Marketing Management of

Financial Services
L I C of India
STC Chennaimetro
 Retail Financial Services Industry
Overview
• Over 100 Million Retail investors and still growing
• 24,000 + Bank Branches in the Country
• 5000+ Insurance Services Branches
• 10000+ Brokerages Service Branches
• 100,000 + CA’s
• Growing number of Financial Products

Confidential
 What does the Personal Finance Customer wants ?

Implement
Optimization Budgeting Identify Goals that have
of Insurance and financial implications–
Premium Spending Home, Children’s
Plans education, Marriage,
Vacation, Manage Life
Style after retirement

Manage Debt
efficiently Identify
Consumer Investment
Options to meet
goals

Take maximum benefit

of tax laws and
Distribute Wealth regulations to create
according to his additional surplus for
wish and not investment
according to laws
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Evaluation Of Various Investment Avenues
Return Risk Marketab Tax Conveni
ility / Shelter ence
Liquidity
Current Capital
Yield Appreciati
on
Equity Low High High Fairly High High
Shares High
Non- High Negligible Low Average Nil High
convertible
Debentures

Equity Low High High High High Very High

Schemes
Debt Moderate Low Low High No tax on Very High
Schemes Dividends
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Evaluation Of Various Investment Avenues
Return Risk Marketab Tax Convenie
ility / Shelter nce
Liquidity
Current Capital
Yield Appreciati
on
Bank Moderate Nil Negligible High Nil Very High
Deposits
PPF Nil Moderate Nil Average Sec 80C Very High
benefit
LIP Nil Moderate Nil Average Sec 80C Very High
benefit
Real Moderate Moderate Negligible Low High Fair
Estate
Gold & Nil Moderate Average Average Nil Average
Silver
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 Trends in Financial Services
Distribution
Life Insurance
-Repeat selling (Recycling)
-Short Term and ULIPs
Banks
– Captive Audience
– Cross Selling
– Up selling
– Trusted by every one
• Full Service Brokerage Houses
– Structured Products
– Mainly for knowledgeable customers
Confidential
 Need for Financial Planner

• Make Wealth Generation process

dependent and not individual dependent
• Process helps in serving large base of
customers effectively
• Focus on Customer wealth enhancement
and not product sales

Confidential
 Critical role in today’s economy

• Financially illiterate population

• Complexity of Financial Products in the
market place
• Needs some one who can help us dream
for higher goals

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 No Differentiators !!!!

Consumers faced with commoditised brands &

product pricing parity

Yet most Financial Services Organizations talk about

customer - centricity
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The question is – what is the
customer really perceiving ?

Financial Services Industry has taken the

easy option …
To clone the FMCGs
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 Cloning the FMCG’s of the
world
• One of the biggest blunders :
– Branded financial products in the hope that it will create a
differential in the marketplace.
– But it is easier to remember the brand name of a soap than
that of a financial service.
– Can’t touch, see, smell, taste the promise of future gains.

• Branding commoditised products does not produce

customer - centricity

Confidential
So What Next, who is going to win
the trust of the customer ?

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 The real differentiator of
customer – centricity in a commoditised world
of financial products -
ensure that customer is happy with the product
he has bought
- for a longer time

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• Myth 1 – The larger the range of products, the more
customer-centric I am.

Mythbuster – The range of products has

emerged from being
competition-centric.

(ULIP)

Confidential
• Myth 2 – Better technology (read CRM) leads to
• better customer service.

Mythbuster – Technology
alone does not deliver,
helps people do.

(IT & CRM)

Confidential
• Myth 3 – Launch a product and the customer will start
• using instantly.
• - Give a customer a card and he will learn how to play
• with it immediately

Mythbuster – Customers need

To be educated too…

(Consumer awareness)
Confidential
• Myth 4 – The only way to get a customer is from
• competition.

Mythbuster – Customers are not

only present where competition is.
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Myth 5 – No difference between marketing & selling

Mythbuster – “Selling focuses on the needs of the seller;

marketing on the
needs of the buyer.

(Need based selling)

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Myth 6 – In the absence of relationships ‘trust’ builds financial
brands

Mythbuster – Trust is not a differentiator at all…

it is the very minimum that the customer expects!!

Confidential
So what will the differentiators be
• Technology
• (Technological updation or upgradation should be there to be number one in
competitive environment)

Brand and Market leadership

(It is compulsory now to maintain brand image to etched in the minds of
customers and sustain the market leadership)
CRM Initiatives
(Consumers awareness and expectations are increasing and we should also
make ourself match to their expectation
Confidential
 The real differentiator of
customer – centricity in a commoditised world of financial

products -
ensure that customer is happy with the product he has bought
-for a longer time
-And He should feel that he has bought the best product
available in the Market.

Confidential
Build a customer centric advisory
based model

Confidential
 Identifying the Gap
A survey conducted shows
that

 The age group of 20 to 40 spend lot

of time thinking about their future
financial security.
 Indians are ranked at the lowest
appetite for risk at Asia pacific risk
taking index .
 AWARDS

Golden Peacock
Reader’s Digest SKOCH Challengers Loyalty Awards Award for Excellence
Award -2008 Award 2008 for 2008 - Insurance in Corporate
Jeevan Madhur. Sector Governance

Web 18 Genius of the Outlook Money NDTV Profit NDTV Profit Business CNBC Awaaz
web awards 2007 Leadership Award – Consumer
Awards 2007 Awards 2007
2007 & 2008
 Activities for sustaining Brand Image
1. ECS:
By filling a mandate form and getting it validated from the bank, premium can be paid
through ECS in select centres where this facility is made available.
2. LIC PORTAL
By registering the policies through our portal (validation not required), premiums can
be paid.
3. Payment through service providers like mponline, aponline, suvidha

4. THROUGH ATMs OF CORPORATION BANK & AXIS BANK. ( Regn. to be made thru websites
of Banks)

5. THROUGH SMS -- Only for customers of Corporation Bank through the ATMs of Corporation
Bank. Unique PIN will be allotted. Debit Card & Mobile Number is a must.

6. SENIOR BUSINESS ASSOCIATES OF LIC & EMPOWERED AGENTS

 CRM INITIATIVES -- I V R S

4. INTEGRATED VOICE RESPONSE SYSTEM

Information on policy can be obtained through calling 1251 over telephone all
over India.

5. METRO AREA SERVICE HUB (MASH)

In Selected Metros in India, MASH has been created to reduce the
work load at Branches in the areas of servicing where Customer
interaction or his physical presence is not required.
 CRM INITIATIVES --
MASH
• METRO AREA SERVICE HUB
(MASH)

1. Issue of Premium payment Notices

2. Issue of Default & Lapse Notices
3. ULIP statements
4. Special Revival Campaign Notices
5. SSS Status Reports (Yearly)
6. Payment of SB dues up to Rs.2 lacs
(subject to certain conditons.)

In Chennai MASH was inaugurated on 7th Sep.2009.

 CRM INITIATIVES --
CUSTOMER PORTAL
6. CUSTOMER PORTAL
Any Policyholder having access to Internet can
avail the services available in our Customer Portal.
They can get information on:
1. Status of their policies
2. Revival & Loan quotations
3. Payment of Premiums (through select Banks)
4. Can send E-Mail to LIC for any feed-
back/complaint
5. Can make a change of their address (only if the
enrolled policy is validated by the servicing Branch)
 CRM INITIATIVES --
RELATIONSHIP RENEWAL PROGRAMMES

7. RELATIONSHIP RENEWAL PROGRAMME

This is an initiative taken by our LIC to ensure

that our valuable customers are retained with us, particularly
in this competitive times.

In Relationship Renewal Programme of 2009 (RRP 2009) the

following criteria was adopted by LIC to establish contact
with the customers.
 CRM INITIATIVES --
RELATIONSHIP RENEWAL PROGRAMMES

• RELATIONSHIP RENEWAL PROGRAMME

1. Policyholders in the age group of 30 to 40 yrs.

2. Their policies maturing in the year 2009-10.
As this group of customers are in prime age group and would be going out of our
books, they may need to be insured afresh and also may need retirement planning.

The ultimate aim is to reestablish our relationship with them and retain them with us.

This gives an opportunity to re-sell.

RRP I ( policyholders without agents to serve)
RRP 2 ( Customers insured by parents when they were MINORS)
 CRM INITIATIVES --
RELATIONSHIP RENEWAL PROGRAMMES

• RELATIONSHIP RENEWAL PROGRAMME

The ultimate aim is to reestablish our relationship with them and

retain them with us.

This gives an opportunity to re-sell.

Information gathered during these contacts, like mobile nos. and
new addresses will be updated in our FEAP systems.
 CRM INITIATIVES --
GOLD CLUB CUSTOMERS
8. CUSTOMER LOYALTY PROGRAMME ( GOLD CLUB )

This is a concept of offering some specialised and differentiated

services to our Loyal Customers fulfilling certain norms for
admissibility to this Gold Club.

This was initially launched in 6 centres, viz.,

Delhi, Mumbai, Kolkata, Chennai, Hyderabad and Pune.

Now this is being extended to other divisional centres also.

The criteria to become a Gold Club Customer for 2009 was:
1. Customer having atleast 5 policies in force as on
01.04.2009
2. paying at least Rs.25000/- as premium annually
 CRM INITIATIVES --
GOLD CLUB CUSTOMERS

• CUSTOMER LOYALTY PROGRAMME ( GOLD CLUB )

3. Having at least one policy 7 years old, i.e., with DOC prior to 01.04.2002
OR

Customers having Jeevan Aastha policy for single premium of Rs.5 lacs
miminum.

• CUSTOMER LOYALTY PROGRAMME ( GOLD CLUB )

Proposed differentiated Services for these Customers:
1. contacting them before maturity of policies
2.contacting the customers when premiums are in default.
3.wishing them on their birthday.
4.sending SMS alerts on product launch (by C.O.)
5.attending their queries and help in resolving their grievances
6.any other services as decided by C.O. in future.
 CRM INITIATIVES --
CUSTOMER ZONE ( C ZEE)
9. CUSTOMER ZONE ( C Zee)
This has been brought out as a relationship management structure to offer one-stop
resolution for all the needs of customer.
It will cater to the needs of phone-in customers, walk-in customers and priority customers
(Gold Club Customers).

Initially set up in all the 8 Zonal Headquarters. During the current year it will be opened
in26 new centres.

Simple services like change of address, issue of premium paid certificates, loan and revival
quotations and other services as decided from C.O. from time to time will be provided these
C Zee.

The motto of C Zee is “WE CARE”

It aims at providing one-stop resolution point for the customer and owning the customer
and not the transaction alone.
 CRM INITIATIVES --
MORE FROM LIC

10. DATA BASE & DATA MINING

By utilizing the vast data of customers available with us,
LIC has launched the above Relationship Renewal and
Gold Club programmes for enhanced quality service to
our esteemed policyholders.

Already, we have also started issuing a Single Premium

Notice for multiple policies of the same policyholder
falling due in a particular month.
 CRM INITIATIVES --
MORE FROM LIC

• Operation of SINGLE WINDOW SYSTEM

of Servicing in Branches and formation of Help
Desk are also a step in the offering of quality
service.

• CLAIMS RECYCLING aims at retention of our

Customers
 IT - INITIATIVES --
LIC is the one of the first organisations in introducing Information
Technology

Adrema, Powers, UNIX Environment, COBOL Programming and

FEAP (Front End Application Package)

All the Branches and Satellite Offices are connected by Wide Area
Net Work
 IT Initiatives --
EDMS PROJECT

• ENTERPRISE DOCUMENT
MANAGEMENT SYSTEM

Already 26.51 crores dockets have been scanned.

Once this is fully completed and operationalised, our

policyholders will be able to get policy service from any of
our branch offices in the country.
 CSR (Corporates’ Social
Responsibility)
• For weaker sections:
• Janashree Bima Yojana , Shiksha Sahayog
Yojana , Aam Aadmi Bima Yojana’
 Golden Jubilee Foundation

• Trust formed in 2006

• Education, health, relief of poverty or
distress and advancement of other objects
of general public utility
• Ambulances were given to hospitals.
• Donated money to many charities
 LIC Golden Jubilee Scholarship
Scheme 2009

• Scholarship: Rs.1,00,000/- per year for

Graduation/Professional Course
• 10 students from weaker section per DO
 “ DARE TO DREAM ....

.... AND ACT TO ACHIEVE “

THEME OF LIC FOR THE YEAR

2010-11
“ BUSINESS IS LIKE A GAME OF
TENNIS; THE ONE WHO SERVES
WELL ALWAYS WINS.”