest

• SmartyPig offers consumers a means to organise their savings ambitions

• The rewards it offers are relevant and significant

• Tangible rewards like cashback are particularly appealing to consumers

• 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

Customer centricity

Underlying demandHigh

High

Low

Low

1) Introduction






7) Moving to action

Agenda

A true story – meet John*

Why become client centric?

A true story /cont


A true story /cont


Now, imagine if the private banker…


• Make sure the bank innovated to keep clients like John happy



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?


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

Bottom line:

• Become client centric because…

• … for those in a commoditised B2C environment, it is a more profitable business strategy


1) Introduction






7) Moving to action

Agenda

“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

“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

Online directly from the company

Online through a price comparison site

Through an tied agent / IFA

Through my bank

Other

Don't know

11.1% 14.6%

4.6%

71.6% 53.0%

11.5%

16.2%

4.3%7.2%

0%

10%

20%

30%

40%

50%

60%

70%

80%

90%

100%

South Africa Global average

% o

f con

sum

ers

with

life

insu

ranc

e

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 %

59 %

who pick an insurer based on friends’ advice are satisfied with their choice

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

1) Introduction






7) Moving to action

Agenda

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

The future role of advice

Client incorporates the landscape changes

PastPast

FutureFuture

Product focus Client need / solution

Business unit Silos

Standardised solutions

Single advice channel

Single need view

Collaborated, cross-functional units

Customised, individualised

Multiple advice channels (partnerships)

Multiple need of client (single view)

1) Introduction






7) Moving to action

Agenda

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


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


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


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


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


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 does this mean going forward?

• 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

What next?

• 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?

Where to start – implementing in practice

• 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

Closing thought

Thank youLee-Ann du Toit

Documents

Client Centricity Momentum Sales Lee-Ann du Toit