CHAPTER ONE
2.3 CLIENT INSIGHT THEORIES
2.3.3 Strategic decisions taken based on 'gut feel'
Itis the researcher's perception that strategic decisions within Sanlam are based on gut feel.
Further literature review undertaken on this showed that a research study "The Fact Gap:
The Disconnect Between Data and Decisions"conducted by Business Week Research Services and Business Obj ects was highly relevant to the researcher's concerns. It showed that more than half of the critical business decisions made in organizations are based on 'gut feel' and experience, rather than sound and verifiable information and 77 percent - indicated that they were aware of bad business decisions made within their organization because of insufficient information (http:lwww.businessobjects.comfactgap).
This "gut feel" perception in Sanlam will be tested in question 8a of the client insight questionnaire administered (Appendix 6).
2.3.4 Benchmarking Client Insight and Business Intelligence
With the exponential growth in client choice and markets more competitive than ever, the need for acting upon deep client insight has never been more important to high performance. They are also more receptive than ever to innovative products and services that improve their personal and professional lives.
Given the vortex of economic, client and competitive forces in which companies are caught today; it's absolutely vital for businesses to excel at developing, sustaining and growing their relationships with clients. In our experience, the route to superior long-term operating and financial performance begins and ends with understanding the individual needs of one's clients.
According to secondary data from the Brandvision Report, client satisfaction levels of Sanlam in comparison to its competitors is similarly to previous years, where Old Mutual clients are more satisfied with Old Mutual than what Sanlam clients are with Sanlam.
Both Sanlam and Old Mutual show downward trends in being associated with "known to understand its clients' financial needs". Metropolitan's current levels of association with this aspect are 4 percentage points lower compared to 2003. Liberty and Momentum are at similar levels compared to 2003 although Liberty's current levels are up on those of 2001.
This is proving to be a competitive advantage to Liberty especially in the affluent market (Brandvision RepOlt, 2004).
Building robust client relationship objectives should include reducing the cost of acquiring new clients, cross-selling and up-selling to existing customers, closing more sales, targeting more lucrative markets, and creating conditions to make those goals more obtainable and thus being able to achieve a competitive advantage. In order for Sanlam to become truly client-centric rather than just paying lip service to the notion may have to reengineer fundamental business processes and change prevailing attitudes altogether.
2.3.5. ClientAdvocacy
Client Advocacy strategy aims to build deeper relationships with clients by earning greater levels of trust and commitment. According to Chris Lawer, Founder, The OMC Group, it can be defined as "doing what is best for the client" even if this sometimes entails recommending a competitor's product. This may seem counter-intuitive yet the logic is
quite clear. By acting as the client's advocate in a market, a company has a greater chance of earning more trust, sustaining better relationships, creating positive word-of-mouth, reducing marketing costs, increasing brand value and achieving profit and growth (OMC Customer Advocacy Report, 2005). Client advocacy reflects a cultural shift towards an advanced and mature client orientation that requires the following:
• Achieve better alignment between their client relationship management, marketing and branding efforts and sometimes step outside the boundaries of the company's offer to consider the whole context in which client's use its products and services.
• Demand a focus on the experience and emotion of providing successful outcomes.
• Educating business partners to align with the advocacy strategy.
In doing so, the company is responding to their customer's demand for more proactive thought-leadership, increased knowledge transfer, tailored offerings, and consistent quality.
• Enabling choice transparency. This component of client advocacy concerns the transparency of the firm's offering and its willingness to do what is best for the client, even if the recommended solution is provided by the competition. Choice transparency, where the client is provided with even the competitors' prices can be achieved through either online tools such as price comparison services, choice boards and personal decision-making guides or simply through employee recommendations derived from their own or the company's knowledgebase (OMC Customer Advocacy Report, 2005).
In 2003, Forrester Research asked 6,000 US clients to assess the client advocacy of their financial providers. They discovered that the firms with the best advocacy scores strongly correlate with higher satisfaction, greater cross-sell potential and deeper client relationships.
To get into client advocacy game, firms must have high levels of product and servIce quality and brand trust, a highly embedded client-oriented culture, and their business partners must be aligned and aware of the strategy. Besides independent brokers, Sanlam has Independent Financial Advisers (IFA) who are financial advisers certified to sell competitors products. This is truly cl ient focused as IFAs provide services and products based on the needs of the clients rather than only what is available within Sanlam.
Marketing material produced has not yet evolved to a level where competitive product and price comparisons are made available to external clients.