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

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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.

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Not all industries display the same characteristics in this regard. The UK financial services industry has tended to be product-focused. Currently it produces and promotes thousands of products about which it informs potential customers through direct mail and other means. As a result, the public is regularly overwhelmed by a mass of messages - many complex, some obscure, and a few downright misleading. What many customers feel they most need in this 'noisy' market place for loans, insurance, private pensions etc. is clear, helpful information that enables them to understand and manage their financial affairs with judicious support and minimum 'hassle'.

In 2003, as a result of market research, Abbey (one of the industry's leading players) set about simplifying its offering to provide a range of easy to understand products and services. This initiative followed on from Abbey's attempt at diversification into other financial products and markets that had resulted in substantial financial losses for the company, then trading as Abbey National plc. In the face of this, the company decided to relaunch itself, freshen up its image, and return to concentrating on what it has traditionally done best: providing financial services for people. The most important change involved taking a new, critical look at this over-complex market with the objective of becoming the UK's leading personal financial services provider.

As part of this process, in September 2003 the company relaunched itself, including simplifying its trading name from Abbey National to Abbey. Research highlighted when people talk about Abbey, they refer to them as 'Abbey.' It also signaled a change. Today, Abbey has 18 million customers, employs 27,000 staff and has an annual turnover of £3.5 billion.

Abbey | Customer-led innovation in a competitive market