Q: We’re one of those banks that have been failing in the marketing of bank services and life insurance. When we compare what we’re doing against those that are succeeding, we do not find anything that different. And so we’re stuck with the question: “Why do some banks succeed but many are failing in marketing bank services and life insurance?”
May we request for your diagnosis and marketing Rx please?
A: We have had two invitations from established commercial banks for an in-house seminar-workshop to address this issue. In answering your question, we cannot of course share their data but we can share with you our diagnosis and Marketing Rx. It’s up to you to assess how applicable they are in your particular circumstances.
To start with, we’re not as certain as you are in judging that “some banks succeed but many are failing.” Among the more established and large commercial banks, there hasn’t been any closing of their bank assurance division or group. In fact, we understand from our contacts that there continues to be more hiring of bank assurance executives and staff. Perhaps, it’s closer to reality to say that some have succeeded though many are less successful but still trying.
When you say that you’ve compared what you’re doing with what the more successful banks are doing, you might want to review that process and ask yourself: “Did we compare in specific terms? Did we compare in the specific terms of STP, i.e., segmenting, targeting and positioning? Did we compare in terms of product design, pricing, selling, advertising and promo?” If your comparison has been as comprehensive and as specific, it’s near impossible that you will still not find “anything that different.”
In the comprehensive and specific comparisons we’ve done, we have consistently found several important differences. Two of the most common of these are related to each other.
The first is product design and positioning. Consider the bank’s most popular and most staple bank products, namely, Casa (Checking Account and Savings Account). In terms of product design, these two bank products are like soft drinks, snacks, shampoo and other FMCG (fast-moving consumer goods). These are positioned against their target customers segments as recurring purchase items. In contrast, life insurance products are like real properties, beds, piano and other consumer durable goods. Their customers purchase them very infrequently if not once in their lifetime. They are “big-ticket items” and life insurance companies position life insurance products as a customer’s long-term investment.
One source of difficulty among banks who find it hard to gain immediate success in bank assurance marketing is their positioning of Casa and life insurance under a common marketing and selling setup and/or as a single brand. That’s like seeing Unilever positioning and selling its shampoo and bathroom fixtures (just supposing it carries them) in the same way and as a single brand. This is where you’ll find the second but related difference in the marketing of bank services and life insurance between the more successful and the less successful banks.
One reason why many banks market and position their Casa and life insurance as a single brand is in their practice of “cross-selling.” These banks have succeeded in marketing not only Casa but many other financial services to their depositors and clients. Life insurance is just one more such financial service.
Now, take the bank client’s perspective. Most bank customers especially those who already are holders of a life insurance policy have not bought nor do they want to buy more life insurance from the credit officer or teller of their banks. This remains true even when most of these banks say that it is not their credit officer or teller who sells the life insurance to a bank customer identified as needing more life insurance protection. They say they refer this bank customer to their bank assurance people or department.
So where do bank customers want to buy their additional life insurance protection? That’s the key and crucial marketing question. Those less successful banks should find out from their bank customers. Some services marketing books say that in the US, more and more customers are doing this and like to continue buying their life insurance protection over the Internet because they can readily make insurance premium comparisons. We’re not saying that there will not be bank customers who will not buy from their banks. But the reality that many are not doing so in those less successful banks is saying that it’s likely that this assumed life insurance purchasing pattern from most bank customers has yet to be accepted and established as a bank customer buying habit.
To summarize, here are our Marketing Rx’s:
1st. Do basic positioning and branding management of your Casa and other bank products vis-à-vis your life insurance products.
2nd. Organize your marketing and selling staff according to what life insurance as a product requires in contrast to the requirements of your current bank products.
3rd. Research into your bank customers’ life insurance buying practices and habits and align your marketing and selling setup accordingly.