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INNOVATIVE GO-TO-MARKET STRATEGIES TO DRIVE FOR FINANCIAL PRODUCT INNOVATIONSCase Study, Concepts, and Debatable Ideas
Kenny OngTakaful IKHLAS Sdn Bhd
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Branding today…
13th April 2009
•Two Domino’s employees
•YouTube
•Apology from Domino’s after 48 hours
•1 million hits
•Twitter: questions on silence
•LinkedIn: suggestions by users in forum
BusinessWeek, May 4, 2009
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• Shareholder : MNRB Holdings Berhad (100%)
• Established Date : 18 September 2002
• Operational since : 2 July 2003
• Takaful Model : Al-Wakalah
• Business Portfolio : General and Family Takaful
• Number Products : More than 90
• Number of Participants : More than 1,800,000
• Number of Agents : More than 6,000
• Number of Staff : 490
• Regional Offices : 11
• Paid Up Capital : RM295 million
TAKAFUL IKHLAS CORPORATE PROFILE
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Referral
Employees
Specialist& Hospitals
Panel GP Clinics
EMPLOYEES & DEPENDANT• Claims Submission• Tracking of eligibility• Enquiries & Complaints • Employee benefit materials• Unions• Abuse of benefits
PANEL CLINICS•Processing Bills•Payment •Appointment and removal•Policies & Procedures•Tracking Entitlements •Issues & Complaints•Overcharging & Abuse •MC Verification
SPECIALIST & HOSPITALS•Issuance of GL•Hosp. Bank Guarantee/Deposit•Appointment and removal •Tracking Entitlements•Processing Bills•Payment •Hospital Reports
CLIENT
IKHLAS
EASY ACCESS TO CARE•Panel of 2000 clinics
nationwide•All major hospitals recognises
our GLs•Appointment & management of
medical panel
1st CLASS SERVICE•Benefit & Procedure briefing
•Help Desk•Tri-annual Cost & Utilization
Report•Benchmarking
•Analysis & Recommendations
PEACE OF MIND•24/7 LOG Issuance •Cashless Admission
•Comments
IKHLAS Medical/Health Solution
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"The digital watch didn't come from established watch companies, the calculator
didn't come from slide rule or adding machine companies, video games didn't come from board-game manufacturers Parker Bros or Mattel, the ballpoint pen didn't come from
fountain pen manufacturers, and Google didn't come from the Yellow Pages"
Bob Seidensticker, Futurehype
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What’s wrong with Strategic Planning Today?
Long-term Plans
Objectives
Strategies
Enablers
Resources
Also known as L.O.S.E.R.
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What’s wrong with Strategic Planning Today?
1. Biggest Threats often come from OUTSIDE your normal industry
2. Planning from the base of an ‘Existing’ organization vs. zero-based
3. Traditional Analysis (e.g. SWOT) based only on known or existing assumptions or knowledge
4. Spending too much time in market research and analysis
5. Defining the company from a Product/Service perspective vs. Category vs. JTBD (e.g. Coca-cola)
6. Wrong Benchmark – already successful vs. what made them successful
7. Implementing BSC and PMS to improve Business Model and Strategy
8. New strategy, same people
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Finance Today…
$19.90
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Financial Product Innovation from Non-Traditional Financial Players
• M&A: bar code readers, inventory tracking, location-based deals
• App: loyalty card, coupon, NFC, mobile payment at restaurants and cafés
• eWallet (soon)
• eWallet – in collaboration with Citibank, MasterCard, Sprint Nexus 4G
• Raised $32,000,000 - $10 at a time, via TEXT for the Haiti earthquake 2010
• the largest holder of personal savings in the world: $2.1 trillion of assets in yū-cho savings accounts, $1.2 trillion of assets in kampo life insurance services, ¥140 trillion of government bonds.
Guess Who?
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Contents
1. Holistic Brand Experience
2. Value Proposition
3. Brand Co-Creation
4. Product Launch
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Branding
And what this means to businesses today
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The real goal of Marketing and Branding
Understanding our role in the whole scheme of things
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What is the purpose of Marketing & Branding?
Ultimate Objective of Marketing: “Get more people, to buy more things, more frequently, at higher prices.”
Sergio Zyman
“Retention and Loyalty are useless if No Conversion is happening.”
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What is the purpose of Marketing & Branding?
“Retention and Loyalty are useless if No Conversion is happening.”
“Communication is useless if No Conversion is happening.”
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What is the Objective?
1.Comm = Relationship (something like Dating)
2.Comm ≠ Media glitz 3.Comm ≠ ATL/BTL/BwTL/ArTL/FTL4.Comm ≠ CSR5.Comm = Get more people, to buy
more, more frequently, at higher prices
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Innovating and Branding the Business Model
The biggest and most holistic consideration
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The McPlaybook*
Make it easy to eat• 50% drive-thru• Meals held in one
hand
Make it easy to prepare• High Turnover• Tasks simple to learn
& repeat
Make it quick• “Fast Food”• Tests new products
for Cooking Times
Make what customers want• Prowls market for new
products• Monitored field tests
*Adapted from: Businessweek , Februrary 5th 2007
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Retail Adaptation: McDonald’s Menu
Product Variation:– 80% Global, 20% Local– home-style meals (Boston Market) – burritos (Chipotle)
– coffee (McCafé) – DVD rentals (Redbox) – Premium menu items (snack wraps, sweet tea
Frappes)
Retail Adaptation: McDonald’s Design
$2.4 billion to: •redo at least 400 domestic outposts, •refurbish 1,600 restaurants abroad, and •build another 1,000
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What is the Business Model?
UVP
Market Discipline
Cash-Flow Model
•Tata Nano
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Business Model: UVP
Unique Value Proposition (USP)
=
Targeted Customer
=
Core Buying Purpose/ Customer Value Proposition/ Job To Be Done (JBTD)
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Business Model: UVP
“The Product is Not the Product”
• What is the customer really buying?
• What is the “Core Buying Purpose”?
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Business Model: UVP
1. Insufficient WEALTH
2. Insufficient ACCESS
3. Insufficient SKILL
4. Insufficient TIME
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Business Model: Cash-Flow Model
Revenue
Cost
MarginCash Flow
Assets
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Business Model: Cash-Flow Model
Cash-Flow Model Examples:1. Gillette Shaver2. IBM and Lenovo3. GM and GM Finance4. Google and Ad Revenue5. McD and Drive-thru revenue 6. SaaS PAYU e.g. Siebel/Salesforce7. Facebook and Investors8. Courts and Instalments9. Kindle Fire and e-Books10.Celcom and MVNOs11.Kenya and M-Pesa12.Banks and Non-Fees vs. Fees
Revenue
Cost
MarginCash Flow
Assets
Revenue
Cost
MarginCash Flow
Assets
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What is the Business Model?
UVP
Market Discipline
Cash-Flow Model
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Market Discipline
"They are the most innovative"
"Constantly renewing and creative"
"Always on the leading edge"
"A great deal!"
Excellent/attractive price
Minimal acquisition cost and hassle
Lowest overall cost of ownership
"A no-hassles firm"
Convenience and speed
Reliable product and service
"Exactly what I need"
Customized products
Personalized communications
"They're very responsive"
Preferential service and flexibility
Recommends what I need
"I'm very loyal to them"
Helps us to be a success
Product Leadership
OperationalExcellence
CustomerIntimacy
• Cost• Convenience
• TCO
• Features, Benefits
• Limited Range
• Solutions• Customization
• Breadth & Depth
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Market Discipline
"They are the most innovative"
"Constantly renewing and creative"
"Always on the leading edge"
"A great deal!"
Excellent/attractive price
Minimal acquisition cost and hassle
Lowest overall cost of ownership
"A no-hassles firm"
Convenience and speed
Reliable product and service
"Exactly what I need"
Customized products
Personalized communications
"They're very responsive"
Preferential service and flexibility
Recommends what I need
"I'm very loyal to them"
Helps us to be a success
Product Leadership
OperationalExcellence
CustomerIntimacy•Air Asia
•LV
•Ramly
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Operational Excellence(low cost producer)
Ref: The Discipline of Market Leaders, Michael Treacy & Fred Wiersema; 1995
Product Leadership(best product)
Customer Intimacy(best total solution)
Alignment & Consistency: Market Disciplines
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Operational Excellence(low cost producer)
Ref: The Discipline of Market Leaders, Michael Treacy & Fred Wiersema; 1995
Product Leadership(best product)
Customer Intimacy(best total solution)
Alignment & Consistency: Market Disciplines
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Operational Excellence(low cost producer)
Ref: The Discipline of Market Leaders, Michael Treacy & Fred Wiersema; 1995
Product Leadership(best product)
Customer Intimacy(best total solution)
Alignment & Consistency: Market Disciplines
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Operational Excellence
• Competitive price
• Error free, reliable
• Fast (on demand)
• Simple
• Responsive
• Consistent information for all
• Transactional
• 'Once and Done'
Operational Excellence
• Competitive price
• Error free, reliable
• Fast (on demand)
• Simple
• Responsive
• Consistent information for all
• Transactional
• 'Once and Done'
Customer Intimacy
• Management by Fact
• Easy to do business with
• Have it your way (customization)
• Market segments of one
• Proactive, flexible
• Relationship and consultative selling
• Cross selling
Customer Intimacy
• Management by Fact
• Easy to do business with
• Have it your way (customization)
• Market segments of one
• Proactive, flexible
• Relationship and consultative selling
• Cross selling
Product Leadership
• New, state of the art products or services
• Risk takers
• Meet volatile customer needs
• Fast concept-to- counter
• Never satisfied - obsolete own and competitors' products
• Learning organization
Product Leadership
• New, state of the art products or services
• Risk takers
• Meet volatile customer needs
• Fast concept-to- counter
• Never satisfied - obsolete own and competitors' products
• Learning organization
Alignment & Consistency: Disciplines, Priorities, and KPIs
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Operational Excellence
Operational Excellence
Customer Intimacy
Customer Intimacy
Product Leadership
Product Leadership
Organization, jobs,skills
Management systems
Information and systems
Culture, values,norms
Each Discipline Requires Different Priorities & Resources
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Operational Excellence
•Central authority, low level of empowerment•High skills at the core of the organization
•Disciplined Teamwork•Process, product- driven•Conformance, 'one size fits all' mindset
• Integrated, low cost transaction systems•The system is the process
•Command and control•Quality management
Operational Excellence
•Central authority, low level of empowerment•High skills at the core of the organization
•Disciplined Teamwork•Process, product- driven•Conformance, 'one size fits all' mindset
• Integrated, low cost transaction systems•The system is the process
•Command and control•Quality management
Organization, jobs, skills
Management systems
Information and systems
Culture, values,norms
Each Discipline Requires Different Priorities & Resources
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Organization, jobs,skills
Management systems
Information and systems
Culture, values,norms
Product Leadership
•Ad hoc, organic and cellular•High skills abound in loose-knit structures
•Concept, future-driven•Experimentation and 'out of the box' mindset
•Person-to-person communications systems•Technologies enabling cooperation
•Rewarding individuals' innovative capacity•Risk and exposure management•Product Life Cycle profitability
Product Leadership
•Ad hoc, organic and cellular•High skills abound in loose-knit structures
•Concept, future-driven•Experimentation and 'out of the box' mindset
•Person-to-person communications systems•Technologies enabling cooperation
•Rewarding individuals' innovative capacity•Risk and exposure management•Product Life Cycle profitability
Each Discipline Requires Different Priorities & Resources
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Organization, jobs,skills
Management systems
Information and systems
Culture, values,norms
Customer Intimacy
•Empowerment close to point of customer contact•High skills in the field and front-line
•Customer-driven•Variation and 'have it your way' mindset
•Strong customer databases, linking internal and external information
•Strong analytical tools
•Customer equity measures like life time value•Satisfaction and share management•Focus on ‘Share of Wallet’
Customer Intimacy
•Empowerment close to point of customer contact•High skills in the field and front-line
•Customer-driven•Variation and 'have it your way' mindset
•Strong customer databases, linking internal and external information
•Strong analytical tools
•Customer equity measures like life time value•Satisfaction and share management•Focus on ‘Share of Wallet’
Each Discipline Requires Different Priorities & Resources
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What does the Customer want?
* Treacy & Wiersema, The Discipline of Market Leaders, 1995
Product/Service Attributes Relationship Image
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What does the Customer want?
* Treacy & Wiersema, The Discipline of Market Leaders, 1995
Product/Service Attributes
Price
Quality
Time
Selection
√
√
Smart Shopper
Relationship Image
Operational Excellence: Quality and selection in key categories with unbeatable prices
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What does the Customer want?
* Treacy & Wiersema, The Discipline of Market Leaders, 1995
Product/Service Attributes
√
Brand
Time
Function
√
√
Best Product
Relationship Image
Product Leadership: Unique products and services that push the standards
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What does the Customer want?
* Treacy & Wiersema, The Discipline of Market Leaders, 1995
Product/Service Attributes
√
√
√
√
Service Trusted Brand
Relationship Image
Customer Intimacy: Personal service tailored to produce results for customer and build long-term relationships
Relations
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Operational Excellence(low cost producer)
Product Leadership(best product)
Customer Intimacy(best total solution)
Alignment & Consistency
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Operational Excellence(low cost producer)
Product Leadership(best product)
Customer Intimacy(best total solution)
Alignment & Consistency
HP well-balanced portfolio, mass customization
Acer super lean cost structure, aggressive pricing
Apple powerful products, premium
pricing, limited range
Still Doing well in
2009-2011
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Alignment & Consistency: Business Model
UVP
Market Discipline
Cash-FlowModel
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Branding Concept #1: The Product as a Concept
The Product is not the Product
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The “Old” Days
InventR&D
Build• Manufacturin
g
• Product Dev.
MarketMarketing
SellSales
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The “New” Days
Invent
Build
Market
Sell
R&D
Manufacturing
Marketing
Sales
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Marketing 101
Product
Promotion
Pricing
Place
4Ps
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Marketing & R&D
Product
Promotion
Pricing
Place
4Ps
Features
Brand
Target
Logistics/ Technology
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Marketing & R&D
FeaturesBrand
Target
Logistics/ Technology
Price
Promotion
Place
Product
IKEA Apple Nestle Asus
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R&D Today → RD&D
• Garnier• Digi
Design Point 1: Designed to SELL
Design Point 2: Before-After R&D
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R&D Today → RD&D
• Research, Development & DESIGN
1.Features
2.Benefits
3.Differentiation
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R&D Today → RD&D
• Research, Development & DESIGN
1.Function
2.Aesthetics
3.LogisticsDesign Point 1: Designed to SELL
Design Point 2: Before-After R&D
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Branding Concept #2: Understanding the Consumer
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Go-To-Market: Different Customers, Different Methods
Self Reliant Need Help
Seek Change
Seek Stability
Searchers Collaborators
Streamliners Delegators
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Go-To-Market: Different Customers, Different Methods
Self Reliant Need Help
Seek Change
Seek Stability
Searchers Collaborators
Streamliners Delegators
•touch and feel•‘first’ to know
•Talk to technicians/experts
•pros and cons, trends, lots of info
•Offer choices•Online resource
•innovations, new stuff
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Go-To-Market: Different Customers, Different Methods
Self Reliant Need Help
Seek Change
Seek Stability
Searchers Collaborators
Streamliners Delegators
•Minimize risk•Standardization and
consistency (routines)•Wants systems to follow
their habit
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Go-To-Market: Different Customers, Different Methods
Self Reliant Need Help
Seek Change
Seek Stability
Searchers Collaborators
Streamliners Delegators
•Treats Store Personnel as consultants
•Pilot projects, process improvements
•Co-discover new applications for existing
business/products•Ongoing coaching and value-added services
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Go-To-Market: Different Customers, Different Methods
Self Reliant Need Help
Seek Change
Seek Stability
Searchers Collaborators
Streamliners Delegators
•narrow choices•Pre-package, pre-select
(default)•Make it easier to renew
than to cancel•Focus on a specialty
(niche)•Honesty, reliability, Trust
Men vs. Women: Getting Dressed
Men vs. Women
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CNI: Basket Analysis
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Color Psychology
remind us of something familiare.g. blue = calm
Children = Bright Primary Colors e.g. toys, clothes and children's books
Cultural Variations; white = marriage (western) = death (China). Purple = death (Brazil) Yellow = sacred (Chinese) = sadness (Greece) = jealousy (France)
Young = bold colors; older = subtle palettes.
Red , Orange = to eat quickly and leave
carpeting to influence patterns of travel
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Target: Decision Chain
Influencer
Buyer
User
Again: different type, different strategy
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Customer Types vs. Messaging
Hand brake
Surviving
Well Off
Don’t Care
Customer Types
Ess
entia
ls
Tre
ats
Pos
tpon
able
s
Exp
anda
bles
Your Products/Services
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Customer Types vs. Messaging
Your Products/Services
Essentials Treats Post-ponables
Expan-dables
•Necessary•Survival
•Well-being
•Indulgences•Justifiable
•Needed or desired
•Can be put off
•Unnecessary•Unjustifiable
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Customer Types vs. Messaging: Example
Hand brake
Surviving
Well Off
Don’t Care
Customer Types •Price
•Smaller Pack•Private Labels
•Low-cost ‘Value’ products•Fighter Brands
•Less Variety/Customization•Immediate cash back
Essentials
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Branding Concept #3: Right Tools at the Right Time with the
Right Audience
The power of targeted branding communications
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Market Penetration Overview
• “Crossing the Chasm” Resistant to taking up new product (prefer ‘safe’ route)
1. Need to attract the Early Adopter (willing to try) group first via neutral and niche products
2. The Mass market will follow once they see early adopters joining
3. If company does not innovate or has weak retention plans, customers will leave
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Market Penetration Overview
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The Right Tools for the Job
Reach of Communication
Qua
lity/
Inte
nsity
of
Com
mun
icat
ion
Personal (exp)
Personal (info)
Impersonal (info)
Individual Mass
Mass Traditional, In-home, Out-Of-Home
Mass Unconventional
Mass Online
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The Right Tools for the Job
Reach of Communication
Qua
lity/
Inte
nsity
of
Com
mun
icat
ion
Personal (exp)
Personal (info)
Impersonal (info)
Individual Mass
Mass Targeted Conventional
Mass Targeted Online
E.g. Annual Reports, Analyst Briefings, IR Roadshows, IR Website
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The Right Tools for the Job
Reach of Communication
Qua
lity/
Inte
nsity
of
Com
mun
icat
ion
Personal (exp)
Personal (info)
Impersonal (info)
Individual Mass
Individual Targeted Conventional
Individual Targeted Online
Contests
One-on-One
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The Right Tools for the Job
Reach of Communication
Qua
lity/
Inte
nsity
of
Com
mun
icat
ion
Personal (exp)
Personal (info)
Impersonal (info)
Individual Mass
Experiential Marketing
Geo-Marketing (LBS)
Experiential Marketing: Example
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Experiential Marketing: Example
• Opened first café in midtown New York. • It serves coffee in a pleasing environment,
– comfortable lounge – read the financial newspapers– watch on plasma screens– FREE Internet
• Customers can’t perform financial transactions in the Café. – > $200 million new accounts and mortgages < 1 year
• Starbucks-like prices for coffee, tea, biscotti, and other pastries.
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Location-based example
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Geo-Marketing example: O2, Starbucks, L’Oreal
• Six-month trial • Placecast’s geo-
fencing technology • 1,500 areas
offering deals.• Opt-in• Gender, age and
general interests. • Receive Special
deals
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Innovation Issues & Challenges for the Financial Industry
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Issues & Challenges for Innovation in Financial Sector
• Short-Term financial measures & expectations• Incremental innovation - highly commoditized industry• Heavily regulated - limiting what new products can be
offered, to who you are even allowed to communicate with
• Security - data leakage, PDPA • Protection and the management I.P. - especially due to
technology advancements• Non Financial Intermediaries (NFIs) (e.g. retailers,
telecom providers) providing financial services.
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Non Financial Intermediaries (NFIs) example
Peer-to-Peer Lending
Zopa (http://uk.zopa.com/ZopaWeb/) 1. eliminating traditional
financial institutions for obtaining credit.
2. Target: self-employed, project-based or freelance workers that are not in a full time employment with irregular incomes and lifestyles
3. Can borrow smaller amounts over shorter periods and are not charged additional fees if they repay early
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Non Financial Intermediaries (NFIs) example
Peer-to-Peer Lending
Lending Club (http://www.lendingclub.com/)
• Cheaper and faster than traditional consumer credit (7.88% vs. 13%)
• Proprietary assessment of customer reputations within their social networks
• Tracking and publishing the history of every Loan
• Publishes the formula risk and interest algorithm
• Default rate is low 2.7 % (vs. 5.5 % for prime credit cards)
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Peer-to-Peer Lending Business Model
Revenue model
Cost model
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Potential Tools for Innovation in the Financial Services sector
• Social Networks - new financial services, increase interaction with customer, collect new ideas from outside
• Dedicated “Innovation Department” or “R&D Department”• Think broadly about what their target customers are
trying to get done• New technologies – Mobile, Social, Cloud, GeoMarketing
etc.• Under-served Markets, New Segments on Value-Chain,
Micro Niche segments• Academia partnership• Corporate venture capital fund
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Future of Financial Services Sector
• Just take an image of the front and back of the check. • No annoying deposit slip required• Immediate confirmation of deposit transaction.• It’s Free
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• Just slide the Money Bar to transfer funds between accounts.
Future of Financial Services Sector
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• Competitive processing fees and NO monthly rental
• Both the app and the reader are free
• Send email or SMS receipts to the customer
• Photo identification system for security
Future of Financial Services Sector
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End Notes
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Which Company?
American Customer Satisfaction Index (ACSI) • 64 out of100-point scale: lower than IRS (Tax)• 2nd last among 30 companies surveyed• Lowest 5% among 223 companies surveyed• Bottom 5% of all measured private sector
companies
• 500 million customers2010 American Customer Satisfaction Index (ACSI)
E-Business Report
103
Which Company?
American Customer Satisfaction Index (ACSI) • 64 out of100-point scale: lower than IRS (Tax)• 2nd last among 30 companies surveyed• Lowest 5% among 223 companies surveyed• Bottom 5% of all measured private sector
companies
• 500 million customers
2010 American Customer Satisfaction Index (ACSI) E-Business Report
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Popularly Unpopular
Popularity
≠
Affection
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Biggest Issue in Financial Product Innovation?
106
“With great power comes great responsibility”
Uncle Ben, Spiderman 3
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What is the purpose of Marketing & Branding?
Ultimate Objective of Marketing: “Get more people, to buy more things, more frequently, at higher prices.”
Sergio Zyman
Thank You.
soft copy of slides: http://totallyunrelatedrandomanddebatable.
blogspot.com/
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