Customer value proposition (CVP)

As part of our involvement within the Financial Services sector, we were recently asked exactly where credit unions fit in today's banking and financial services markets? What's their role, how are they different? It was suggested that financial services players are becoming ever more sophisticated in the way they  communicate their offering and identity to the public and that competition is more intense than ever. We also discussed the broad frustration levels with "the big 4" and why this frustration didn't translate to more consumers engaging with more community and not for profit based businesses like Credit Unions. We were also asked why, given their heritage and relative scale they didn't command a stronger presence and relevance across the community?

Traditionally most credit unions have underpinned their proposition around being for their community and for their members. They may never have received exclusive patronage by their members, but we wondered why their traditional value proposition drivers such as lower cost, personal service, member focus  and community contribution did not have the same relevance as they once did.

We believe there are a number of key challenges facing credit unions

Market Uncertainty

Credit unions are seen or perceived as less safe than traditional banks and institutions (this despite their regulation by APRA). Their perceived individual size didn’t sum to a re-assuring stature that had people believe they were as secure as the big banks. The GFC and weakening share markets are associated factors; giving rise to motivations for depositors around preservation of funds above all else.

Increased Competition

New competitors, including mutual and community banks have also entered the picture. More traditional competitors (eg Ubank, Rabo, ING Direct) are competing fiercely for deposits. Additionally the governments’ guaranteed preservation of those significant deposits with the Big 4 is encouraging all depositors that the only truly safe home for deposits is the Big 4. Clearly this isn’t helping.


The benefits of membership have become blurred and post GFC there is significant consolidation and confusion in the entire sector. A number of credit unions made some poor investment decisions during the GFC, as they sought higher returns on members deposits. Post the GFC many of these have been severely impacted resulting in a large numbers of mergers to ensure survival. Word of mouth in these situations spreads like wildfire, fueling concerns related to the risk of placing deposits with credit unions.

Changing Consumer Drivers

Consumer choice drivers are rapidly changing and credit unions are sometimes struggling to respond. Examples here include perceptions around absolute security of deposits (mentioned above), competitive products, competitive pricing, flexibility given their limited locations and best in class internet transacting – compared to the banks.

So what can credit unions do?

The picture isn't entirely bleak. They have a good story to tell - around safety, security and regulation, personalized focus around servicing members,  as opposed to being focused on profiteering and shareholder returns. But they need more in a positioning sense. They need to raise their profile as an industry as well and strongly push their defining characteristics. As part of  Abacus (Australian Mutuals is the industry body for the Australian mutual financial services sector, a strong alliance of 8 mutual building societies, 94 credit unions, 2 mutual banks and 15 friendly societies), they would benefit from collectively building a stronger united voice. The Superannuation Industry Funds are a classic example here. They have successfully stopped their infighting, got on the same page, and promoted themselves and the investor benefits of their proposition very well. And they've done it in a way that positions them quite distinctively, with a focus on how their members clearly benefit. In short, pointed the guns outwards in a very unified and effective way at the common enemy - the (for profit) managed funds industry.

So the Credit Union industry needs to establish greater credibility by being clearer on their collective proposition and brand. They need to move beyond the "we're for members, not profit" positioning and expand and dimensionalise their offer beyond that. Why? Because it simply isn't compelling enough to have consumers move beyond their inertia which has them remain with the big 4. In short moving consumers to a point where you don't just change my attitude, but rather my behavior. They need to get on the front foot and understand the needs, wants, requirements, and expectations of their desired clients and distil a positioning that is relevant to their target audience (which needs more clearly defining); that is credible and build from their key strengths; is sustainable and future proof (as we want to layer and build upon it over time) and differentiating relative to the big four banks as well as other mutuals.

In summary, credit unions will need to establish and prove how they are relevant in today's consumerist world. A well defined point of differentiation - going back to their roots, finding the stories from the past that resonate loudly today, and connecting that to current needs and trends could establish a strong and unique positioning and identity that re-establishes their relevancy (with a younger generation) and ensures they are around for years to come.


Friday, 25 September 2009 23:28

How does a business approach its marketing needs in times of a global financial crisis? The literal definition of crisis is 'a turning point.' Let's consider this crisis as the turning point for thinking differently about Marketing and Business Development.

"In the fast moving and developing world around us, it is not what you know that will define you in the future, but rather how good you are at relearning what you think you already know."

Over the first five months of this year we have been asking business leader what are the key principles to remaining in business. Interestingly, the replies were consistent under three headings. The business leaders interviewed said that these were fundamental to ensure that the whole business stayed focused on the right things.

As one CEO expressed it, "At any time a CEO has hundreds of issues that need dealing with. It is important that you know the three to five that are your priority and do not allow yourself to be side tracked from those."

Communicate, communicate, communicate
At a time when there is a lot going on and people are unsure about what is happening and how it may affect them, it is vital to communicate. The leader needs to be visible because people want to see their leader as well as hear the message. People get a level of comfort from seeing the leader and pick up on the subliminal messages. For example, if the leader seems relaxed, it relaxes them. If the leader seems confident, people feed off that confidence.

Communication needs to be two-way because people more questioning. Listening is important because it creates the dialogue, which in turn engages people. An important part of the communication is the content which must include the strategy or plan of action. Knowing the direction that is being taken makes people feel that there is some leadership taking control of the situation and there is something worth committing to.

• Be visible and communicate frequently
• Ensure two-way communication
• Clearly communicate strategies and actions to employees to ensure higher morale
• Continue to inspire the entire organisation to succeed

Redefine Value
At a time of economic downturn, the customer has a good reason to assess what they spend and where they spend it. Customers actively seek alternatives and so the focus needs to be on providing the best value possible. Anything that creates a connection with the customer and shows that they are getting value for money, is vital.

A company needs to believe in itself and what it offers. Any sign of low confidence will impact the value on offer. The enthusiasm and belief in what the company is providing has a direct link to the value being offered. This is a significant shift in terminology from giving "customer service" to "creating value".

Key Points:
• Don’t cut corners on customer service during tough time
• Create value and make a difference
• Every employee starting with the CEO, must step up and be an advocate of the value the company offers
• Collaborate through the company, be nibble and innovate

Objectivity and Discipline
Every single person interviewed took a fresh and objective look at their business and what they were doing. They spoke about getting back to core business and being dispassionate about what fitted in the business and what didn't. Where should time, energy and money be focused? They spoke of stripping out pet projects that were distracting and using up resources better spent else where.

Obviously cost were important, but interestingly, although cash was seen as important, they saw the importance of still spending but spending wisely. "Discipline" was a word used on a number of occasions.

• Offer high value solutions while keeping a steady and disciplined handle on expenses
• Conduct a dispassionate review of the business
• Take strong defensive positions, preserve lots of cash and continue investing in R&D for the core business
• Look at the job with fresh eyes

What about the future?
A notable difference between this and previous recessions is the focus on spending money through the recession on R & D. Many saw the recession as an opportunity to retrain staff and refurbish the business. Money spent in these areas was seen as fundamental to the business being able to perform when the recession is over.

Although some providers of training and development programs have seen a down turn in their business, many have seen a surge as well. The difference seems to be in the ability of these providers to deliver results and not programs.

A recession or economic crisis has an evolutionary effect on business. Businesses emerge differently with new demands and expectations. We do not know for sure what it will be like when it is all over, but we do see certain signs emerging. The key word will be 'value' and the key action will be "measure".

"Companies that outperform the market are companies that invest, understand and capitalise in a downturn."
Ronan Harris
Director online sales
Google European Operations


Friday, 14 August 2009 23:28

Telstra eBusiness Services is the insurance industry's leading provider of integrated e-business solutions. Their e-business products provide a vertical platform of innovative, powerful and award winning solutions to our insurer, intermediary and broking system partners.


Telstra eBusiness had grown through a process of mergers and acquisitions that had resulted in confusion internally about how to position, organise and "go to market" with its company's brands, products and services. This had also led to confusion externally to the extent that one product name appeared to have more recognition and equity than the actual business name. There was also a requirement for a series of new product brands to be created to reflect a series of exciting new product entries and to reflect these as part of an entirely revised brand architecture.


Desk research was conducted to ascertain the current position and a research brief scoped to determine current knowledge gaps and to assist in confirming the current position. Depth interviews were then conducted internally to gather information and engage the internal stakeholders who had been through a number of prior ownership changes. Qualitative research was then conducted with the insurance industry and quantitative research conducted with the insurance and broker distribution channels. Subsequent findings and presentations made recommendations on brand architecture, positioning and product naming. Logo and a visual identity system was then created aligned to the Telstra (parent) brand, yet still presenting a unique but connected relationship within the Telstra eBusiness product portfolio.


A deep assessment of the environment delivered an informed understanding of the market, competitors and current perceptions of the Telstra eBusiness product portfolio. This understanding informed strategic development of both the existing and proposed portfolio. A revised brand architecture and strategy for managing corporate and product brands was also provided, which allowed for and reflected future business expansion and product development. The entire portfolio was then managed, launched and implemented via a concise identity system, with accompanying brand guidelines.


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