Marketing 4.0 Part 2, Chapter 5 to 7

Marketing 4.0: Moving from Traditional to Digital

Concept Synthesis and Local Application:

I am currently affiliated with a British Financial Services company with over a 170 year history.  We are  Insurance company that offers a variety of financial services with significant operations in Europe, the United States and 14 Asian Countries.  I am currently the Sales Director for Visayas responsible for the strategic growth of our operations in Visayas.  I plan and execute tactical initiatives in support of the company’s growth strategies in the Philippines.  I lead, coach and mentor 1,200 agents and agency leaders across my territory.  I am looking forward to bringing back to my work place actionable strategies from digital marketing that will have an immediate impact on our growth efforts.

Part 2: New Frameworks for Marketing in the Digital Economy


Ch.5 The New Customer Path

1.      Understanding How People Buy (from 4As to 5As)

In our industry we also follow the same process without a fancy acronym. We follow Introduction, Opening, Disturbance or Excitement, Closing.  More or less the same philosophy. After closing, our form of act again, we teach our agents to position for the 3 R’s.  These are Resell (strengthen the commitment to ensure continuous payment of premiums), Resale (upgrades), and Referral (refer from their circle or network for additional prospects to sell to).  What is lacking in our industry is connectivity among clients.   I do not know of any forum that exists where clients discuss our brand.  If and when client’s have questions, clients would either ask their agent and ask directly to the company through our hotlines or websites.   I do, however, have seen the effect of negative publicity in social media.  One disgruntled client, happens to be a columnist, started ranting of his dissatisfaction in social media.  Company acted on this concern immediately to appease the client.  I have to say though that his complaint was unfounded and was unfair to have made public even though the company was not at fault.

2.      Driving from Awareness to Advocacy (the Ozone3)

As we are a sales company, we are focused more on the outer influence, using our sales agency and modest branding and communications campaigns to create awareness and appeal for our brand.  What I appreciate most about this concept, it has opened my eyes to the need to start allocating resources, in terms of time, talent and finances, to developing the influence of others with the ultimate goal of achieving the influence of own.  We have made efforts but with this topic, it is now more obvious that more deliberate and strategic approach must be executed to further our growth in the business.

3.      Summary:  Aware, Appeal, Ask, Act and Advocate

Our company is already among the top 5 in terms of new sales and total premiums collected in just 20 years of operations.  As much as we have achieved so much in our short history in the Philippines (short because we are playing in a field with companies operating for 100 years already), we can still capitalize on digital marketing to improve our performance, leveraging on both the 5 A’s and the Ozone3.  Instead of using the traditional mode of sales growth by growing our distribution channel, our company should start capitalizing social media as a complementing strategy to improve awareness, appeal and ultimately make our clients advocates through their own influence.

a.       How can your brand identify and leverage the most critical touch points in the customer path?

Being a sales agency, out ultimate touch point has always been the one-on-one contact between client and agent.  As discussed this is the traditional model and this is what we do well and we continuously are enhancing the customer experience as we believe that this will generate the 3R’s as mentioned before.  In the contest of Marketing 4.0, creating advocates among our clients.  Notwithstanding, we need to also improve on the Awareness and Appeal through social media.  Long have we been asking ourselves, what is the next distribution channel for our brand.  Obviously it is distribution through social media by using it as a contact tool to generate awareness and appeal for our brand.  We are right now in digitization process where in the ultimate goal would also be to act without the need for an agent to facilitate.  Right now we are in the early stages of this process where we still need the agent as a facilitator of the business. In many articles on digitization in the financial services industry, there will come a time that the whole sales process can be relegated to the digital platform.

b.      How can your business improve brand favourability and optimize marketing efforts by evaluating the three main sources of influence across the customer path?

Outer Influence – deliberate and strategic implementation of tactics to use social media as an effective tool in creating awareness and appeal; and, with further development of our digital platform, ultimately to act on the purchase of financial products.

Others’ Influence – we already understand the value of converting our clients into advocates; but, there must be a more systematic and deliberate effort in this path towards advocacy.  We have made and lost sales based on existing customer’s good and bad experience with our brand.  For clients with a good experience, it is a well- known fact the good agents usually come from our satisfied clients.  They believe in our brand to the point that they believe that they can do well, in terms of being a licensed insurance agent, in offering our products and services. 

Own Influence – converting a client to an advocate is all about the customer experience.  As I’ve said many times in the past, even before the age of social media, our satisfied clients are our walking talking billboard and the ultimate contact point has always been with their soliciting and servicing agent.  More so in the digital era where social media allows for free sharing of ideas and opinions. To succeed is make sure that in every contact opportunity the client has a good customer experience.  Again , to complement our agency force, this is the reason why we are heavy in developing digital tools that will help the client, manage their own accounts on-line as an alternate method of servicing their needs

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Ch.6  Marketing Productivity Metrics (PAR Purchase Action Ratio and BAR Brand Advocacy Ratio)

1.      Introducing PAR and BAR

With the Purchase Action Ration, our company as a fledgling campaign where in the branding process and conversion process is being monitored, measured and analysed.  In a previous COSLA, I mentioned about those 4 new segments we are focusing on and we already have set up a campaign and system that creates awareness and appeal, facilitated symposiums, forums or events which becomes our initial contact point face to face that allows the segment to ask and ultimately act on the purchase of insurance.

As for Brand Advocacy Ratio, as mentioned earlier, there are conversions from client to advocates whether the client becomes an agent or just a raving fan of our products; but,  there has no deliberate process even less a formal measure of the ratio.  This is one actionable item I take back to my work place.

2.      Decomposing PAR and BAR

As a company a company we have been using ratios similar to PAR to identify weak points that should be improved on to achieve the ultimate goal of conversion.  As an example in the sales process we measure the ratio from Prospect to Appointments Set to Opening Presentation to Closed Sale.  We use bench marks such as 10 – 5 – 3 -1.  Any deviation from the bench mark requires intervention to improve the numbers.  As discussed earlier, we have a fledgling marketing project and so far results of the conversion are promising.

3.      Driving Up Productivity

This is where opportunity abounds for our brand.  We have been relying on the traditional model of connectivity through agents.  Through Social Media, we can have more brand recall as one-on-one contact is obviously limiting.  By developing tools that creates awareness and maybe even a conversation, this may be that alternative distribution channel that we have been looking for, low-cost at that.  As we already know, Awareness and appeal is just the starting point as there is a need to provide campaigns, processes or systems to improve Increase Attraction, Optimize Curiosity, Increase Commitment and ultimately Increase Affinity.

a.       How can your business adopt the new metrics of PAR and BAR to measure marketing productivity.

We are already using PAR but it is still at its infancy.  Once we have enough data to measure the results, this will definitely help us improve our engagement in the critical touch points.  As to BAR, I plan to collaborate with our Marketing Department to do data mining database analysis of our existing clients with repeat sales and determine the factors behind the repeat sales as this may prove to be an important revelation that could be used in converting more clients to advocates.  My findings will then be converted to tactical campaign for a more deliberate effort to increase the advocates among our clients.  In our vernacular, client-advocates are also known as Center’s of Influence.

b.      How can your business trigger favourable customer conversations in order to drive awareness without increasing the marketing budget significantly?

We have had client-get-client campaigns before.  These are usually in the form of Economic and Market Updates, Investment Forums and Client appreciation night where existing clients will bring along with them a referral to our company. Needless to say, these are costly campaign as they are usually help in hotels.  Using social media to trigger customer conversations, as a company we can start by emailing all our current clients to visit and like our facebook page.  We already have the data as the email address is part of our application forms for the purpose of correspondence.  Since the information is already available, I believe that we should already start an FAQ or Forum page exclusively for clients to be used as a forum to initiate positive conversation as well as a platform for FAQs (Frequently Asked Questions).  Further enhancing this, we could encourage clients to write their own story about the positive impact of financial planning in their lives.  Long have we been limited, due to compliance and confidentiality issues, from sharing stories of our clients.  This time around, it would be the client volunteering their story on our page, straight from the horses mouth so to speak.

Ch.7 Industry Archetypes and Best Practices (Channel, Brand, Sales and Service Management)

1.      4 Major industry Archetypes

Door Knob – reminds me of the grocery store where at the end of the day, price, availability and habit are usually the factors for purchasing, an example would be substitutes.  Since I cook, I do my own groceries and I am loyal to certain brands.  If my brand is not available and there is no immediate need to purchase I simply do not buy.  On the other hand, if I really need it for a recipe and the brand is not available, I usually buy what is available as a temporary substitute; but, I always go back to the brand I prefer.

Goldfish – reminds me of suppliers.  As mentioned in the text, usually found in B2B.  This is why our Corporate Asset Management is usually behind in deliveries as our internal process for purchasing is cumbersome due to internal controls such as check and balance.

Trumpet – again, I can relate to this as I am a luxury watch aficionado. I am a fan of certain brands such as Omega, IWC and Penerai and I follow forums on these watches. And yes, I can not afford them.  Just a fan.

Funnel – very clear that this pertains to the services industry, including ours. As discussed in the text, almost all facets of the 5A’s are critical touch points in our industry.

2.      4 Marketing Best Practices

High Bar median – Wide Bar Range: advertising plays a key role for purposes of brand loyalty.  As discussed in the text, no wonder giant consumer companies are heavy on advertising.

High Bar median – Narrow Bar Range: what comes to mind is the RTW industry, whether brand or not.  Critical factor would be their distribution or channel in terms of accessibility and attraction.  The occasional Sale Campaigns help in the attraction to increase sales. From personal experience, they have been very effective.  My wife is loyal to certain brands and when she gets a text, an email or a facebook or instragram alert on a sale or promo, she would immediately go to their stores even if she doesn’t need anything new.

Low Bar – Wide Bar Range: Aside from the Airline Industry, the Hotel and Resort industry falls under this category as well as service is usually the defining factor for loyalty and repeat sales.

Low Bar – Narrow Bar Range: As mentioned in the text, industries that depend on a sales force to drive their sales below in this category.  In my opinion, looking at the traditional model of Financial Services, yes; however, with the growth in the industry coupled by increased awareness on the value of financial services primarily because of the internet, work-of-mouth is now playing a critical role in the decision making process of potential clients.

3.      Summary: Learning from Different Industries

I appreciate the fact that categorizing industries doesn’t mean it is statis.  Like any other organization, we should capitalize on our strengths and work on our weaknesses.  By identifying our weaknesses and leveraging on our strengths, we could learn from the other models to improve our BAR.  As I mentioned above, it would seem that our industry is already moving towards word-of-mouth where service is a critical factor for success.

a.       Which archetype best describes your industry?

Financial Services fall under the Funnel archetype.  As I already mentioned we are already monitoring ratios as bench mark for performance such as the 10-5-3-1 metrix.  Aside from this, our clients go through the process of purchasing as defined in the text.  Purchases are planned and the client is involved in the design of their financial package or plan. It is highly one-on-one the sales could be made or broken during the conversation between prospect and agent.  I’ve also emphasized to our agents, one reason why commissions are higher in our industry is the for the simple reason that they are expected to render after sales services.  Unlike other industries where commissions are one time only (real estate or automobile sales), commissions are higher and spreadout to as long as 5 years as the industry puts a heavy premium on after sales service as this is a contributing factor in converting clients to advocates, either in the form of buying again, referring us to other prospect or the ultimate sign of advocacy, getting themselves licensed and selling our products and services as well.

b.      What are some of the key improvement opportunities for your business based on that archetype?

The challenge is the multiple touch points.  I see opportunity specially on awareness and appeal.  The traditional one-on-one has worked well for the industry but moving forward, capitalizing on the ability of social media to already help us create awareness and appeal should already form part of our strategic initiatives.  It is good to note that I’ve seen some of our agents who, on their own initiative, have started to create materials for posting on social media that are building awareness and creating appeal for our brand.  The company should take cue from this and have a deliberate campaign.  As mentioned earlier, we already started but definitely can be improved if properly measured using PAR and BAR.

c.       What is the key success factor in your industry? How can you learn from other industries?

Key success has always been the sales force.  As a traditional model for distribution it has worked well.  However, there is a need to capitalize on the digital platform of the business.  By digitizing, some of the process, this should enhance the customer service in terms of speed and accuracy. Most of all, I firmly believe that social media can be used as a quasi if not full distribution channel for our business.  Quasi as it can already create the awareness and appeal. Since we are still developing our on-line application form we still need the sales agent to facilitate the purchase of insurance.  Once developed and we have an on-line platform for application for insurance, then it becomes a fully digital process.  I do not believe that on-line will fully replace agents; but, it would be an effective complement to our agencies.