Customer-led innovation in a competitive market
An Abbey case study

Page 0: Introduction

Successful businesses discover what customers want, research and anticipate their changing needs and requirements, and then tailor products and services to suit: they are customer-led. Less successful businesses tend to create products based on what they believe themselves to be good at, and then set about persuading customers to buy them: they are predominantly product-led. Not all industries...
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Page 1: A competitive market

The UK financial services sector has become increasingly competitive as a result of several changes. Successive UK governments have looked to encourage competition in financial services so as to give customers a better deal. An important development in this area was the so-called Big Bang in 1986. This opened up competition between firms on the London Stock Exchange, and also developed competition...
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Page 2: Scanning the environment

Successful organisations understand their environment and provide products and services that reflect changes within it. One important part of environmental scanning is a SWOT analysis. A SWOT analysis carried out by Abbey revealed the following:
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Page 3: Research

Market research involves identifying what customers want and then meeting their requirements. An important part of this is to anticipate customers' requirements and be ahead of the competition. Often this involves a hunch or theory that managers will test through research.Abbey was aware of the high levels of misunderstanding among financial services customers and was determined to provide...
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Page 4: Communicating with customers

Good communication involves transmitting clear messages, as is demonstrated by the interaction between Abbey and its customers. Abbey uses a range of methods to communicate with its customers, including:Letters to all customers written in a simple, intelligible language. Prior to its relaunch, Abbey used 2000 different types of standard letters to customers. These have been simplified and...
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Page 5: Communicating with the internal audience

In service organisations such as Abbey, employees are the most important organisational resource. In financial services a high proportion of employees are regularly involved in face-to-face and other forms of direct communications with customers (e.g. in call centres). So it was vital that all employees fully understood Abbey's new approach.Because Abbey is a large organisation made up of...
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Page 6: Conclusion

Abbey has set out to transform banking practice by adopting a customer-led approach rather than a product-led approach. It has produced a statement of intent designed to make itself the best provider of customer focused financial services in the market.A key part of Abbey's strategy is to continue to research and develop new tangible products and services, which actively demonstrate its commitment...
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Related: Hewden
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