When is water more than just water? Ask the billion-dollar beverage brand Liquid Death. Between 2022 and 2023, Liquid Death’s retail sales grew 100% from $110 million to $263 million. The brand’s valuation is now double what it was worth in 2022. This warp-speed trajectory is particularly remarkable when you consider what Liquid Death sells: water.
Category: Finance
Finding the path to sell a commoditized product
Commodity products are particularly difficult to make appealing.
Examples are everywhere – there’s only so much you can do to differentiate a paper towel. And it’s even more difficult to turn a commoditized service or product into an appealing tool in the B2B world.
In this case study, we explore how we used a unique mix of expertise, client consultation, and digging deep with research to find a path to help insurance professionals see beyond price for a commodity Term Life product.
Our Fortune 500 Life Insurance client came to us with a conundrum:
Their Term Life product was especially hard to sell. Our client’s Term Life Insurance product carried a higher price and slightly lower commission than others.
They needed to find a way to make it appealing for Brokerage General Agency (BGA) and Insurance Marketing Organization (IMO) financial professionals. They knew this was a challenging business request, principally because the Term Life insurance marketplace is driven by price.
How do you garner interest from BGAs and IGOs in selling an undifferentiated commodity? What matters beyond price?
Our job:
Understand if and how this Term Life product, despite its higher price and lower commission structure, could have producer appeal.
So, we started with the basics – the landscape of the sales environment for BGAs and IMOs. What are the core decision making criteria for all products they carry? What are specific components of the product-selling experience that had the greatest impact on choice and promotion? We explored underwriting, ease of doing business, advanced sales support, and client confidence in the insurance brand itself.
By taking this approach, we identified the specific BGA and IMO producer profile that would be interested in presenting and promoting this product.
What we learned was an ah-ha for the client:
Term Life Insurance is not completely price dependent if it’s being presented and sold as part of a long-term client relationship.
When a long-term relationship is at stake, the product is part of a value-added portfolio. In this case, it’s not just a stand-alone product. It’s an important component of a long-term financial plan and strategy. Then we tied it to our client’s specific Term Life product and found the features of this premium product did, indeed, provide for long-term financial planning to take place.
The re-positioning of Term Life insurance from “commodity” to “value-added financial vehicle” allowed respondents to accept the possibility of a higher price.
But that was not all.
We identified the target segment.
The BGA and IMO producers who will be most likely to embrace this premium Term Life insurance product are those who have a long-term life and financial planning relationship with their clients. These are producers who provide investment strategies. They don’t sell products. They aren’t in it for a sale.
This target segment is in it to build a mutually successful long-term relationship with their clients.
This research helped our clients see how their product did have a place in the market, despite its start as a “no” for BGAs and IMOs.
We counseled them to adjust the thinking and strategy behind this product to focus on presenting it as part of a more holistic financial relationship. Our client undertook follow-up research with the target segment to gain a deeper understanding of how to position this Term Life insurance product. We were asked to lead this follow-up study.
We helped them find the path to success.
Working Together in a True Partnership Allowed Us to Uncover and Articulate the Core Motivating Factors of an Agent and Broker Relationship
Financial Services
A leading property casualty and insurance company trusted our insight and experience to help them uncover what makes a lasting, positive agent and broker experience. Our industry experience allowed us to have deeper, more meaningful conversations and dialogue throughout the process, which in turn, created a trust-based partnership. Having that partnership allowed us to make adjustments in real-time to uncover the core motivators.
Understand.
A leading Property & Casualty Insurance Company wanted to deliver a differentiated experience for its agent/broker partners. The business goal was to deliver an experience that would have a lasting impact on securing higher levels of business placement and retention. Our research goal was to understand what that optimal experience looked like.
Design.
In advance of this study our client undertook an extensive internal touchpoint mapping exercise. Internal stakeholders helped create a multi-phased linear map that articulated assumed needs and preferences at each phase of the map. Our initial charge was to use the touchpoint map as a reference to guide our discussions. We also had the charge to be as inclusive and broad as possible during our discussions. All told, we talked, in-person, with nearly 150 brokerage owners, sales agents, and support reps. We talked with those who represent both large and medium brokerages in 6 markets nationally. Our reach was truly representative of our audience.
Execute.
What became obvious during our initial discussions with agents is that they see their carrier interaction differently than the linear touchpoint map that was developed as our guide. For agents, relationship and engagement is not a defined stage; rather, it is the field on which all interaction takes place. Using this foundational insight as our new guide–and with the full support of our client–we incorporated a model that continually modified and adjusted our discussion approach based on the insights we gained. At the heart of our revised approach was the recognition that we were now focused on customer journey, not touchpoint mapping.
Analyze & Advise.
The core insight that guided our recommendations is that Underwriters are the face of a carrier. Their efforts strongly shape agent perceptions and are the key to agent placement, retention, and growth. When agents feel underwriters are not in partnership with them, the entire relationship can turn adversarial. Ultimately, our recommendation on how to deliver a superior underwriting experience served as the basis for our client’s development of a differentiated brand experience.
Knowing When to Pivot During the Course of an Interview Allowed our Financial Services Industry Veterans to Uncover Influential Target Audiences
Financial Services
Knowing the industry and being able to pivot and probe in real-time allowed us to make important changes during the research. We were able to more effectively test, inform and refine ideas conceived of in a conference room so they reflected the real-world of not only marketing and selling software products but of building partnerships with new customers.
Understand.
A major financial services company wanted a deeper understanding of who their potential target audience would be for a new software product. They needed to understand their pain points, needs and what their decision-making process looks like. The client needed a partner to be able to see beyond the standard purchase journey research. They were looking for a partner that would translate their needs to a new audience.
Design.
This research was designed to be flexible and responsive to what we heard as the project unfolded. By leveraging our relationship with the recruiter, through regular communications with the client, and because of our commitment to having conversations versus typical interviews, we were able to find the purchase influencers. Once the audience was defined, we were able to dig deeper to reveal the influence model and the specifics of the software purchase process.
Execute.
Our intentionally iterative approach tested the client’s initial presumptions while refining and focusing both the recruiting and probing to get a complete and accurate picture. Specifically, an early pivot in recruiting directed the research to a particular role in the purchase process – the key influencer who is trusted and tasked by all sides to collate the information and make specific software purchase recommendations.
Analyze & Advise.
In the end, we delivered the client’s two must-haves – a detailed software purchase journey and specific personas for their target audience. More than that, however, our commitment to seeing beyond the nuts and bolts of standard purchase journeys revealed insights into meaningful ways to engage their customers in a partnership – ways to build marketing strategies for the long term.
Anonymity Creates Safe Space for Discussing Non-Traditional Lending Experiences
Financial Services
Kip Brown combined his curiosity of human motivation with his financial services experience to fully interpret what small business owners think about non-traditional lending options and what a government agency can do to make the lending experience a more positive one.
Understand.
A governmental agency had an interest in understanding the financial policies and practices that promote or impede access to credit for small businesses. Of particular interest was a desire to explore small business owners’ understanding and consideration of emerging, non-traditional lending sources. At the heart of this study was the need to intimately understand the unique stresses and problems associated with small business owners’ ability to access credit, and how these challenges impact motivation, preference and choice, especially around non-traditional (online) lending sources.
Design.
With over 30 million small businesses in the US, this study required that we talk with a broad and diverse group of small business owners. We also needed to conduct this research within a methodology that allowed for interactivity as well as confidentiality. And, given these business owners’ varied schedules and hours, we needed to provide for as much participation flexibility as possible. To accomplish all of these needs, we recommended the use of online bulletin boards. The boards were segmented by current non-traditional online lending use to give us an in-depth understanding of how participants’ use and experience influenced their perceptions and consideration.
Execute.
Using our knowledge of the category and the small business segment, we created an open and engaging participation experience for our panel. The online bulletin board platform offered multiple levels of interaction; the Moderator was able to point participants to online resources and offer opportunities for both breakout groups and individual discussions. The synergy it created was very similar to the synergy created in face-to-face focus groups with the added advantage that owners felt safe to openly discuss sensitive personal and business information based on the anonymity the platform provided.
Analyze & Advise.
The research helped clarify the reality that non-traditional lending options are both seductive and confusing. This duality, combined with a clearly articulated concern by owners that non-traditional lending options may be less secure than traditional options, gave rise to a series of recommendations that focused on creating higher levels of lender consistency around security, disclosure, and terminology. The end result was a high level of confidence among our client’s stakeholders that user needs had been heard and changes could be made to positively impact the lending experience for small business owners.
What is SWIFT? A Primer for Non-Finance Folk
The Russian invasion of Ukraine has been met with sanctions from the West, including exclusion of select Russian banks from the SWIFT financial messaging system. But the concept of SWIFT is unfamiliar to most, and many more know it only at the highest level. As the news in Ukraine continues to unfold, here’s what you need to know about SWIFT, and why it matters.
What is SWIFT?
SWIFT is the Belgian-based Society for Worldwide Interbank Financial Telecommunication. In the simplest terms, it’s the telecommunication system financial institutions around the world use to communicate with one another. Each financial institution has a code that transmits along with the transactional information to create a fast, secure connection anywhere in the world. In short, it’s a big part of what makes moving money around the globe happen.
SWIFT is for any international financial transaction. Banks, brokerages, clearing houses, asset managers, corporate treasurers, and more all use SWIFT. SWIFT is not a financial institution itself – it is the communication mechanism on which the thousands of financial institutions relies.
What is the impact of removing Russian banks?
Without SWIFT, transactions are slower and more manual. The inability to use SWIFT means financial transactions become more expensive.
But the excluded Russian banks could also move to an alternative system. SWIFT is the dominant player, but not the only one. In fact, China has its own system, called Cross-Border International Payments System (CIPS), and will likely generate new business from Russia because of the actions to revoke access to SWIFT. This could bifurcate global banking as some nations will favor CIPS and some will favor SWIFT. How that resolves is anyone’s guess.
For now, it means everything will get a little more expensive.
What does this mean to US financial institutions?
From a risk management perspective, banks must consider financial risk but also reputational risk in how they not only act, but in how they message their actions to their customers. It’s imperative financial institutions monitor the pulse of their consumers and assess the reputational impact of their overall decisions on consumer perspective. Time to ask your customers what they think, how they feel, and what they expect from their financial institutions in this time of financial war.
Do you have more questions?
I’m happy to discuss! Feel free to reach out to me at steve.mosshamer@thinkpiecepartners.com.
There are also great resources to read more about the topic:
https://www.cips.com.cn/en/index/index.html
https://www.investopedia.com/articles/personal-finance/050515/how-swift-system-works.asp
https://www.nytimes.com/2022/02/26/us/politics/eu-us-swift-russia.html
Small Business Stress
Financial Services
Kip Brown combined his curiosity of human motivation with his financial services experience to fully interpret what small business owners think about non-traditional lending options and what a government agency can do to make the lending experience a more positive one.
Understand.
A governmental agency had an interest in understanding the financial policies and practices that promote or impede access to credit for small businesses. Of particular interest was a desire to explore small business owners’ understanding and consideration of emerging, non-traditional lending sources. At the heart of this study was the need to intimately understand the unique stresses and problems associated with small business owners’ ability to access credit, and how these challenges impact motivation, preference and choice, especially around non-traditional (online) lending sources.
Design.
With over 30 million small businesses in the US, this study required that we talk with a broad and diverse group of small business owners. We also needed to conduct this research within a methodology that allowed for interactivity as well as confidentiality. And, given these business owners’ varied schedules and hours, we needed to provide for as much participation flexibility as possible. To accomplish all of these needs, we recommended the use of online bulletin boards. The boards were segmented by current non-traditional online lending use to give us an in-depth understanding of how participants’ use and experience influenced their perceptions and consideration.
Execute.
Using our knowledge of the category and the small business segment, we created an open and engaging participation experience for our panel. The online bulletin board platform offered multiple levels of interaction; the Moderator was able to point participants to online resources and offer opportunities for both breakout groups and individual discussions. The synergy it created was very similar to the synergy created in face-to-face focus groups with the added advantage that owners felt safe to openly discuss sensitive personal and business information based on the anonymity the platform provided.
Analyze & Advise.
The research helped clarify the reality that non-traditional lending options are both seductive and confusing. This duality, combined with a clearly articulated concern by owners that non-traditional lending options may be less secure than traditional options, gave rise to a series of recommendations that focused on creating higher levels of lender consistency around security, disclosure, and terminology. The end result was a high level of confidence among our client’s stakeholders that user needs had been heard and changes could be made to positively impact the lending experience for small business owners.
Find us at Forum 2022
Connect with the Thinkpiece finance team at the Financial Brand Forum 2022, hosted at the Aria in Los Vegas, November 13- 16. Let’s talk all things finance, and explore your research needs. Enter to win a fantastic give-away when you stop by our booth #953 to take a quick survey on finance research. We’ll also send you a copy of our report on survey findings at the end of the show.