Customer Centricity in Product Development and Communication

Ken Ng

Thanks, Pete.
I would like to share with you how we are building customer centricity into product development. In Asia today, markets are still largely distribution driven, but we believe customer centricity is starting to give us an edge which will increase in time. I'd like to share with you some examples of how this is already helping us. The core of what we are doing is simple: understand customers better, and deliver better propositions. This is part of the virtual cycle we want to build over time, of listening, understanding and delivering. Our product development is a key component of this cycle because it integrates the listening with the delivery. By segmenting our customers and understanding them better, we can cater for them better. This is good for the customer, good for the shareholders as it makes a better business, and will continue to give us a competitive edge.

The product development process is generic. We start with an idea, evaluate it, develop the concept, implement. The evaluation loop generates learning for future development. In distribution driven markets, the customer angle is often downplayed, the focus being on distributors; however, we believe the customers perspective is complimentary and strengthens the process.

In the earlier presentation by Pierre, we talked about our customer strategy and how this forms the basis of segmenting and understanding our customers. When we know who we are targeting, and what their needs are, the whole development process becomes more focused. We can then use customer focus groups to probe and drill. The insight fits into many stages of the process. I'd like to share with you how we use customer research to design a product targeted specifically at young people. Following the customer segmentation what we did for Hong Kong, we concluded that young singles is a segment we wanted to target and establish an early relationship. So we developed focus groups to understand their needs, their wants and aspirations. We had assumed that younger people just wanted simple, affordable protection, because their income level was not high and they could not afford to save. We found this was not the case. A large proportion of young people in Hong Kong wanted to save. The research also told us that affordability was less an issue than liquidity. This key insight led us to look at an existing product in our Singapore operation called PRUcash. This product had features which met some of the liquidity requirements, so with help from our Singapore colleagues, we developed this product for Hong Kong. The result is, 40% of PRUcash sales are in the age 20-30 segment, and the average premium is 50% higher than the normal average for this age segment.

Another example: we are currently working on a project on retirement. We conducted research to understand how to approach the concept of retirement and who the best targets were. We had assumed that older single people would be the best targets, because of the likely absence of a family structure to support them in old age. Our research showed us that this was not the case. For older singles, their single status has the same sense of uncertainty around it was mirrored in their views on financial planning, and we found that they were generally unwilling to commit to a long-term saving goal. In contrast, those in the family unit felt more stable and a very strong desire to plan ahead. This insight would therefore help us to target the more optimal segment.

I'd like to share with you a different sort of example on how taking a customer perspective helps us revamp our product communication. We had a conventional product (silo?) approach, each product had its own set of marketing material. This had a number of disadvantages. There were many items to produce, contents tended to overlap and look and feel was inconsistent.

This was what our old marketing material looked like. It was becoming costly and unwieldy, and we wanted to revamp it. We decided then, instead of taking a product view, we should take a customers perspective. In so doing, we created a new modular approach. We started with the key customer segments, and in each segment we then set out the key needs. The two elements naturally combined to form a sales tool to which individual product brochures, now simplified as single-sheet summaries, would fit into.

This is what our new marketing materials looked like. This was well received by our distributors. In addition to having a more manageable system with consistent look and feel, we achieved a 20% reduction in print costs.

Whilst I have given you some examples of what we are doing in Hong Kong, our colleagues in other operations across the region are taking similar approaches. For example, our colleagues in our Indian life operation had a very successful campaign on retirement as a result of insights generated from consumer research. We're able to share the learnings across the region.

To recap, what we are doing is simple: understanding customer needs better, and delivering better propositions. Products and services can be easily copied. But cumulative knowledge about the customers and more importantly, how this knowledge applied, is difficult for competitors to emulate. By building customer centricity into product development, we believe we will continue to build a competitive edge. Thank you. I will now hand over back to Mark.

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