Financial products such as those offered by banks, financial institutions, and insurance companies are closely tied to regulations and policies. Any product innovation generally requires approval from authorities such as the Financial Services Authority (OJK). However, these products can be easily replicated once competitors see that a new product has been approved by authority. Consequently, companies often adopt strategies such as competing on price (e.g., offering lower interest rates) or strengthening sales teams to persuade potential customers. Another option is improving service quality by offering convenience, speed, and other benefits.
In the five years since entering the retail market, this financial company has not seen significant business growth. The company took a bold step to enter the retail market after years of benefiting from the corporate sector. This move was driven by the need to anticipate a narrowing competitive space in the corporate sector. Additionally, the presence of retail products could help raise awareness and improve the corporate product image in the future. However, after five years, the company has not experienced much progress.
According to a survey we conducted for the company, the brand awareness of their retail products has remained stagnant at a low level. Furthermore, customer satisfaction and loyalty are lower compared to competitors. This contrasts with their corporate products, which have higher awareness and customer satisfaction levels than their competitors.
We evaluated this situation from both external and internal perspectives. From an industry standpoint, there is significant potential for retail products to grow, given that financial literacy and product inclusion in this segment are still very low in Indonesia. However, other players in the same industry are equally aggressive. Price wars are frequent, and new products often emerge and disappear rapidly.
Our internal evaluation involved interviews with many company leaders, from executives to managers. We also conducted focus group discussions (FGD) with the marketing and sales teams, as well as partner companies. The results of this internal assessment revealed that the company remains trapped in “the corporate market approach”. The company lacks clear standards for serving retail customers, and even its organizational structure is disorganized.
We believe the company’s financial health is strong enough to avoid resorting to a “cowboy” approach in the market. Therefore, in agreement with the management, we chose a strategy focused on building a foundation and service platform rather than engaging in price wars or launching push or pull marketing communications strategies. Improvements in customer service are essential for this company, and we have formulated and assisted in implementing several strategies for the company, as follows:
- Transforming the service culture by developing a customer-focused service vision and mission, and fostering a customer-centric service culture.
- Creating the right service value proposition for customers and positioning the company to strengthen its market position in terms of service.
- Enhancing service features to complement the innovations in the financial products offered by the company.
- Developing a service blueprint and effective service processes that comply with established standards and regulations.
- Creating service monitoring and Key Performance Indicators (KPIs) to ensure that service activities are performing at the expected top level.
- Strengthening digitalization to replace manual processes, improve efficiency, and enhance the customer experience.
- Developing communication and loyalty strategies to acquire customers and prevent customer churn.