“Just who is the customer here?”
In this article, the third in our series exploring the intermediated / broker relationships in Financial Services, we focus on the question of who really is the customer from the product providers’ perspective.
Some intermediaries and brokers feel that the product providers see them as an unavoidable route to end clients, to whom they would prefer direct access. Their concern is that this could undermine their position and lead to clients questioning where they add value. Others, have greater confidence that their role as a valued client interface is respected by clients and providers alike. However, this polarity of views has the propensity to inject a level of cynicism, mis-trust and self-interest in the intermediaries and brokers and in the product providers themselves. (This is perhaps less true in the world of very large corporates where there seems to be more of an acceptance of the respective roles and far more examples of good tripartite relationships between client, intermediary and product provider.)
The above differences of view arise for several reasons:
1. Providers’ lack of clarity, focus or consistent strategy concerning which intermediaries / brokers to work with and develop a more interdependent relationship.
This can occur because the providers do not invest enough time and effort into understanding their brokers’ businesses. This may signal to the intermediaries a lack of clarity and relationship commitment. These are essential to developing relational trust. The product provider needs a long term strategy that demonstrates a real empathy with, and understanding of, their brokers. The providers need to accept that no matter how strong the strategic relationship, they will never get all of the business they want, but by working together they can get a far greater share of the business that matches their own appetite and brings mutual value to both parties.
2. Intermediaries / brokers being short term, tactical and taking advantage of the market.
In a competitive market, providers perceive that a broker is focusing too much on price as an easier retention / acquisition tool. In a sector where you ‘pay for a promise’ the client may not be aware of service shortfalls until the need arises. Often, the providers’ view is that not enough is done to sell their broad offer to the client. Conversely, when capital is in short supply and providers can exert more pressure to increase prices, or when a broker has business that they find hard to place, brokers and intermediaries perceive that the providers are not helping them maintain relationships with clients. All this undermines trust between providers and broker. Resolving this conflict requires relationships built on long term value and trust.
3. Product providers going direct to key customers because they don’t trust the intermediary / broker to represent them.
We often hear comments from providers along the lines of:
“We just don’t seem to get the right level of attention and commitment, I am not sure we are getting our fair, share of mind / share of voice in our broker / intermediaries”.
“I just don’t know how they represent us to our mutual clients. Do they sell our proposition to them?”
“It’s ok when we visit. Once we leave, who knows!”
“We try to ensure this doesn’t affect our business by building great relationships with our key customers directly, even if it means having to cut across the intermediary/broker.”
These statements are symptomatic of relationships lacking commitment and sense of joint plan. Is it a question of control? If so, then put in place some mutually acceptable KPI’s that steer the relationship to better joint working and shared business vision.
4. Intermediaries/brokers being passive within the relationship, rather than co-developing and co-creating the future.
This may be because they are unsure of their role in the relationship or as a result of a lack of communication. This can be resolved by identifying areas where interdependence can be developed and ensuring that outputs reflect mutual commitment.
5. Providers unsure what really drives intermediary/broker relationships, hence reliance on price, bonus and commission.
Providers may think they know all about their intermediaries / brokers, but when probed show little understanding of their strategy, expertise, plans, capability to implement, and potential development areas. They may not understand brokers’ expectations from the relationships relating to people, trust, mutual investment, process/procedure, and training and development. Most providers fail to invest as much in understanding their brokers and intermediaries as into understanding their end clients. How many managers of customer insight/experience have a remit to generate insight into brokers beyond broker service surveys at best? The reality is that for providers in an intermediated environment, both the end client and the intermediary need to be viewed and managed as customers because both can create or destroy value within the relationship.
At Customer Attuned, our people combine expertise in B2B account management and in-depth understanding of financial services. We work with clients who face the challenges outlined above and have developed solutions that met their need. If you would like to know more please contact us by filling out this form.