Companies are finding it more difficult to demonstrate product superiority or product differentiation over competitors. Customer service is an area that offers almost endless opportunities for developing superiority and differentiation. The ideal relationship is one where the customer feels that he or she is receiving the desired quality and customer care.
Customers know what they mean by desired quality, and the marketer needs to find this out and translate the concept into the required goods and services. Desired quality does not necessarily mean the most expensive - it means the solution that best meets a customer’s need.
This case study therefore provides an excellent example of how an organisation can develop a personal relationship with customers by focusing on their individual needs and then providing them with the ‘benefits’ that they are seeking. The study focuses on the way in which Independent Insurance has set out to create a unique relationship with the brokers who sell its insurance policies to private and commercial customers.
Independent Insurance provides general insurance and related services. The group operates principally in the UK, with a wholly owned subsidiary in France and operations in Spain, Malta and the Bahamas.
Independent Insurance provides commercial property and liability, together with non-standard or specialist personal lines cover. It believes in long-term business relationships with a relatively small panel of highly professional insurance intermediaries (brokers). The business focus is on maintaining sound underwriting principles and differentiation through technical risk management.
Independent Insurance only sells via the medium of brokers. No business is conducted directly with the public. It is estimated that in the UK there are 10,000 insurance brokers. Independent Insurance works with about 10% of these, i.e. 1,000 brokers. The Absolute. Tour involved one-to-one discussions with 200 of Independent Insurance’s top brokers, as measured by performance indicators related to success in winning insurance business.
The American writers Don Peppers and Martha Rogers, in their book, The One Future: Building One Customer at a Time, have urged businesses to form impregnable relationships with individual customers. They provide a range of examples of ways in which even mass marketers can strike up these relationships. This involves gathering as much information as possible about individual customers and then developing the organisation to meet individual needs. They refer to this as customer segmentation.
The brokers are the customers of Independent Insurance and building a relationship with them involves finding out and then meeting their needs and requirements. In particular this case focuses on the Absolute. Tour - a dynamic marketing tool.
This involved the senior management team getting out on the road in a campaign that used state-of-the-art technology coupled with the highest levels of comfort and customer care, using luxury coaches, as a vehicle for face-to-face meetings with brokers.
Insurance is a ‘people business’ - it is based on face-to-face contacts. The Absolute. Tour involved visiting major brokers and making them feel cared for and pampered. Independent has always been a marketing-led company and attributes its rapid growth during the 1990s to its willingness to invest heavily in innovative, professional campaigns and initiatives.
Independent Insurance recognises that the way to build on success is through maintaining unique relationships with its clients the brokers, so that brokers feel valued and possess a joint sense of responsibility for the success of Independent Insurance.
Independent Insurance has therefore set out to create a partnership with brokers by listening carefully to what they have to say, their beliefs and values, and what their goals are on an individual basis. Armed with this understanding, Independent Insurance is best placed to create a tailor-made approach to support the efforts of each broker. Independent Insurance also seeks to ensure that brokers have a clear understanding of any new products that are being introduced so that the brokers and the company can jointly pool their efforts to ensure that these products are a success.
The Absolute. Tour is not the first time that Independent has taken to the roads to meet directly with its brokers. At the end of the 1980s it engaged in a similar tour - but in a very low-tech way. During the mid-1990s it had followed this up by regular invitations to brokers to meet Independent Insurance managers in hotel and country house locations. This approach was frequently copied by rival companies, so that there was no clear point of differentiation.
As the leading player in the field, Independent Insurance wanted to create an experience for its brokers that was unique and memorable. The solution was to come up with a ‘futuristic tour’ which showed Independent Insurance to be at the leading edge – a post-millennium company at the end of the 20th century.
When Martin Peters played for England in the World Cup winning side of 1966, commentators stated that as a footballer he was ten years ahead of his time. In a similar way Independent Insurance sees itself as an organisation which is ahead of the field - a company which has seen the shape of the future, and has embraced the future today.
The Absolute. Tour cost £2 million and involved hundreds of people and months of preparation. As a feat of logistics, it was a huge undertaking. As a demonstration of Independent Insurance’s commitment to the broker market, it was a fabulous success. The 1999 Absolute. Tour, which saw a fleet of five executive coaches criss-cross the country visiting 191 brokers in five weeks, proved to be Independent’s most successful exercise yet in terms of strengthening the organisation’s position at the forefront of the market.
The coaches were fitted to Independent Insurance’s specifications so that they could pick up the broker’s team at the office and drive to a scenic location for a meal, with meetings taking place after meals. Independent Insurance hosted breakfast, lunch and dinner, often all three in one day, which made it possible to cram several meetings in per day.
The coaches themselves redefined luxury and practicality. As well as a downstairs lounge, the upper deck provided a boardroom area where presentations (tailored to the individual broker) could be made and where discussions could take place. The hospitality was of the highest standard, with brokers enjoying superb cuisine. The aim was to provide brokers with an experience that they would remember for the rest of their lives and associate with Independent Insurance.
As well as talking about new products, the Absolute. roadshow allowed Independent Insurance to pursue a wish list concept. This means it drew up a joint business plan with each broker to win a major, live piece of business which they had told Independent Insurance about beforehand. In other words, the brokers might have had their eye on winning insurance business with a major ‘dream’ company or other client in their locality for some time. Working with experts from Independent Insurance they were then able to collaborate and develop a plan of action to turn the dream into a reality.
This initiative was particularly well received and, since the Tour, Independent Insurance has already seen brokers win business with a good number of these clients. The emphasis was on working together to help grow business, the more business Independent Insurance generated for the brokers, the more it helped itself. It is this sort of approach which lies at the heart of relationship marketing.
Independent Insurance and its brokers worked together as a team using face-to-face meetings in which the brokers were able to clarify their needs and requirements. Independent Insurance was then able to identify the benefits which enabled these needs and requirements to be met. Through such a partnership the brokers feel valued, and thus their loyalty to Independent Insurance increases exponentially. This has underpinned the ongoing success of Independent Insurance.
- Wish-list initiative: Prior to the Tour, Independent asked each broker to identify a ‘dream’ target commercial client in advance of the meeting on the coach. Significant research was then carried out to formulate a precise marketing strategy which would arm the broker with the best material to win that client’s business.
- Documentation: On the coach, each broker was provided with a comprehensive ‘Absolute.’ guide outlining The Independent Difference, the product range, the exclusive benefits and a contact list.
- Public Relations (PR): Over 500 local press releases were issued during the Tour and its progress was monitored on a special website. A trade press briefing was also held on one of the coaches in order to give journalists the opportunity to get firsthand experience of the atmosphere.
- Post-event follow-up: Independent’s attitude to marketing is that the job is never completed; it is an ongoing, organic process to which the whole company must be fully committed. Thus a great deal of effort went into assessing the impact of the Absolute. Tour.
Independent Insurance is looking forward to a future based on continuing growth. Independent Insurance knows that by winning the loyalty of its customers - the brokers - it is best placed to win a prominent position in a service industry which depends on relationship marketing - one-to-one personal relationships with customers.