GRAB THAT WALLET

Chapter 1

Financial products are different from physical products• The prospect must qualify for the product.• Involves sustained and periodic contact with producer.• One mistake of service provider turns to a negative impact on

customer.• They are not product but processes designed to deliver an

outcome.• Handling customer is more important than the failure.• Sustained focus for long term customer satisfaction.• Conflict of interest between the companies and consumers.• Acquiring the label and brand image of an institution.

Chapter 2

• The central theme of marketing is to create the sense of value and possibly isolate that sense from the price paid.

• Porter’s model gives four ways to approach the marketplace and create a sustainable position for the business.

• Cost Leadership ─ quoting lower rates• Cost Focus ─ focus on small segment led by cost as a

competing factor.• Differentiation ─ occupies a distinct mental position in terms

of value perceived / offered.• Process-based differentiators provide distinct competitive

advantage.

Chapter 3Issues arising from nature of the industry• Conflict of interest with their customer• Ownership involves continuous or periodic interface with company• Failure product can be catastrophic for customer• Long product usageProblems in developing strategy• Highly quantifiable and measurable• Hard to visualize and protect• Innovation is easily copied• To qualify the prospect as eligible for a productBusiness outcomes• Frontline staffs and customer service has to bear burnt of customers• Sales process is complex• Burn out sales and service staff make any company look bad

Needs of portfolio matrix

Encounter quadrant (Q1) ─ Felt need for single product

Know quadrant(Q2) ─ Latent need for single product

Grow quadrant(Q3) ─ Felt need for portfolio products

Value quadrant(Q4) ─ Latent need for portfolio products

Chapter 4• The segmentation in financial market is based on the stage of

life in which the customer is.• Gathering ─ Early stage of life when needs are basic including

risk protection.• Preserving ─ Middle stage when one needs preserve what one

has earned.• Enhancing ─ Growing the money one has enhanced.• Harvesting ─ It involves earning a decent return on

accumulated savings that can take care of retirement years.• Felt needs ─ a need which a consumer knows he has.• Latent needs ─ a customer which a consumer has but does

not know.

Consumer Responses Mapped to Needs and Stages of Life

Felt need Latent need

Early stage Later stage Early stage Later stage

Basic requirement

Search and find

Bargain hunt Quickly become a felt need ; customer copies product use from peer or introducer of product

Sophisticated requirement

aspirational evolve May demonstrate urgency in filling

Chapter 5• Trustworthiness of a financial company is a hygiene factor.• The representative of the company is the face of the

company.• Greater the personal selling results in greater profit.• The concept of trust chain is similar to concept to value chain.• Building of trust chain is a delicate process.• Trust building becomes organisational and organisation

becomes an institution.

I will use one of your services

I will use more of your services

If I shift everything to

you

Take me where you

think I should be

… and test you… and see if

you retain my trust

My trust has grown show me I am right

You are the right provider

for me

Chapter 6

• Silo based organisation is where the concentration is on the product; single product is promoted across the market.

• Relationship based organizations concentrate customer by customer; multiple products are promoted to the customer.

Chapter 7

• The products can be easily compared with competitors. So higher vulnerability.

• The management respond with discounted prices or freebies.• Low pricing power• Low profitability• Low customer loyalty• High attrition potential

Chapter 8• The goal in this quadrant is to get the customer to use a second

product which fills a latent need.• Two distinct approaches:

1. Either your salesperson uncovers the latent need.2. Your strategy involves a pre-planned second product which is aimed

to be sold after the first sale in Q1.

• A salesperson calls with a meaningful uncovering of latent needs changes the image of the company.

• Comparability comes down.• The pricing power increases.• Improves the image of the company.• The attrition comes down.• Increases in sales numbers results in increase in profitability.

Issues in harnessing the Know Quadrant• Need to think how they will bridge from first to second

product.• Need to equip their front-end adequately in uncovering of the

latent needs.• A latent need once uncovered no longer remains latent.• There is no assurance that the customer will fill the latent

need at a later date with the same company.

Chapter 9

• The customer has felt needs for multiple products.• The companies with product portfolio which are able

1. To connect their set of products for logical use with one another.

2. To obtain a single view of their customers.• Lack of strategic awareness is the major problem.• The customer shift from Q1─Q3 because the customer find us

to be cost leaders.• The customer shift from Q2─Q3 because the customer find that

we can think for him, about him.• It is an opportunity to earn trust in the form of taking up

thankless tasks.

• The comparability comes down a good bit if multiple needs are met with a clutch of products.

• The pricing power improves.• Interlinked usage of products increases convenience.• Less easy to shift the business to another producer due to

linkage and convenience.• The cost and time of shift are high.• The first win is to avoid getting into a series of questions for

each products.• The second win is to establish the portfolio benefits from

consolidating the usage of products into one producer.

Chapter 10• The customer is happy to buy everything from this company.• The company provides portfolio of products which are

logically set and have single view of customer.• Product Design ─ producer must find a fit in one of the logical

set in the portfolio available already.• Product Launch ─ many products are delivered and producer

would like to charge premium.• The gap in offering can become a entry quadrant for

competitor.• This quadrant offers impressive advantages.• Tries to ensure that points of comparison do not arise.• Pricing power increases since the customer perception of

value increases.

• It is too inconvenient to buy a product from elsewhere, hence attrition rate is low.

• Hunter group work in product silos by operate vertically chasing one customer after another.

• Harvester group work for the process of customer value management by selling one product more.

• This quadrant has to be in a relationship mode for relationship-based and hybrid organisation.

• The problems are spoilt of available database and the wear and tear of front end tele-callers and salespersons.

Chapter 11• Migration of quadrants from Q1-Q2-Q3-Q4, Q1-Q3, Q1-Q4

and Q2-Q4.• Shifts in the Need axis involves the organisation know its

product set and how to fit in customer’s scheme of things, education of all customer touch points, create different sales group for each quadrant.

• Shift on the Portfolio axis involves the consolidation of process, enablement of technology and CRM.

Chapter 12• Need to build a long-term sustainable portfolio.• Strategy free results in short term but do not tie in to longer

term goals.• An institution is an organisation that involves in pursuit of its

mission.• A mission is never done; it is a lifetime’s work.• Goals drive the mission. • Targets are breakdown into goals.• All these have to be aligned.