Endsleigh Insurance

Justin Basini and Tom Farrand

Financial Services Forum October 2009

The true value of brands

Endsleigh InsuranceWhy are you here?

Learning?

Networking?

Escaping?

Endsleigh InsuranceWhy are we here?

The same reason as you

Endsleigh InsuranceWe’d like the session to be interactive

Endsleigh Insurance…and challenging

Endsleigh InsuranceBecause we haven’t got all the answers

Endsleigh InsuranceWhy we are here

Endsleigh InsuranceNo group hugs

Endsleigh InsuranceNo „live‟ twitter

Endsleigh InsuranceYou decide what to take back to your desks or throw away

Endsleigh Insurance

“The true value of brands is not

exploited in financial services”

Endsleigh Insurance

1. How do you define the true value of brands?

2. Using your definition and examples, explain why you agree or disagree with

the statement

3. What one thing could organisations do to unlock more value from brands?

The true value of brands is not exploited in financial services (15 mins)

Endsleigh Insurance1. Sustainability – brand as a source of competitive advantage

Brand value is what people say about you

What you stand for? Your values

Point of differentiation through what you stand for

A premium – loyalty, better value

Brand and customer experience

2. Virgin part of a larger portfolio, Co-op contribute to the environment (belief?)

Adding value over and above price

Financial services brands are afraid – connecting with the reality

Brand is about internal alignment over and above logo and graphics

Lack of bravery – prevailing mediocrity

3. Customer insight, service not sales

Brand coming from the top down – embedded throughout the organisation

Bravery in leadership – leadership (CMO/CEO) turnover

Consistency and sustainability

Measurement – bridging the gap between “feeling” and numbers/value

Listening to customers, constant dialogue

Is there any talent in marketing in financial services?

We are brand guardians in marketing, the whole organisation owns the brand

The true value of brands is not exploited in financial services (15 mins)

Endsleigh Insurance

Building on that…A point of view

Endsleigh InsuranceTheme #1Brands can be powerful psychological entities …

… for customers

… for employees

… for shareholders

Endsleigh InsuranceBrands are coherent ideas that connect with our

brains and influence what we think and do

Endsleigh InsuranceTheme #2But we‟re creating another hidden bubble in our economy

Brand asset

value is

outstripping

perceived

customer value

Endsleigh InsuranceThe „brand bubble‟

Intangible brand value

estimated on balance sheets

Consumers’ actual perceived

value of brands

Price

Cost

Value to company

Value to consumer

The brand bubble

Source: John Gerzema/Edward Lebar Y&R, Market Leader, Sept 2009

Endsleigh InsuranceIntangible assets are making up a larger proportion of enterprise value

0

10

20

30

40

50

60

1950s 1960s 1970s 1980s 1990s 2000s

% e

ntr

eprise v

alu

e

Source: BAV databases and Y&R historical research (Market Leader Sept 2009)

Endsleigh InsuranceThat number is still increasing…

2006

72% of value of Dow Jones Market Cap is intangible

Fortune

2007

70% of value of S&P 500 is intangible

Accenture

Source: Market Leader Sept 2009

Endsleigh InsuranceFor strong brands, brand value as total of company value is greater still…

84%

Source: Brand Finance, Market Leader Sept 2009

Endsleigh InsuranceThe „valuation gap‟ according to consumers

Source: BAV 1993-2007 brand data. Copernicus, Jack Trout and Kevin Clancy (Market Leader Sept 2009)

Perception

If brand value is increasing….

So should brand trust

Brands should be more liked and admired

Brands should be better known

Quality perceptions should be increasing

Brands should be more differentiatedDifferentiation declined in 40/46 categories

(inc. financial services)

Quality perceptions decreasing

24%

Less salient than ever

20%

Less liked and respected

12%

Less trusted than ever

50%

Reality (over last 10 years)

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Why?

The valuation

models don‟t

recognise the

customer reality

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This is being driven by the convergence of four major trends that are

causing major disruption

Endsleigh InsuranceTrend #1

Our economic model is

no longer delivering improvementsin our well-being

By engaging, brands can work with customers to deliver solutions

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1840 2008200019501900

We are certainly getting richerWe are certainly getting olderWe are working more

We are getting fatter

More crimeWe are voting less

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1840 2008200019501900

Overall we are not getting more satisfied

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We’re consuming resources as though there are 3 planets, not 1

Sustainability isn’t compatible with consumerism in it’s current form

Trend #2

Source: WWF, One Planet Living 2009

Brands can lead the agenda across markets with customers and employees,

to deliver a more sustainable future

Endsleigh Insurance

Consumerism, and the marketing that drives it, developed with the aim of maximising the use of available production

We built in planned obsolescence to productsChanged categories to be consumption basedInvested in constantly adding and not taking anything away

Endsleigh InsuranceThe population explosion of the past 200 years means that not

all developing economies can take the same approach

There are not enough resources

Source: WWF, One Planet Living 2009

Source: US Census

Endsleigh Insurance

So we will either create more competition for resources like commodities and energy

Endsleigh InsuranceOr we need to explore and create new models

Putting the wider sustainability and social agenda at the heart

Endsleigh InsuranceIn financial services, there are some with radical vision

“Valuable though these activities unquestionably are, there is an overriding need to

extend the understanding of corporate sustainability to include responsibility for

building the business as a whole in a way which enhances the common good.

Corporate sustainability is not an adjunct to the company‟s business, it is about the

raison d‟etre of the company itself.”Sir Stephen Green, Chairman HSBC, Frankfurt 2009

Endsleigh InsuranceTrend #3

The internet has delivered unprecedented access to information and enabled

widescale connectivity between people. And its only the start

The role of brands going forward will be

less about pushing a message and

more about engaging in the debate

Endsleigh InsuranceThe internet is rapidly changing the developed world

Information access and connectivity are exponential in growth

Social Media has overtaken porn

as the #1 activity on the Web

1 out of 8 couples married in the U.S.

last year met via social media

Years to Reach 50 million Users

Radio 38 Years

TV 13 Years

Internet 4 Years

iPod 3 Years

Facebook added 100 million users

in less than 9 months

iPhone applications hit

1 billion in 9 months

If Facebook were a country it would be

the world‟s 4th largest between the

US and Indonesia

Endsleigh Insurance

People are using the

power of the internet to

connect and drive radical

action around a range of

issues large and small

250,000 protestors signed

up via Facebook to Anti-

Farc demonstrations across

the world

Endsleigh InsuranceIran protests: Twitter was the medium of the movement

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But change is slower when it comes to the micro-level issues that concern and frustrate people day-to-day

Endsleigh InsuranceTrend #4

Social, commercial and financial structures

built to support our economy are breaking

down

Big opportunity for brands to deepen

relationships as signposts in a changing

and unsettling world

Endsleigh InsuranceEngagement in democracy at

lowest ever levelsA whole generation is just not interested in current politics

50% of 18-24 year olds

voted in Big Brother

38% of them voted in the

2005 general election

70% were interested in the environment,

taxation and healthcare

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Organised religion is breaking down …

Only 26% believe in a personal god

70% do not believe Jesus was the son of God

50% never go to

church

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Being replaced by different forms of spirituality and fantasy

Endsleigh InsuranceThe traditional organizational model is breaking down. It’s much harder to control

How many of us blog or tweet about work?How many of us actually tell the truth?

Tesco turn their

organization charts upside down

Endsleigh InsuranceShareholder activism is increasing

How will people feel when the banks pay out billions in bonuses?

20%Increase in shareholder resolutionsBetween 2001 and 2005

Endsleigh InsuranceHere are my presentation charts

We are

more fearful (being afraid of something

increased 25% between 2001

and 2005

We are

less trusting(e.g. In businesses from 57% in

2008 to 37% in 2009)

There are

more wars(348 in 2007)

We are spending more

money on military(up 50% from 2000, to $1.2trn in

2007)

The world is a more

difficult place to

navigate

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Green is the new black

17th February 2009

Sir Nicholas Stern declares we need $400bn in global green investment …

…President Obama pledges up to $112bn for investments in green technologies

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What does this mean for you and your brands?

Endsleigh InsuranceA turning point

The opportunity is for brands and marketers to redefine their markets by fundamentally reassessing what and how they contribute to society

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The value of brands in this scenario is to create positive engagementwith employees and customers around ideas that provide solutions

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Credit card company?There‟s a debt crisis

There‟s a huge group of people don‟t how to budget

How can you make budgeting as easy as doing Facebook? Or gaming?

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Pension provider?People find it really hard to visualise what money invested today looks like as income at retirement

As a result, they‟re doing very little. What about using gaming to help people understand future scenarios and risk?

Endsleigh InsuranceRetail bank?There‟s a majority of financially unconfident people

What can you do to teach children (and adults) how to better manage their money?

Endsleigh Insurance

Insurers?Premiums continue to

rise as people consume, lose, damage and claim

more

How can you help consumers learn to protect, repair and

prolong versus replace?

Or use and track only what they consume to

reduce their premiums?

Endsleigh Insurance

All FS providers…We all know that current regulation over communications impedes understanding

How can we change this? And find new and better ways to engage people effectively?

Endsleigh InsuranceAll FS providers…We have incredible amounts of data and insight into our customers

Why can‟t we use this to guide, personalise and help?

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All FS providers…People are forming ever bigger, and organisedcommunities of interest

How can we find ways to tap into the greater purchasing power and specific needs they have to create completely new kinds of purchasing, borrowing and saving tools?

Endsleigh Insurance

Brands that successfully tackle these issues will create deeper connectionswhich is their social imperative

And through this create demand, loyalty and advocacy which is their commercial imperative

Endsleigh Insurance

Thank you

Get in touch with us to continue the conversation

Justin Basini Tom Farrand07786548395 07748116479

justin@basini.com tomf@pipelineideas.comwww.basini.com www.pipelineideas.com (online Nov 2009) @justinbasini (Twitter) @tomfarrand (Twitter)Blog: www.blog.basini.com