How can we nudge the intermediation sales model to make it more effective in today’s retail-focused environment? Intermediation is B2B2C: a channel linking consumers to products offered by suppliers. The next step is to make it more like retail – or B2C – where the focus is on the buying experience.
In retail, the roles of those in the value chain are clear. The retailer is responsible for selecting the product range, the sales experience, store footfall and the after-care. The supplier is responsible for research and development, production, promotion and stock.
In protection, these lines are blurred. The intermediary (retailer) does not control the end-to-end buying process and the provider (manufacturer) does more than produce the goods for sale, as each one imposes their own sales process, including the application questions, the final terms and the payment. So, what would an effective retail model look like?
- A customer-centric proposition: Retail is about designing the customer experience with the end in mind. Retailers control the entire journey and continuously improve it. This is a significant step away from today, where an intermediary must fuse disparate processes together to deliver the same outcome
- A rewarding shopping experience: Successful retail businesses ensure customers leave the store with the goods they want, valuing the experience and willing to recommend to others. For the retailer, the focus is on buy; for the intermediary, it is on apply. The retailer will have one checkout, regardless of the number of products, and the displayed price is the paid price
- A seamless online and offline experience: Customers want to be able to switch between the two and get the same quality. Retail delivers in this respect and provides support across the spectrum. In comparison, intermediaries lose sight of customers when they click on the provider’s site and must then wait for the provider to feedback on outcome
- Valued customers: In retail, there is no debate about who owns the customer. Businesses will transform transactions into loyal customers, with engagement plans that include targeted information, prompts and promotions. For the intermediary, this is less clear, as some communications (e.g. annual statements and missed premiums) remain with the provider
- Data driven decisions: Retail is detail. This is about collecting granular data and analytics. Such data on the customer experience includes the delays, the drop-outs, the purchases and the missed opportunities. Analytics drives continuous improvement. For an intermediary, the data is separated between them and the providers, and does not give the full picture. Without control over the customer journey, it is more difficult to make change
- Brand loyalty: To enhance customer loyalty and differentiate propositions, retailers offer own-label products and exclusive deals. These are invariably available alongside other products. Given the retailer’s deep understanding of their customer, their own label products or deals should hit a sweet spot.
My vision is to deliver a powerful retail protection market. Identifying the hurdles is half the solution. This about a mind-set change – but a small one. After all, we are a nation of shopkeepers.
Martin Werth is chief executive of UnderwriteMe