AMB340 Suncorp Services Marketing Audit PDF

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Table of Contents 1.0

Introduction...................................................................................3

2.0

Services Marketing Mix Analysis ................................................4

3.0

2.1

Service Product and Positioning....................................................4

2.2

Pricing, Productive Capacity and Demand.....................................5

2.3

Physical and Electronic Distribution...............................................6

2.4

Integrated Service Marketing Communication...............................7

2.5

Service Process ............................................................................8

2.6

Managing People.........................................................................10

2.7

Servicescape and Physical Evidence..........................................11

Recommendations .....................................................................12 3.1

Showcase Suncorp’s augmented services..................................12

3.2

Improve service process to increase customer satisfaction.........13

3.3

Educate older generations with tangible distribution....................13

4.0

References...................................................................................14

5.0

Appendices..................................................................................17

1.0 Introduction Suncorp is one of Australia’s leading banks serving one million small to medium enterprise and agribusiness customers through a national network of stores and feefree ATMs (Suncorp, 2018). According to Lovelock’s services classification, Suncorp’s combination of banking and insurance makes the organisation an information processing service (Kapoor et al., 2011; Lovelock, 1986). In a financial services landscape dominated by the Big Four banks, Suncorp has recently changed its focus from insurance services to banking to stand out from their competitors. This services marketing audit analyses and evaluates the effectiveness of Suncorp’s current services marketing mix and identifies three areas for improvement using services marketing theory. These recommendations aim to point Suncorp in the right direction to ensure the company efficiently utilises their services to best fulfil their customer’s needs.

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2.0 Service Marketing Mix Analysis 2.1 Service Product and Positioning Whilst Suncorp is typically known for its insurance services, the organisation has undergone a brand overhaul that highlights their banking services. Using the three levels of product by Kotler (2008), Suncorp’s core banking product is a savings bank account or a housing loan. However, Suncorp also offers other augmented services including; internet banking, ATM’s and 24hr customer service (Suncorp, 2018). According to IBISWorld, the revenue for insurance is currently $66bn whilst the banking industry is estimated at $146bn (2018). This gap signifies a potential growth sector for Suncorp. However, recent research shows that more than two thirds of Australians procrastinate about making financial decisions (Suncorp, 2018). Hoping to differentiate themselves from the big four banks, Suncorp is aiming to attract the 1834-year-old market as this demographic typically procrastinate when it comes to making financial decisions (Suncorp, 2018). In response, the organisation has kicked off a new banking campaign that encourages everyday Australians to be more confident with their money. This change garnered the highest consumer satisfaction ranking for Suncorp of Australia’s most popular banks (Roy Morgan Single Source, 2018).

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2.2 Pricing, Productive Capacity and Demand Before May 2016, Suncorp were still operating under a cost-based strategy and reportedly lost up to $AU1.5 million and approximately 125,000 customers (Suncorp Group, 2016). Since 2016 Suncorp has evolved to operate under a value-based pricing strategy which focuses on the service quality and customer satisfaction to ensure value is delivered (Suncorp, 2018). Despite this, the perceived value from customers is often hard to measure and remains uncertain in the consumers mind till perceived benefits are received (Kienzler, 2017). In the past, Suncorp constrained the supply of services available to consumers. With approximately 9 million consumers each with specific needs, but limited capability, Suncorp were only able to meet a select number of needs compared to the big four banks (Cameron, 2016). Now Suncorp has repositioned itself with four main categories including property, self, mobility and money. To support each of these areas, Suncorp invested a significant amount of money in technology and data insight to tailor different services based on consumer demand (Cameron, 2016). Suncorp has better positioned and priced their services by understanding the real perceived value, segmenting products and services and responding proactively to customer feedback which is imperative for maintaining brand loyalty and ‘top of mind’ awareness (Lovelock, Wirtz & Chew (2008). By assessing each product and service using an economic value analysis Suncorp has effectively responded to consumer demand by tailoring pricing and productive capacity to different target demographics (Hinterhuber, 2003).

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2.3 Physical and Electronic Distribution Suncorp uses two types of service delivery methods to distribute its banking and insurance services including interpersonal service delivery and self-service delivery. Firstly, interpersonal service delivery incorporates the customer and employee in an active servicescape while self-service delivery essentially means few, if any, employees are involved while the service takes place and it is typical for the customer to actively participate in the service itself (Lovelock, Wirtz & Chew, 2008). Recently, with the Royal Commission into Banking taking place in Australia, consumer confidence is shaky and is largely influenced by financial outlook and economic opinions reflected in the news (Roy Morgan Research, 2018). In recent months, Australian consumer confidence toward current and future economic conditions has only improved by 0.9 percent (Roy Morgan Research, 2018). As the services that Suncorp provides are said to be complex and come with highperceived-risks Suncorp must provide more opportunities of contact between employees and customers by meeting physical access needs of their customers (Foster, 2018). On the other hand, Suncorp uses self-service delivery as part of their electronic distribution strategy to cater to the convenience of their customers. 86 per cent of Australians have access to household internet access and technology, of which, banking is the most popular online activity at 80 per cent (ABS, 2018). To appease this audience, it is recommended Suncorp continue to offer augmented services including internet banking, ATMs and 24-hour customer service.

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2.4 Integrated Service Marketing Communication Starting in February 2016 Suncorp announced its “One company, many brands” strategy to bring all five separate companies under one roof (Cameron, 2016). Suncorp were losing over 125,000 customers a month and the board found a lack of consumer segmentation significantly contributed to this problem therefore segmentation of the 9 million customers was the solution (Suncorp Group, 2016; Cameron, 2016). Based on customer feedback, Suncorp connected with consumers on a deeper level and focussed on ease of navigation and access Suncorp’s products and services with the launch of the Suncorp app. The app connects personal bank accounts, insurance plans and a question platform among other services so customers could ‘find everything in one place’ (Suncorp Group, 2018). According to The Financial Brand, Millennials are early technology adopters and use mobile banking almost three times more than other generations (2018). With the ease of this mobile banking app, Suncorp are attracting a greater amount of youth and widening their customer basis. These new technologies and systems are making the business a more comfortable place for the younger generations to shop with both on and offline. Additionally, Suncorp is targeting entertaining, young ad campaigns like “Money with Sunny” to spike interest amongst this new target market (refer to Appendix A) (Suncorp, 2018).

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2.5 Service Process Service process redesign is important to combat natural deterioration that occurs in all workplaces, especially internal processes (Lovelock, Wirtz & Chew, 2008). As Suncorp deliver a wide mix or services including banking, insurance and super and with such large offerings the service process can weaken faster. Based on service reviews, most of the complaints stem from organisation, time management and technology as consumers have communicated difficulties with internet banking, long wait times and loss of personal information with an overall rating of 1.4 out of 5 (refer to Suncorp Services Blueprint) (Product Review, 2018). Evidently, management within Suncorp is of a low standard and is causing confusion amongst consumers. Based on the blueprint, long wait times occur predominantly when customers first arrive in store and fail points occur within the IT department. A high number of app uses has resulted in multiple occasions of glitches and many clients have found personal information has been lost through the customer record database. It is recommended Suncorp create a better service process, focussing more on each of the separate services individually. Additionally, Suncorp needs to deal with consumer complaints on a case-by-case basis focussing on optimum capacity by facilitating quality interactions rather than working at maximum capacity and focussing on quantity.

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2.6 Managing People Service personnel are a primary source of competitive advantage and differentiation as most consumers consider encounters with frontline service staff as the most important aspect of a service (Farrell, Souchon & Durden, 2001). Based on the organisations current human resource management strategies, Suncorp appears to be operating in a cycle of mediocrity which is commonly found in large bureaucratic organisations (Lovelock, Wirtz & Chew, 2008). At its worst, the cycle of mediocrity is oriented towards a standardised service focusing on operational efficiencies, with no incentives to serve the customer well and rule-based training that gives the employees little freedom in a narrow, repetitive job (Lovelock, Wirtz & Chew, 2008). In the long-term these habits lead to unsatisfied customers, little incentive for customers to cooperate with organisations to achieve better service, complaints are often made to already unhappy employees and customers tend to stay due to lack of choice (Lovelock, Wirtz & Chew, 2008). Despite this, Suncorp also incorporates elements from the cycle of success as many employee reviews insist that the organisation is ‘highly customer centric’ and ‘has an excellent culture for a long, thriving career’ (Glassdoor, 2018). However, comments also suggested employees are measured by the absence of mistakes and frontline staff are taught using rule-based training (Glassdoor, 2018). Whilst this could be a point of improvement for many organisations, it is reasonable to expect in the financial services industry that many employees are trained in alignment with necessary legalities and processes. Therefore, on the organisational level, Suncorp appears to be working towards the cycle of success and it is recommended Suncorp continue to heavily invest in recruitment, development and motivating its frontline employees.

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2.7 Servicescape and Physical Evidence Back in 2015, Suncorp organization won Best Workplace Flexibility Program at Australian HR Awards and 82% of their employees were happy about the work flexibility provided in late 2016. Work@Home Hubs (W@H) were designed to enable their employees to carry out work from home according to personal schedules. W@H employees were reportedly to have a higher engagement compared to others and in 2015 the employee engagement score increased by 10 points in 2015 (Taylor, 2015). The Inclusion@Work Index led by Diversity Council Australia, sponsored by Suncorp, shows that employees from an inclusive team are 19 times more likely to be satisfied with their roles, 10 times more likely to be more effective and 9 times more likely to be much more innovative. With all these attributes combined, being an inclusive organization Suncorp were able to provide an excellent customer services by five times (Suncorp, 2018). Not only that, an inclusive workplace not only provide a flexible and safe environment for their employees, it also improves Suncorp business outcome in the long run (Suncorp, 2018). Having regulatory survey on employees’ job satisfaction and continuously providing a better workplace at Suncorp, it encourages a greater diversity that leads to a better business performance. According to Bitner’s Servicescape Model, physical setting and environment of an organization can affect employees’ work satisfaction, productivity and motivation which leads to customer satisfaction. Not only that, physical environment can be highly influential towards customer about the organization’s image, purpose and quality (Bitner, 1992).

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3.0 Recommendations Following the SMART goal-setting criteria, the following three short-term recommendations devised for Suncorp aim to improve overall service quality.

3.1

Showcase Suncorp’s augmented services

To remain successful across varying branches of services, Suncorp needs to provide reliable service and perceived value in all areas of expertise. In the following six months (October 2018 - March 2018), it is recommended Suncorp showcase other augmented services that they provide including insurance, super and investment in their marketing campaigns. This allows Suncorp to target various demographics with different value propositions to maximise revenue and ‘top of mind’ brand loyalty with the message ‘Create a better today’ to align with Suncorp’s vision (Hakala, Svensson & Vincze, 2012; Suncorp 2018). Suncorp can fulfil this need through timely ad campaigns across financial podcasts, TV and Facebook with the bulk of the marketing budget spent throughout November and December for end-of-year and new year campaigns. Improving advertising for these services is achievable in the short-term with Suncorp’s current marketing budget as Suncorp recently spent $100 million to speed up the delivery of its digital marketplace (AFR, 2017). The effectiveness of this recommendation will be measured by assessing ongoing revenue for each service and distributing online and direct customer surveys.

3.2

Improve service process to increase customer satisfaction

Suncorp needs to create a more effective service process focussing on each of the separate services individually to ensure customers are satisfied. This can be achieved through effectively training staff with modules that are completed upon hiring new employees. Suncorp must create two training modules for employees hired into the IT department and the customer service department to address consumer concerns relating to loss of personal information, long wait times and technology difficulties relating to internet bankin g (Product Review, 2018).

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It is recommended Suncorp invest $1,800,000 in hiring two employees for each of the major three cities in Australia including Sydney, Melbourne and Brisbane to work solely on improving the speed efficiency for the Suncorp website and Suncorp app (PayScale, 2018). This equates to each employee being paid $100,000 a year for 3 years as they work on establishing and maintaining fast and effective IT systems (PayScale, 2018). To measure the effectiveness of this recommendation, customer satisfaction surveys will be emailed and texted annually to willing customers. This aligns with Suncorp’s vision to ‘Create a better today’ for their customers (Suncorp, 2018).

3.3

Educate older generations with tangible distribution

Suncorp provides a core service as the organisation provides a platform of supplementary services delivered through informational and physical processes. As many services are entirely information based, Suncorp has shifted its focus to cater to its tech savvy demographic of 18-34-year-olds with electronic distribution channels. However, Suncorp must also consider how to maintain its reach among other demographics, especially those over 45 as many have low digital literacy or do not use digital devices (Office of the eSafety Commissioner, 2018). This indicates the older generation’s lack of confidence toward electronic services. Thus, it is recommended Suncorp evenly utilise both electronic and physical distribution channels to provide tangible information and evidence of the services they provide, in the form of electronic emails, physical mail and printed brochures that customers may refer to for confidence and help in accessing these services. To measure the effectiveness of educating and informing customers, Suncorp should conduct monthly customer surveys to identify any issues among certain customer demographics.

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4.0 References ABS (2018). Household use of information technology, Australia, 2016-17. Retrieved from http://www.abs.gov.au/ausstats/[email protected]/mf/8146.0 AFR (2017). Suncorp CEO Michael Cameron talks up ‘surprise’ $100m strategy spend. Retrieved from https://www.afr.com/business/banking-andfinance/financial-services/suncorp-ceo-michael-cameron-talks-up-surprise100m-strategy-spend-20170803-gxou4g Bitner, M. (1992). Servicescapes: The Impact of Physical Surroundings on Customers and Employees. Journal Of Marketing, 56(2), 57. doi: 10.2307/1252042 Cameron, N. (2016). How Suncorp plans to reduce churn with its connected customer strategy. Retrieved from https://www.cmo.com.au/article/600713/how-suncorp-plans-reduce-churnits-connected-customer-strategy/ Farrell, A., Souchon, A., & Durden, G (2001). Service encounter conceptualisation: employees’ service behaviours and customers’ service quality perceptions. Journal of Marketing Management. 10.1362/026725701323366944 Forster, D (2018). Managing Retail Bank Marketing and Distribution in a low growth Environment. Retail Financial Services Asia 2008. Singapore. Retrieved from https://www.suncorpgroup.com.au/uploads/fm/documents/Investor%20Relatio ns/Investor%20day/2008/Managing%20Retail.pdf Gary Armstrong, S. A. (2014). Principles of Marketing. Melbourne: Pearson Education Australia. Glassdoor (2018). Suncorp Group Reviews. Glassdoor. Retrieved 19 October, 2018, from https://www.glassdoor.com.au/Reviews/Suncorp-Group-ReviewsE38098.htm Hakala, U., Svensson, J., & Vincze, Z. (2012). Consumer-based brand equity and top-of-mind awareness: a cross-country analysis. Journal of Product & Brand Management, 21(6), 439-451.

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Hinterhuber, A. (2003). Towards value-based pricing—An integrative framework for decision making. Industrial Marketing Management, 33(8), 765-778. doi: 10.1016/j.indmarman.2003.10.006 IBISWorld. (2018, June). National and Regional Commercial Banks - Australia Market Research Report. Retrieved October 20, 2018, from IBISWorld: https://www.ibisworld.com.au/industry-trends/market-researchreports/financial-insurance-services/national-regional-commercial-banks.html Kapoor, R., Paul, J., & Halder, B.(2011). Service Marketing Concepts & practices. [EBL version]. Retrieved from https://books.google.com.au/books?id=zOcRxT2_mz8C&pg=PA17&lpg=PA1 7&dq=lovelock+people+processing&source=bl&ots=544AEVuunn&sig=h2M qG6zT3nJSZAmVIwCvc-1WfG0&hl=en&sa=X&ved=0ahUKEwjrtsuMt_7MAh WG5qYKHUUKCSs4ChDoAQgnMAI#v=onepage&q=lov...