Endsleigh Insurance




The true value of brands
Financial Services Forum October 2009

Justin Basini               Tom Fa...
Endsleigh session to be interactive
We’d like the Insurance
Endsleigh Insurance
…and challenging
Endsleighhaven’t got all the answers
Because we Insurance
Endsleighhere
Why we are Insurance
Endsleigh Insurance



“The true value of brands is not
exploited in financial services”
Endsleigh Insurance is not exploited in financial services (15 mins)
The true value of brands


1. How do you define the t...
The true value of brands is not exploited in financial services (15 mins)
1. Sustainability – brand as a source of competi...
Endsleigh Insurance




Building on that…
A point of view
Theme #1
Endsleighbe powerful psychological entities …
Brands can Insurance



                                      … for...
Brands are coherent ideas that connect with our
Endsleigh Insurance
 brains and influence what we think and do
Theme #2
Endsleigh Insurance hidden bubble in our economy
But we‟re creating another




                               Br...
Endsleigh Insurance
The „brand bubble‟




Intangible brand value
estimated on balance sheets
                            ...
Endsleigh Insurance up a larger proportion of enterprise value
Intangible assets are making




                      60

...
Endsleigh Insurance
That number is still increasing…



2006

72%                  of value of Dow Jones Market Cap is int...
Endsleigh Insurance value as total of company value is greater still…
For strong brands, brand




  84%
Source: Brand Fin...
Endsleigh Insurance
The „valuation gap‟ according to consumers


Perception
If brand value is increasing….                ...
Endsleigh Insurance




         Why?
         The valuation
         models don‟t
         recognise the
         custome...
This is being driven by the convergence of four major trends that are

causing major disruption
 Endsleigh Insurance
Trend #1
 Endsleigh Insurance
Our economic model        is
no longer delivering
improvements
in our well-being

By engagin...
We are certainly getting
 Endsleigh Insurance        richer
       We are certainly getting older

       We are working m...
Endsleigh Insurance
 Overall we are
 not getting
 more satisfied




1840   1900            1950   2000   2008
Endsleigh Insurance
Trend #2




We’re consuming resources as though there are     3 planets, not 1
Sustainability isn’t c...
Endsleigh Insurance



Consumerism, and the marketing that drives it, developed
with the aim of maximising the use of avai...
Endsleigh Insurance
The population explosion of the past 200 years means that not
all developing economies can take the sa...
Endsleigh Insurance




                      So we will either create
                      more competition for
        ...
Endsleighto explore and
Or we need Insurance       create new models




 Putting the wider sustainability and social agen...
In financial services, there are some with radical vision
     Endsleigh Insurance




“Valuable though these activities u...
Endsleigh Insurance
Trend #3




The internet has delivered unprecedented access to information and enabled
widescale conn...
Endsleigh is rapidly changing the developed world
The internet Insurance
Information access and connectivity are exponenti...
Endsleigh Insurance

                  People are using the
                  power of the internet to
                  c...
Endsleigh Insurancethe medium of the movement
Iran protests: Twitter was
Endsleigh Insurance
Endsleigh Insurance



But change is slower when
it comes to the micro-
level issues that concern
and frustrate people day...
Trend #4
  Endsleigh Insurance
Social, commercial and financial structures
built to support our economy are breaking
down
...
Engagement in democracy at
Endsleigh Insurance
lowest ever levels
A whole generation is just not interested in current pol...
Endsleigh Insurance
Organised religion is breaking down …

Only   26% believe in a personal god
70% do not believe Jesus
w...
Endsleigh Insurance




           Being replaced by different forms of
                        spirituality and fantasy
Endsleigh Insurance
The traditional
organizational
model is breaking
down. It’s much
harder to control

Tesco turn their
o...
Shareholder activism is increasing
   Endsleigh Insurance




20%
Increase in shareholder resolutions
Between 2001 and 200...
The are my presentation charts
       world is a more           We are
  Endsleigh Insurance
  Here                       ...
Endsleigh Insurance




What does this mean
for you and your
brands?
A turning point
Endsleigh Insurance




The opportunity is for brands
and marketers to redefine their
markets by fundament...
Endsleigh Insurance



                      The value of brands in
                      this scenario is to create
     ...
Endsleigh Insurance
Credit card company?
There‟s a debt crisis

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

How ca...
Endsleigh Insurance


Pension provider?
People find it really hard
to visualise what money
invested today looks like
as in...
Endsleigh Insurance
Retail bank?
There‟s a majority of
financially unconfident
people
What can you do to teach
children (a...
Endsleigh Insurance
                                     Insurers?
                         Premiums continue to
         ...
Endsleigh Insurance


All FS providers…
We all know that current
regulation over
communications impedes
understanding
How ...
Endsleigh Insurance
All FS providers…
We have incredible amounts of data and insight into our
customers

Why can‟t we use ...
Endsleigh Insurance




All FS providers…
People are forming ever
bigger, and organised
communities of interest
How can we...
Endsleigh Insurance


                      Brands that successfully
                      tackle these issues will
      ...
Endsleigh Insurance


Thank you
Get in touch with us to continue the conversation

Justin Basini               Tom Farrand...
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True Value Of Brands

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Presentation with audio commentary on trends that are affecting brands and brand strategy. Marketing and brand thinking from Justin Basini (www.basini.com) and Tom Farrand (www.pipelineideas.com). First presented at the Financial Services Forum, October 2009.

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  • Really interesting stuff Justin - can't wait for our taster into 'The World According to Justin' next week.

    As a commercially sustained entity, brands cannot be 100% altruistic so what are your thoughts on the transition of brands from being commercial drivers of shareholder-value to socio-cultural benefactors that make commercial sense but ultimately deliver their value more directly to their consumers? I probably haven't worded this question very well but it'll make an interesting topic for us to go through over lunch!

    Ian
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True Value Of Brands

  1. 1. Endsleigh Insurance The true value of brands Financial Services Forum October 2009 Justin Basini Tom Farrand justin@basini.com tomf@pipelineideas.com www.basini.com www.pipelineideas.com (online Nov 2009) @justinbasini (Twitter) @tomfarrand (Twitter) Blog: www.blog.basini.com
  2. 2. Endsleigh session to be interactive We’d like the Insurance
  3. 3. Endsleigh Insurance …and challenging
  4. 4. Endsleighhaven’t got all the answers Because we Insurance
  5. 5. Endsleighhere Why we are Insurance
  6. 6. Endsleigh Insurance “The true value of brands is not exploited in financial services”
  7. 7. Endsleigh Insurance is not exploited in financial services (15 mins) The true value of brands 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?
  8. 8. The true value of brands is not exploited in financial services (15 mins) 1. Sustainability – brand as a source of competitive advantage EndsleighisInsurance say about you Brand value what people 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
  9. 9. Endsleigh Insurance Building on that… A point of view
  10. 10. Theme #1 Endsleighbe powerful psychological entities … Brands can Insurance … for customers … for employees … for shareholders
  11. 11. Brands are coherent ideas that connect with our Endsleigh Insurance brains and influence what we think and do
  12. 12. Theme #2 Endsleigh Insurance hidden bubble in our economy But we‟re creating another Brand asset value is outstripping perceived customer value
  13. 13. Endsleigh Insurance The „brand bubble‟ Intangible brand value estimated on balance sheets The brand bubble Consumers’ actual perceived value of brands Value to consumer Price Value to company Cost Source: John Gerzema/Edward Lebar Y&R, Market Leader, Sept 2009
  14. 14. Endsleigh Insurance up a larger proportion of enterprise value Intangible assets are making 60 50 % entreprise value 40 30 20 10 0 1950s 1960s 1970s 1980s 1990s 2000s Source: BAV databases and Y&R historical research (Market Leader Sept 2009)
  15. 15. Endsleigh Insurance That 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
  16. 16. Endsleigh Insurance value as total of company value is greater still… For strong brands, brand 84% Source: Brand Finance, Market Leader Sept 2009
  17. 17. Endsleigh Insurance The „valuation gap‟ according to consumers Perception If brand value is increasing…. Reality (over last 10 years) So should brand trust Less trusted than ever 50% Brands should be more liked and admired Less liked and respected 12% Brands should be better known Less salient than ever 20% Quality perceptions should be increasing Quality perceptions decreasing 24% Brands should be more differentiated Differentiation declined in 40/46 categories (inc. financial services) Source: BAV 1993-2007 brand data. Copernicus, Jack Trout and Kevin Clancy (Market Leader Sept 2009)
  18. 18. Endsleigh Insurance Why? The valuation models don‟t recognise the customer reality
  19. 19. This is being driven by the convergence of four major trends that are causing major disruption Endsleigh Insurance
  20. 20. Trend #1 Endsleigh Insurance Our economic model is no longer delivering improvements in our well-being By engaging, brands can work with customers to deliver solutions
  21. 21. We are certainly getting Endsleigh Insurance richer We are certainly getting older We are working more We are getting fatter More crime We are voting less 1840 1900 1950 2000 2008
  22. 22. Endsleigh Insurance Overall we are not getting more satisfied 1840 1900 1950 2000 2008
  23. 23. Endsleigh Insurance Trend #2 We’re consuming resources as though there are 3 planets, not 1 Sustainability isn’t compatible with consumerism in it’s current form Brands can lead the agenda across markets with customers and employees, to deliver a more sustainable future Source: WWF, One Planet Living 2009
  24. 24. 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 products Changed categories to be consumption based Invested in constantly adding and not taking anything away
  25. 25. Endsleigh Insurance The 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
  26. 26. Endsleigh Insurance So we will either create more competition for resources like commodities and energy
  27. 27. Endsleighto explore and Or we need Insurance create new models Putting the wider sustainability and social agenda at the heart
  28. 28. In financial services, there are some with radical vision Endsleigh Insurance “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
  29. 29. Endsleigh Insurance Trend #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
  30. 30. Endsleigh is rapidly changing the developed world The internet Insurance 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
  31. 31. 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
  32. 32. Endsleigh Insurancethe medium of the movement Iran protests: Twitter was
  33. 33. Endsleigh Insurance
  34. 34. Endsleigh Insurance But change is slower when it comes to the micro- level issues that concern and frustrate people day- to-day
  35. 35. Trend #4 Endsleigh Insurance 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
  36. 36. Engagement in democracy at Endsleigh Insurance lowest ever levels A 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
  37. 37. Endsleigh Insurance 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
  38. 38. Endsleigh Insurance Being replaced by different forms of spirituality and fantasy
  39. 39. Endsleigh Insurance The traditional organizational model is breaking down. It’s much harder to control Tesco turn their organization charts upside down How many of us blog or tweet about work? How many of us actually tell the truth?
  40. 40. Shareholder activism is increasing Endsleigh Insurance 20% Increase in shareholder resolutions Between 2001 and 2005 How will people feel when the banks pay out billions in bonuses?
  41. 41. The are my presentation charts world is a more We are Endsleigh Insurance Here more fearful difficult place to (being afraid of something increased 25% between 2001 navigate 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)
  42. 42. Endsleigh Insurance What does this mean for you and your brands?
  43. 43. A turning point Endsleigh Insurance The opportunity is for brands and marketers to redefine their markets by fundamentally reassessing what and how they contribute to society
  44. 44. Endsleigh Insurance The value of brands in this scenario is to create positive engagement with employees and customers around ideas that provide solutions
  45. 45. Endsleigh Insurance 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?
  46. 46. Endsleigh Insurance 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?
  47. 47. Endsleigh Insurance Retail bank? There‟s a majority of financially unconfident people What can you do to teach children (and adults) how to better manage their money?
  48. 48. 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?
  49. 49. 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?
  50. 50. Endsleigh Insurance All FS providers… We have incredible amounts of data and insight into our customers Why can‟t we use this to guide, personalise and help?
  51. 51. Endsleigh Insurance All FS providers… People are forming ever bigger, and organised communities 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?
  52. 52. Endsleigh Insurance Brands that successfully tackle these issues will create deeper connections which is their social imperative And through this create demand, loyalty and advocacy which is their commercial imperative
  53. 53. Endsleigh Insurance Thank you Get in touch with us to continue the conversation Justin Basini Tom Farrand justin@basini.com tomf@pipelineideas.com www.basini.com www.pipelineideas.com (online Nov 2009) @justinbasini (Twitter) @tomfarrand (Twitter) Blog: www.blog.basini.com

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