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Impact of the Royal Commission on insurance brands and reputation

 

 

 

 

The name says it all. 

The revelations of the Royal Commission into Misconduct in the Banking, Superannuation and Financial Services Industry have had a negative impact on perceptions of the entire financial services sector. The insurance industry is no exception, with brands experiencing reputational damage regardless of having acted improperly or not. 

At a time when Australians are dealing with the fallout from unprecedented bushfires and drought, and are coming to terms with the ‘new normal’ of our environment, the role of the insurance sector has never been more important. It is vital that trust in the sector be regained as quickly as possible so the community can better manage the risks we face today.

While firms in the insurance space are all tarred with the same brush to some degree, the Royal Commission presents a unique opportunity for your brand to differentiate and engage more deeply with customers and prospects.

What’s the impact?

In addition to the industry-wide action required to redress this negative perception, the key questions individual organisations need to ask are: Will it affect our revenue (short and long term), and what can we do about it?

Ultimately, you need to determine:

  • Is the impact so significant that consumers will reduce, cancel or no longer buy insurance products?
  • How long might this negative purchasing attitude last? (Could you ‘ride it out’?)
  • How loyal are your customers? (Will your service quality and product differentiation overcome any backlash? Or do you have a transactional relationship and customers will look elsewhere?)
  • Are you all in the same perception boat – or are some brokers or underwriters perceived to be more reputable, and may therefore benefit at your expense?

What can you do about it?

The significant backlash from the Royal Commission will take more than a photo shoot and new tag line to overcome. When faced with brand and reputational damage like this, you have two broad options:

  1. Ignore it. Large firms playing the long game may be able to get away with ‘business as usual’ until the dust settles. They’re more likely to have the kind of brand equity and resources to withstand a sustained period of reduced revenue, and ‘relaunch’ their brand once the backlash has died down. 
  2. Address it. While you don’t want to dwell on the negatives from the Royal Commission, the fact is the insurance sector is facing heightened scrutiny, and there’s every chance it will be top-of-mind for customers. So it’s best to address the elephant in the room: yes, the insurance sector has behaved below expected standards. Addressing the issue, and agreeing the industry needs to improve, opens the door to differentiation. Detail how you’ve embraced the opportunity to review all aspects of your operation in order to deliver fairer and better products and services to consumers. 

Tools to help you own it

You have an opportunity to change the conversation and differentiate your brand by sharing with customers the meaningful changes you’ve made. Ultimately, these changes – backed up by communications – are about rebuilding trust. Here are just a few examples of how this might look:

Customer experience. When your reputation is in question, actions speak louder than words. The changes you make to your customer processes over the next 24 months are critical. The focus needs to be on the impacts and benefits for customers: how they will be better protected and better placed as a result of these changes. 

Customer communications. Diffuse any potential backlash to your messages by acknowledging the issues the sector is facing, then shift the conversation to the positives: the changes you have made to address these issues, and the benefits of these changes for customers. 

  • Letter to customers. This is a great way for your organisation’s leadership to formally address the issue, and detail the changes you have made to processes and procedures as a result (with a focus on the impact for the customer).
  • Blog/vlog. Consider an ongoing blog or vlog (video blog) as a ‘behind the scenes’ glimpse into how you are tackling the many layers of this issue, and your multiple responses. A video series in particular will showcase your human side by allowing the personality of your team to come through. Where possible, provide real customer examples (case studies) to illustrate the benefits of the changes you have made.
  • Home page video. Nothing says ‘we take this seriously’ like a leader acknowledging an issue front-and-centre, and stating the changes you have made to avoid any recurrence.

If there’s anything to be learned from previous episodes of reputational damage – ranging from catastrophic man-made disasters (the global financial crisis) to less devastating but just-as-absorbing scandals (such as cricket’s ‘Sandpapergate’) – it’s that in most cases, reputational repair is possible.

Australians are a pretty forgiving lot; provided you show you have been listening to the concerns of the community, and most importantly that you have taken positive and meaningful action to avoid a repeat, you will be welcomed back with open arms in time. 

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Market influences: keep your brand ahead of competitors

 

 

 

 

There are many market factors that can impact your brand. Staying ahead of the game is key to ensuring that your brand can adapt in the face of external threats and market changes. 

Some key influences for SMEs to watch out for are:

  • legal and regulatory changes
  • industry transformation; and 
  • changing customer needs.

Legal and regulatory change

In recent years, industries such as banking, aged care and mental health have been impacted by Royal or Productivity Commissions. These often indicate industry-wide reputational issues where public sentiment plays out in the media in a negative and damaging way. In addition, these Commissions can also lead to legal and regulatory changes. 

If you’re in an industry under review, it will be important to protect your reputation. You may need to rely on existing brand goodwill or undertake specific marketing to promote your brand and stand apart credibly from competitors. 

Exploring how your business differentiates itself in response to market sentiment is a wise move. Also, understanding how customer needs and expectations are changing and determining how your brand, products or services and customer experience can quickly evolve to meet these, is key. 

Industry transformation

Industries tend to go through transformation at the same time, as businesses within a sector experience the same external threats – economic, customer, legal or technology change. As a result, most of your competitors will have the same conversations about what to invest in and how to adapt in the face of these drivers. 

Being ahead of the game and keeping up with emerging trends can help you identify opportunities or risks to your brand and adapt before your competitors do. 

What could be the impact if you don’t act first or are seen to be falling behind? Competitor brands can stand out, better meet customer expectations and continue to build a positive reputation, which could result in a loss of customers for your business.

The changing customer 

Not keeping up-to-date with customers’ changing needs means you are at risk of losing customers that have taken a long time to acquire.  

All brand needs to adapt in line with customers’ needs in order to stay relevant over the long-term. According to Brandshare, more than 50 percent of customers are disappointed with the way brands respond to their needs and only 10 percent of customers believe that brands understand and respond well to their needs.

A brand doesn’t have to be all things to all people. However, by understanding cultural, geographical or other nuances, and how customers’ feel about your brand, it’s more likely you will build a product/service and customer experiences that can evolve with changing expectations and help you retain your customers. 

Brands are assets that help deliver value to your business when they are managed well. They can also contribute to creating a sustainable competitive advantage. So, it’s worth having a strategy so your brand can evolve and adapt to market influences in a timely manner. Talk with us to see how we can help. 

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What is a brand?

 

 

 

 

Close your eyes and imagine the word ‘brand’. Perhaps hundreds of different logos begin to circle around in your mind and you imagine that the formula for a brand is: symbol + name = brand. Take the RSPCA for example.

 

 

But, the truth is, a brand is much more than just the logo and a name. It’s perception and a promise, and when used strategically, a very powerful business tool.

Brand is perception

A brand is not something you can physically hold or see, but the feelings and opinions that people hold about a company, product or service as a result of their interactions with that company. 

It is the perception of a company – how it is known, understood and considered. 

When people hear your company’s name, do they think ethical, trustworthy, successful? Or do they hear innovative, leading or something else? Most importantly, do they think and hear what you want them to?

Knowing what you want customers or other stakeholders to think about your brand is critical. It’s what informs your visual identity, marketing, and customer experiences to ensure they are effective in meeting a customer need. 

Brand is also a promise 

Reputation and what people think about you is a result of what they see and hear about your company, as well as their personal experiences. 

Through the brand you make an overt promise to stakeholders, which is why it’s essential that the products/services, as well as the experience, live up to that promise. If your promise is delivered, the brand is maintained or enhanced, but if the promise isn’t delivered, it can be damaged. 

Remember, it takes only one bad deed to ruin a good reputation. So when companies don’t deliver on their brand promise, whether as a result of a faulty product, poor service or experience, then customers start to look elsewhere to get their needs met. 

Brand is not a logo

Logos are one way to bring your brand to life. They are a visual representation or expression of your company. Logos and names are important, but far more important is knowing what your brand’s promise is and building a product/service and customer experience that delivers on this promise. 

Brands are assets that can help to deliver value to your business when they are managed. They can also contribute to creating a sustainable competitive advantage. So, it’s worth articulating your brand promise and knowing why, where, when and how your brand should and shouldn’t be used. This will help your company to attract and maintain the right customers. 

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When is brand important?

 

 

 

 

If you want to ensure that your brand adds value to your business, then exploring your brand strategy doesn’t just happen once. 

There are many points in the SME life cycle when it’s imperative to explore and review your brand strategy so you can continue to seize opportunities and survive market challenges. 

So, what are the key business life cycle moments to focus on brand?

Start-up/launch

This is the most obvious time to explore your brand and build a strategy, despite the fact that time and money are usually tight. Because of this, businesses don’t necessarily view their brands from a strategic viewpoint but rather a tactical one focused on identity. 

Investing some time and money upfront to be clear about what you want customers and stakeholders to think about you, and building this into your marketing and customer experience, will help you set up your brand and marketing activities efficiently and ensure you attract your target market.

New products/services

“Branding” a new product/service is vital, not only for launch, but to make it stand out, attract customers and have  longevity in the market. 

Part of doing this is identifying how your brands or products/services relate to each other and determining if something needs a name, logo or brand. Also, understanding what customers want and what “brand” they would be most likely to buy a product/service under. 

Products/services may need standalone brands, a brand extension, or only a name using the company brand. Considering  the ‘brand architecture’ and how the product/service is positioned among your range can contribute to the success of a new product/service.

Referrals

For service-based businesses, referrals are a good way to drive growth. Building a credible and trustworthy brand over time, as well as ensuring the right connections are aware of your brand, can help your business attract referrals and build new relationships. This doesn’t happen naturally but by knowing what your brand stands for and having a targeted approach to building your credibility and connections.

Acquisition

Growth through acquisition can be a smart play for building market share, however, it’s important to consider if the new business’ brand aligns with your existing brand or whether the brands compete. These factors will determine whether you keep both brands and influence your future marketing plans and costs. This strategic consideration may even impact the price you are willing to pay for the acquisition.

Exit strategy

As your start to build your business’ exit strategy, brand and reputation can play an important role. Prospective buyers want to see that the brand attracts target audiences, is aligned with customer experiences, and offers something competitor brands don’t. They may also want to know that your brand is not reliant on one person or the original owner. Ensuring your business has a brand strategy in place will help demonstrate that you’ve been building the brand as an asset that is worth acquiring. 

Don’t forget about it!

So, to build your brand into an asset don’t just set your brand look and feel and forget about it. Build a strategy and review and adapt it at key moments throughout your business’ life cycle. 

Healy Business Consulting provides a range of strategic brand and marketing services to make sure your brand and marketing operates efficiently and effectively.  

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“Why are we doing this?” Putting a strategic lens on marketing tactics

Making time to ask and understand ‘why’ is such a simple step which we can all do to put a strategic lens on marketing and communication tactics.  So why do marketers rush to deliver? 

 

As a profession we are generally good at understanding the who, what, how and the when but in my experience, we often overlook the ‘why’.

We don’t clearly define or understand “for what reason or purpose” are we doing something.  Instead of spending time on strategy, we jump straight to execution.

I wonder is it the lure of the new bright shiny toy, the need to be seen as responsive, or that we haven’t trained our marketers to question and think strategically?

Whatever the reason, not asking ‘why’ is a mistake that often leads to failure as the marketing tactic/s don’t meet either the audiences’ or businesses’ needs.

Knowing ‘why’ helps us to understand the possibilities as well as the boundaries and constraints, consider the audience needs and create more effective marketing activities.

So, what can you do to address the ‘why’ of marketing tactics?

Having a Brand and Marketing Strategy is the best place to start, followed by developing the strategic thinking skills of your marketing and communications people. 

Strategy: Invest the time to create a Brand and Marketing Strategy so you know your audience and have agreed goals, approach and positioning as well as identifying what tactics will actually support your approach.

Educate: Make sure your people have the right skills. Give them training or coaching in marketing strategy, strategic thinking/decision making and influencing techniques.

Process: Build ‘why’ conversations into process – whether a 15-min chat or 2-hour workshop, ensure that the business and marketing teams agree on the purpose of an activity.

Templates: Include a ‘why’ section in all briefing and planning templates to document the reason for doing something, connecting it to an objective.

Question: Use common questions to extract the ‘why’ from your stakeholders: 

  • Why are we doing this?
  • Is there problem we are trying to solve?
  • Is there opportunity are we looking to seize?
  • How is this relevant to the business strategy?
  • Why would customers / employees want or value this?

Remember, to deliver better marketing and communication tactics ask and truly understand why or for what purpose or reason.