Financial marketing


Are We Focused?

10th May 2013

The financial services industry likes rules; in fact it couldn’t function without them. Policy documents are awash with them, we call them terms and conditions. Pricing is fundamentally mathematics, based on a set of rules. Rules have served us well. So when we are asked to consider regulation based on principles, Treating Customer Fairly, how have we fared?

The reality is that we are simply being asked to look at the business with a customer’s eye and ensure that the customer is at the heart of the business. All good marketing practice. But sometimes life just simply gets in the way.

For example, lets look at the TCF principle that states that we must ensure consumers are provided with clear information during, and after, the point of sale. Can your business say it achieves this? Have you looked at all your wordings? We have seen a three-paragraph description of the term ‘Unemployed.’ Exclusions were scattered all over the document and the benefits were lost in a sea of terms and conditions. There was a genuine underwriting reason for doing this, but is it helping the business build long term profitable customer relationships?

Customer focus is not alchemy. It’s looking at the business in terms of the customer at the centre. We can break it down into some basic questions:

Is customer focus part of your firm’s culture? Boardrooms up and down the country may shout ‘yes’, but can your firm demonstrate it is. Do people in your organisation have input into your TCF policy, does it have a TCF committee? Does everyone understand your firm’s TCF policy? Are staff empowered and is their training sufficient and appropriate enough for them to discharge their duties effectively? In a nutshell, does everyone ‘think customer’?

Secondly, is your firm confident that its overall proposition strategy and product range meets the needs of your target markets? Has your business undertaken sufficient research on target markets to ensure your products are relevant and competitive? Can customer satisfaction levels be monitored and measured to show this?

Thirdly, are operational processes robust enough? Do IT systems have sufficient functionality? How easy is it to see where things are going wrong, and act quickly to correct them? Do third party suppliers operate within the firm’s operational requirements? Do you put sufficient resources into handling and learning from, complaints?

Fourthly, are communications with customers clear, fit for purpose and delivered effectively? Where the business relies on third party suppliers, does their communications delivery meet your own requirements?

Finally, can the business measure all of these things? Is management information appropriate, delivered in a timely fashion, and understood by all who use it? And most important of all, does the business act upon it?

Customer focus will ensure the long term profitablility of our businesses and the industry. It will sieve out those companies who have enjoyed high margins at the sacrifice of the customer. Above all, we will be able to improve the confidence the general public has in our industry and enhance their understanding of the products they need.