Institute of Customer Service

Leading Customer Service Performance and Professionalism

Member Forum AEGON 1 Nov 2010

agenda

• Simon Skinner, Customer Service Director Life & Pensions AEGONMaintaining service in challenging times

• Susie Wilcock, Head of Brand Management and External CommunicationsPromoting the AEGON brand

• Jo Causon, CEO The Institute of Customer ServiceMatching the external and internal brand - the critical nature of employee engagement in delivering the customer promise

• Lynne Copp, Managing Director TheWorkLife Company‘Focusing on balance and wellbeing that drives customer excellence, people satisfaction and business results

Simon SkinnerCustomer Service Director Life & PensionsAEGON

Institute of Customer Service

Life & Pensions Customer Services

AEGON UK

1 November 2010 Simon Skinner

Theme for the day

“Seize the hour”

“Don’t waste a good crisis”

‘Verge of the abyss’ – My Dad the Visionary!

Lehman Brothers

Euro 8 Trillion

Lingerie

Pigs

Houses

Trust

55% bank customers

54% insurance

Simplicity and transparency

“Getting back to basics”

“Putting Customers First”

The purpose of Customer Services is to deliver excellent service

to its customers, partners and the AEGON Group

The purpose of Customer Services is to deliver excellent service

to its customers, partners and the AEGON Group

Our CustomersOur

ShareholdersOur People

• Better quality service for our customers and partners• Higher returns through lower cost, improved customer retention and increased sales• Rewarding careers in a refreshing and fun environment

This purpose balances the needs of our three stakeholder groups:

The Customer Services journey / purpose

8

Excellent quality

customer service

Reasonable, low cost

Compliant and low risk

Agile and responsive

Strong people capability

9

Excellent quality customer service

• Brilliant basics

• Based on what customers value

• Friendly and helpful

• Good quality service will be market leading

Delivering the purpose

Service we wouldexpect to receive

ourselves

Reasonable, low cost

• Reduce low-value demand

• Increase productivity

• Encourage customers to lower cost channels

• Robust cost control and MI

An efficient low cost operation

Compliant andlow risk

Operations that

deliver

• Effective compliant servicing

• At low risk

• Efficiently

Agile and responsive

Operations that are

• Agile and allow efficient work management

• Flexible and easy to change

• Responsive to the needs of customers, distributors and the business

Strong people capability

Excellent people with capability and

drive to deliver outstanding result

• Skilled people

• Engaged teams

• Strong team management

• Refreshing, positive and enjoyable culture

• Rewarding career

Where are we headed?– a future-state operating model

Customer

High value customer segment

Mid value customer segmentSelf-servicedirect access

Telephony(“one and done”)

Outbound calling / Retention

Self-service support

Paper-basedtransactions

NewBusiness

Servicing

Claims

Service deliverymanagement of

closed book

Fle

xib

le R

esou

rce

Where do we start from?

Internal efficiency

Customer service delivery

Change delivery & governance

People

Multiple teams doing the same thing Lack of consistency and common processing Consequent impact on operating costs

Inconsistency in delivery of service Existing silos act as barrier to sharing best practice Potential to differentiate service delivery between open and closed books

Need to improve change delivery capability and governance across CS Poor CS operational risk management capability

Need for investment in strong leadership / management capability Over-reliance on a relatively small group of expert resources Need to improve flexibility and capability for load-balancing across teams

11

What are the challenges and opportunities?

May 2009

Customer feedback THIRD QUARTILE

Cost base

THIRD QUARTILE

Staff engagement SECOND QUARTILE

Opportunity

Improve empathyand consistency

Improve efficiencyand clarity

Culture andleadership

Improve advocacyby 25%

Improve efficiency

by 25%

Build on existingstaff engagement

2012 ambition

AEGONCustomer

Experience

TreatingCustomers

Fairly

Legacy Management

Key enablers

Continuous Improvement

Variableexperience

InconsistentUnintentionalNot measured

Predictableexperience

ConsistentDeliberate

Not differentiatedNot valuable

Brandexperience

ConsistentDeliberate

DifferentiatedValuable

13

over the longer term we wish to use customer service to deliver our brand experience; our performance will be market-leading and top quartile

the first steps on this transformational journey are designed to build an industrial strength capability and a platform to deliver the longer term ambition

these first steps will deliver a predictable, consistent level of service for our distributors and end customers

onto this, we can then build our differentiating proposition

To take the first steps on the journey, we recognise that we need to move the current experience onto a more consistent, predictable footing

Where does this take us on the journey?

Jun 10May 10Apr 10Mar 10Feb 10Jan 10Dec 09Nov 09Oct 09Sep 09Aug 09Jul 0914

Continuous Improvemen

t

Continuous Improvemen

t

Legacy Manageme

nt

Legacy Manageme

nt

Business-driven change

Business-driven change

Business Transformati

on

Business Transformati

on

Organisational change

Organisational change

Implementation of key operational efficiency initiatives identified for 2009/10; deliver of ongoing small change

Analysis and planning of

priority measures

Mobilisation/ priority landscape

Implementation of new organisational design in CS and realisation of associated

benefitsImplementation of people management initiatives identified

for 2009/10

Implementation of key technological and infrastructural enablers• Unified voice technology• Integrated workflow management

• Secure email

Detailed planning and implementation of Cross-Departmental efficiency initiatives identified for 2009/10/11

How do we get there? - CS Transformation Programme to end 2012

Ongoing analysis and delivery of remediation work to correct prioritised issues

• Investment Proposition

• SIPP • Variable Annuities

Further consideration and prioritisation of a number of new business propositions:-

Building on success – “the art of the possible”

4000

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February March April May June July August

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transferred

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Individual

2000

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Vol

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waitingcustomerspending

queues20

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Susie WilcockHead of Brand Management & External CommunicationsAEGON

Brand and sponsorshipPresentation for the Institute of Customer Service

Susan Wilcock1 November 2010

18

Agenda

1. A short video…

2. Why sponsorship

3. Our partnership with British Tennis

4. Objectives

5. Implementation and campaigns

6. Sharing the benefits with customers

7. The results

8. A few thoughts for 2011

19

Why sponsorship?

Strategic need to build consumer brand awareness

Our industry is changing (RDR/ pensions reform) – new opportunities may require a new approach

Lack of name awareness already a potential obstacle to some business

Sponsorship can:

Fast track the growth of our brand, compared to traditional advertising– Existing base of engaged consumers (tennis fans)– Potential to generate media coverage & PR over and above ads

Bring a new vitality to our communications

Provide opportunities to engage with employees and existing customers

20

Our partnership with British tennis

Lead Partner of British Tennis

Five-year deal with the LTA, extending from grass roots to world-class events

National and international events

Including AEGON Championships, Classic and International

Player development

Team AEGON and AEGON FutureStars

Community

AEGON Schools Tennis and AEGON Parks Tennis

National teams

AEGON GB Davis Cup and Fed Cup Teams

AEGON Masters Tennis

Separate deal to sponsor the year-end finale to ATP Champions Tour

Held at the Royal Albert Hall in December

Legends of the game, like Rafter, Cash and Henman

Helps to maintain year-round brand awareness

21

Objectives

Build brand awareness – and ultimately, consideration– Year 1: focus on name awareness– Years 2-3: increasing emphasis on brand message – who we are/ what we do

Engage with our customers, intermediaries and employees

General consumers

Active financial consumers

Existing planholders

Advisers

Consumers

CDMsTennis

enthusiasts

Interest in tennis

Follows at least Grand Slams

Play at least twice a year

Trustees CEOs CFOs MDs Benefits Managers

22

Implementation

1. Embedding AEGON in our sponsorship properties

• Tennis turns blue!

• Courts, players, parks, schools – all key touchpoints carry the AEGON logo

• Year-round brand presence

2. Embedding sponsorship in our communications

• Corporate website, brochure, stationery

• Rebrand of AEGON Scottish Equitable to AEGON

23

Campaigns

Campaigns bring our brand and sponsorship to life.

Summer sees the peak public and media interest in tennis

Multi-media campaign across broadcast, press and online, running from French Open to end of Wimbledon

Co-ordinated with PR

Audience of 10 million across BBC and Eurosport coverage

Twin deals with The Times and Daily Telegraph – ads and editorial

New AEGON tennis website received over 90,000 hits and we collected over 5,000 email addresses

Total advertising reach of 39% ABC1 adults

24

Campaigns (cont.)

AEGON Masters Tennis

End-of-year event provides opportunity to remind and reinforce brand awareness with tennis fans

Smaller-scale campaign across ATP World Tour Finals and the Masters– Press, online, ambient branding

Latest creative makes most explicit link yet with our business

25

Sharing the benefits with customers

Exclusive competitions to win tickets for AEGON-sponsored tournaments– AEGON Championships, Classic and International– Davis Cup ties– AEGON Masters– Including top prizes with hospitality and

accommodation

Exclusive ticket discounts eg 10% off at AEGON Masters

Working on priority booking for tickets for 2011

Communicated via our websites, email and inserts with statements/ letters– Helps us collect customer data like email

addresses– Helps to communicate corporate messages eg

name change

Our Contact teams are kept informed, with Q&As in case of questions or problems

26

Some more good news

AEGON has been voted a Business Superbrand for 2011

Superbrands commissions independent research to identify the UK’s strongest brands

These are then voted on by an Expert Council and 1,700 business professionals

Top 500 B2B companies are awarded Business Superbrands status

This is the first time AEGON (or Scottish Equitable) has been included in the listing

More evidence that our brand awareness is growing, especially among CDMs

27

Looking ahead to 2011

Next year is the midpoint of our partnership with British Tennis

Need to continue expanding the reach of our campaigns and activity– New media options for campaigns eg radio, more broadcast– Work closely with PR– Ensure fit with target audiences for At Retirement and Workplace Saving

Creative to carry stronger brand message

Provide more opportunities for customers– More targeted offers eg AEGON Classic discounts for Birmingham customers– Improved communications channels eg new AEGON website and ezine– Drive to obtain marketing permissions

Thank you – any questions?

Institute of Customer Service

Employee engagement and the customer service promise

Joanna Causon

Chief Executive

1st November 2010

the renaissance of customer service• customer service is a critical element of business

performance

• changing relationships between organisations and their customers - customers now hold the power

• future of customer service - changing attitudes of we, the customer- challenges brought by technology- changing business models - changing attitudes of employees

why does service matter?• £15.3 bn – the cost of poor customer service to UK economy

annually- business abandoned and lost to entire industry -

£5.2bn

• £238 average annual value of each customer relationship lost

• 73% of consumers have ended a relationship due to poor customer service

- consumers aged 27-42 most likely to switch

• one in four people have left a financial services company or utility provider in the last year following poor customer service

Source: Genesys – The Cost of Poor Customer Service: September 2009

characteristics of organisations that deliver excellent service• deal with problems and queries

• deliver on the promise

• make it easy to do business with

• go the extra mile

• continually looking at ways to innovate

• create customer strategy, service delivery and the right culture

what are the key priorities for customers?• overall quality of product / service provided

• friendliness of staff

• handling problems and complaints

• speed of service

• helpfulness of staff

• handling enquiries

• being treated as a valued customer

• competence of staff

• ease of doing business with

• being kept informed

the direct impact of an engaged workforce.will result in:

• 12% rise in profitability

• 18% increase productivity

• 43% hike in revenue

not to mention…

• 5 fewer sick days a year

• 87% less likely to leave

Source: MacLeod and Clarke : Engaging for Success 2009

the direct impact of an engaged workforce.• 70% of engaged employees have a good understanding of

how to meet customer needs as opposed to only 17% of disengaged employees (CIPD)

• engaged employees generate 43% more revenue (Hay Group)

• Engaged employees: 2.7 sick days per year. Disengaged employees: 6.2 (Gallup)

• Engaged employees are 87% less likely to leave (Corporate Leadership Council)

the direct impact of an engaged workforce.• 67% of engaged advocate their organisations; only 3% of

the disengaged do (Gallup)

• 9 out of 10 of key barriers to successful change, people related (PWC)

holding up a mirror • customers are sensitive to and judgemental of:

– people’s attitudes

– behaviours

– and the way they communicate

• link between service and selling as well as satisfaction

• consumers spend more with those they like

• 10 seconds to make a positive impression

expectations – more willing to complain – more able to do so • more disposed to tell others about bad experiences

- 81% - 2001

- 89% - 2006

- 90% - 2010

• more able to do so

• growth of social media

– as consumers we can draw down information more easily

– seek tailored solutions both offline and online

• tell the world when something goes wrong – not just our friends

• need to look beyond traditional measures of customer satisfaction

UK customer satisfaction levels

75.6

80.280.280.0

79.377.477.2

76.775.3

72.372.272.1

70.069.6

77.777.276.9

75.3

50 55 60 65 70 75 80 85 90 95 100

UKCSI

Retail (food)Services

Retail (non-food)Tourism

AutomotiveFinance (insurance)

LeisureFinance (banks)

TransportTelecommunications

Public Services (local)Public Services (national)

Utilities

Northern IrelandScotland

WalesEngland

Jul-10

Jan-10

UKCSI: the top performers

• John Lewis (88)

• Waitrose (88)

• Lloyds Pharmacy (86)

• SAGA Holidays (86)

• Virgin Holidays (85)

• Marriott (85)

• Marks & Spencer (food) (85)

• Boots (84)

• First Direct (84)

• Marks & Spencer (84)

bottom line impact of good customer service• top box customer satisfaction

• 2x likely to renew/stay

• 3x likely to recommend

• 24% higher net profit margin

• 71% higher profit per employee

what are they doing to get these results?• professionalism

• commitment to staff

• genuinely empowering

• listening

• building service cultures

• engaging and championing

• creating customer strategy, service delivery and the right culture

keys to employee engagement• leadership through a business story

• engaging managers

• developing the employee voice

• integrity

• alignment

the challenge is to do more with less • increased demands come against the backdrop of a recession

• greater stress among the public

• falling morale among staff

• important we encourage and build customer focus– led from the top – development programmes built with a core focus on service– each customer is an individual and needs to be treated as

such– key is to help staff make the right judgement each time

lessons learned

• customer ‘management’ is fast becoming a strategic boardroom issue

• only sustainable competitive advantage

• customer feedback is immediate and highly visible

• consumers have the power to shape image as never before

• strong service leadership is crucial

• greater engagement and real involvement of your staff

• live the brand

how the Institute can help.....• evidence – research base

• sustainability through skills and professional development

• measurement – impact

• benchmarking – best in class

• recognition and accreditation

• context not alone

• engagement – understanding your drivers

• listen to your views

• get feedback and factor into our development

• first port of call

• raise the profile and impact of customer service

Thank you

Jo Causon

Institute of Customer Service

Lynne CoppManaging DirectorWorkLife Company