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Your value proposition: pre and post RDR (part 2)

06 November 2017Myra Knoesen

In part one of the article we took a look at the Retail Distribution Review (RDR), how we can embrace it and prepare for it. In part two of the article we will take a look at how to package your value proposition pre and post RDR. 

The customer of today

Rachel Best, Associate Director at PricewaterhouseCoopers (PwC) said “Because of connectivity customers today are different; they want and expect more. They do their own research, they have easy access to alternatives and choices and they take the advice of their peers.”

According to the 2014 PwC Strategy and Analysis South African Social Attitudes Survey, customers’ value customer-centric service more than the products they receive from their insurer. There are also a growing number of customers confident to make their own decisions, irrespective of their knowledge and experience.

The majority of customers, Best said, are becoming sufficiently confident to make financial decisions without consulting an adviser. However, given that financial knowledge levels are often low, some level of “intelligent” guidance is needed to ensure that these individuals make appropriate decisions.

“To deliver these requirements in a differentiated way, it is important to understand customers’ preferences, circumstances and needs. But how do you package all these considerations into the value proposition?” she asked. 

It is about what makes you, as an adviser, different from the other advisers, she said. 

Packaging the value proposition

Best said it all starts with understanding customer needs from product, service and relationships. She said you must ask yourself:

  • What products do my clients need?
  • What level of advice is needed or expected to guide their decision?
  • How much are my clients willing to pay?
  • What services do my clients need?
  • What are my customers willing to pay for?
  • What are the expectations of my clients in the client relationship?
  • Is the product relevant to the customer segment?
  • What is your niche offering?
  • Are you servicing Millennials or retired clients?
  • What kinds of expertise are at hand?
  • Consider what the value versus fee is. What is the value you provide?
  • How do you price your fees for advice? 

“It is all about what customers’ value and how an adviser will articulate that value proposition in a way that customers will want to engage with them. The key is to make consistent choices based on customer segments and figuring out who the segment is and how to create that value proposition for those specific customers. You cannot differentiate yourself other than formulating a good value proposition. So figure out what makes you different and why a customer would want to engage with you,” she concluded.

 

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