Life insurer HDFC Standard Life has revamped the brand to differentiate itself in a crowded market and build a strong connection with customers
This is not the first time that the company has tried to differentiate itself in the crowd. The first attempt was in 2005 when research, carried out by IMRB, had shown that the brand was not well known. Since insurance products are more or less the same, differentiation can only be created through imagery and service. The first thing the company decided to do was ask people why they buy insurance. “They said they want financial independence; the family should not go elsewhere for help. We decoded it as self-respect,” says HDFC Life Executive Vice-president (marketing & direct channels) Sanjay Tripathy. Thus came the Sar uttha ke jiyo (Live with your head held high) campaign conceptualised by Dentsu. “Most others were doing safety, protection and tax-saving — all very tactical positioning. We were probably the first to come out with a strong brand thought. It not only differentiated us, it also helped us build a connection with relevance,” Tripathy adds.
The campaign had several storyboards aimed at different segments like pension plans, endowments and so on. Recently, there was another campaign about the need to take quicker decisions on life insurance. This was targeted at the passive category — people who know they have to buy insurance but they postpone it.
Earlier this year, IMRB went back to the consumers for their perception of the company. What came through was revealing: The Sar uttha ke jiyo campaign had worked well for the company, but it wasn’t a strong enough differentiator; the brand should be more dynamic and talk to its customers, especially the youth, more proactively. Some said the brand was too gentle; it should go out and tell people what is right and what isn’t. Though HDFC’s brand equity in the financial world was very strong, many people didn’t associate HDFC Standard Life with it. “The yellow and green colours didn’t link to HDFC clearly. People said you are definitely not a blood relative of HDFC, but maybe a daughter-in-law because you carry the same surname,” says Tripathy.
Of course, all its attempts to differentiate the brand hadn’t impacted the customer. Says Chaudhry: “We have not played on the customer differentiation; the customers don’t perceive it.” To be sure, the life insurer hasn’t done too badly. It has 3 million customers, and hopes to collect premium income of Rs 3,500 crore this year and break even in 2011-12. The stickiness of its customers is high. According to Tripathy, the latest persistency score is 82 per cent — 82 per cent people who bought insurance from the company last year are still with it. The industry average could be around 70 per cent. What was lacking was a strong differentiator to break the clutter.
The makeover
The company then commissioned Ray + Kesavan for a complete makeover. To begin with, Standard has been dropped from the name. Tripathy says it did not bring any association in the customer’s mind with the British insurer; most people thought it was just a descriptor. (Standard Life did not object.) The colours have been changed, and the logo has become a picture frame to signify the memorable moments of life. Life in the name has been handwritten to click better with the youth. The old tagline of Sar uttha ke jiyo has been carried forward. “AC Nielsen does research on tagline connections every quarter for all life insurance companies; it shows that Sar utha ke jiyo has the highest linkage of more than 50 per cent,” says Tripathy. “As India changes, it connects well with the youth. The core value of self-respect is still carried by the youth, though the manifestation might be different.”
Identity change without any improvement in customer experience can be disastrous. Customers take little time to reject changes that are just skin deep. Chaudhry knows the time has come to raise the service bar: “When people say HDFC Life, they should say working with it was a great experience. Do they make that statement today? Absolutely not. I want to become in life insurance what HDFC is in mortgage.” Consumer satisfaction scores, Chaudhry knows, are more or less similar amongst the top five private life insurers at the moment. “We want to take it to a different level. People are being monitored and their performance is being appraised on that.”
Customer satisfaction
The Insurance Regulatory & Development Authority has changed rules and regulations frequently because somewhere there’s the feeling that life insurance companies have not treated their customers well. “We were already doing some work like calling up customers to check whether they have bought the right product or not. But that’s reactive. Can we take more proactive measures in this direction,” says Tripathy.
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Some steps have been initiated. IRDA gives 15 days of look-in to all customers; if they are not satisfied with the product they have bought during this period, they are free to return it. HDFC Life has made it 30 days because it feels 15 days are too less. “We said we will give one year’s assurance that if you are unhappy with the product or feel it’s not right for you, we will at the least cost allow you to switch to some other product of ours. You will not be stuck with a product for the whole of your life with a product that you did not want to buy,” says Tripathy. HDFC Life, since March this year, has begun to hawk its products online. With the financial consultant out of the transaction, a higher part of the customer’s contribution gets invested. Tripathy admits that online transactions are still low in volumes, though enquiries are sizeable. “Life insurance is a segment where people feel comfortable about advice from the consultant,” says he. Still, HDFC Life will highlight the online option in the new campaign.
There could be more in the days to come. Chaudhry says he is mulling a 50- to 100-people call centre made up of insurance experts. “We want to create a value proposition that a person can call for any company’s product and get an unbiased view. Standard Life does a very good job of it. We believe that it will rub off in some way in the long run.”
The challenge, of course, will lie in execution. Other life insurers, like Bharti Axa, too have begun to focus on the customer experience in their campaigns. Chaudhry knows it well. “We need to create the environment and get the things in place,” says he. “I don’t think we have that today; it’s a three- to five-year journey, it cannot happen overnight.” A recent initiative he took was to establish contact with customers. “Our customer contact was 50 per cent in January; it has now improved 78 per cent. The industry norm is 30 per cent. At least I know where my customers are. I can service them only if I know I can contact them,” says Chaudhry.
| BY THE NUMBERS | ||||
| Insurer | Total WRP | |||
| Rs crore | Market share in % | Rank | YOY growth% | |
| ICICI Prudential | 2,827 | 20.6 | 1 | 41 |
| SBI Life | 1,797 | 13.1 | 2 | -15 |
| HDFC Life | 1,580 | 11.5 | 3 | 58 |
| Reliance Life | 1,258 | 9.2 | 4 | 11 |
| Bajaj Allianz | 1,152 | 8.4 | 5 | -11 |
| Birla Sunlife | 1,044 | 7.6 | 6 | -3 |
| Max New York | 870 | 6.3 | 7 | 15 |
| Tata AIG | 519 | 3.8 | 8 | 5 |
| Kotak OM | 468 | 3.4 | 9 | 32 |
| Canara HSBC | 350 | 2.5 | 10 | 29 |
| Others | 1,861 | 13.6 | - | 16 |
| Private total | 13,726 | 39.9 | - | 13 |
| LIC | 20,694 | 60.1 | - | 113 |
| Total industry | 34,420 | - | - | 58 |
| WRP: Weighted received premium, that is, the sum of first year premium and 10 per cent weighted single premiums and single premium top-ups Figures: H1, 2010-11 | ||||
Emotional connection
There could be other reasons too for the change. Sector experts say that in the last two years or so, people have begun to prefer state-owned Life Insurance Corporation over private life insurers. After the financial meltdown of 2008, a trust deficit has emerged, which has benefitted LIC. Its share of new business has shot up from around 50 per cent two years ago to over 60 per cent now. However, LIC’s weak point happens to be service. “We can’t wish LIC away. Private insurers have been busy fighting with each other; because of this we have not launched products that can take LIC head on,” says Chaudhry. The timing of the makeover too is not lost on observers: Insurance sales turn brisk in the January-March quarter as people begin to think of tax planning.
Smart life insurers the world over try to link with their customers when they are still young. On an average, a person buys five or six insurance products in his lifetime. If you are the first to sell him insurance, there’s a good chance you can sell more to him. HDFC Life has thus assured zero allocation (100 per cent of the money gets invested) in a certain scheme for existing customers. But that’s not all. In the latest campaign, for instance, a brother gives a blank cheque to his sister on Rakhi, and tells her that she can fill it once he gets a job. In an earlier campaign, a girl was shown as funding her father’s new car.
“People now begin their jobs at 21 or 22. We want to give them reason why they should buy insurance. This is the message we gave in the Tulika Sharma ad, where the girl gives money to her father to replace his old car. Indian parents sacrifice a lot for their children; the youth, once they get their job, wants to give something back,” says Tripathy. “In this category, there is no rational differentiation. There has to be an emotional connection. Returns are commoditised. You are more likely to buy a policy if it fulfils an emotional need.” The average age of the HDFC Life customer, according to him, is between 30 and 35 years, and he wants to bring it down further. In addition, HDFC Life has connected with 300,000 students through spelling and painting contests. It has done activations in malls also for its child plans.
What may help HDFC Life is its practice of keeping the commission of its financial consultants low. Higher the commission, lower is the customer’s money that can be invested. IRDA has recently started to cap this commission. This, says Chaudhry, has begun to hurt those which survived on high commission. “The top three players in September had 50 per cent market, the top 75 per cent; this didn’t happen before; the gap with the balance 16 is dramatically increasing,” says he. In a crowded market place, every advantage counts.