Partner Metrics: Consumer Attitudes towards Alternative Distribution Partners in UK Financial Services

Published by	Finaccord Ltd.
Published	June, 2010	Product code	124579
Content info	125 Pages
Price	US $ 3292 PDF By E-mail + Excel database (Single Office license) US $ 3950.40 PDF By E-mail + Excel database (License for multi-office in one country) US $ 4938 PDF By E-mail + Excel database (License for multi-office within 2-10 countries) US $ 6584 PDF By E-mail + Excel database (Global License - unlimited users)

Introduction
Related Reports

Partner Metrics: Consumer Attitudes towards Alternative Distribution Partners in UK Financial Services published by Finaccord Ltd. in June, 2010. This report consists of 125 Pages and the price starts from US $ 3292.

Introduction

Abstract

Partner Metrics: Consumer Attitudes towards Alternative Distribution Partners in UK Financial Services is a study of consumer attitudes towards 140 major non-financial brands in the UK, to test their willingness to acquire financial services through them. It looks at nine separate insurance and banking products, so that it can quantify the market potential for these 140 brands for specific products. In particular, it seeks to answer the following questions: how many customers does each organisation have and what is the profile of these customers in terms of their frequency of contact as well as their gender, age and household income? how much do consumers in general trust each organisation and how much do the organisations' own customers trust them? do customers currently buy insurance or banking products from these organisations? if not, what is the evidence that they are willing to do so in future? The answers to each of these questions are combined to produce an estimate for each organisation' s potential for a specific product, thus identifying where the best opportunities lie - and which should be avoided. Partner Metrics focuses on nine financial products, concentrating on the products most appropriate to each brand. The list of products and the number of organisations researched for each product is: motor insurance: 75 organisations; household insurance: 70 organisations; travel insurance :70 organisations; pet insurance: 55 organisations; accident and health insurance: 55 organisations; life insurance: 55 organisations; personal loans: 80 organisations; payment cards: 130 organisations; savings accounts: 60 organisations. Key findings from the Partner Metrics report include: high street retail brands command the highest volumes of customer relationships and the greatest level of awareness, with a much wider ' reach' than other types of organisation; Saga has the highest actual or viable cross-selling rate amongst its own customers, reaching as much as 30% for travel insurance and 40% for motor and household insurance; the two organisations with the greatest unrealized opportunity in financial services are Boots and Morrisons, with large customer bases and high levels of trust; travel agents and airlines have strong cross-selling rates for travel insurance, but hotel chains have little apparent opportunity to act as distributors of this product; The Money Shop, Western Union and the Women' s Institute all have high interest from their customers for specific products, making them interesting potential niche partners.

0.0 EXECUTIVE SUMMARY

Research background and structure
Tesco has by far the most ongoing and regular customers, with Nectar in second place
Argos has the second largest customer base, due to a large number of occasional users
Women are easier to reach through alternative distribution channels than men
The banking crisis has not benefited alternative distribution partners in general
Boots, Marks & Spencer and Amazon are the most trusted organisations across all consumers
Among supermarkets, Morrisons has risen most since 2007 while Tesco has fallen back
Toyota has become the least trusted car maker following its mass recall of faulty cars
The National Trust is the most ' trusted' of these 140 organisations while Tesco is only a few places ahead of Aldi
Fuel, gas and electricity companies tend to have low levels of trust among their own customers
Three organisations have the largest actual or viable customer bases across financial services
Saga and the AA have the best cross-selling rates among their own customers
Boots and Morrisons have the greatest untapped potential as distributors of financial services while niche partners could be valuable in some areas
Motor and travel insurance are the main areas of insurance with special distribution partners along with animal charities for pet insurance
Home furnishing and improvement companies have no strong connection to financial products

1.0 INTRODUCTION

Research rationale
- Some alternative distribution partners have become very important forces in the UK but how can the potential for new opportunities be identified?
- 140 organisations are covered in the new report compared to 80 in the 2010 version focusing on the products that are most viable for each brand
- The selected brands include proven partners plus examples to test consumers' openness of mind
Finaccord
- Partner Metrics and other studies on the distribution of financial services in the UK
- Other UK consumer research publications
- UK small business financial services research publications

2.0 CONSUMER RELATIONSHIPS AND TRUST

Introduction
- Trust is measured twice: once for all consumers, and once for an organisation' s own customers
Consumer relationships and awareness
- Results for all consumers
- Nectar has moved into third place for relationship and awareness
- High street brands outperform catalogue and online-only retailers
- Utilities have few occasional customers but many ongoing ones while prestige automotive manufacturers could exploit brand recognition
- Implied number of customers
- Retailers' customer bases are swollen by occasional customers
- The leading non-retailers are BT and Sky, but BT' s customer base is shrinking
- Tesco is the winner when size of customer base is combined with frequency of contact
- Fashion brands, charities and emergency repair companies have low frequency of contact
Customer demographics
- Gender, age and household income are the three demographic variables measured
- Ranking by gender
- Women have contact with more organisations than men
- Accessorize and ASOS.com have the highest proportion of female customers while football clubs and specific motor brands are the most ' male' organisations
- Ranking by age
- Which other organisations could repeat the success of Saga?
- There is a five year gap in the average ages of customers from Morrisons to Tesco and nearly 15 years between Adidas and Nike customers
- Aspirational motor marques attract a younger audience, creating branding opportunities
- Ranking by income
- High income brands span a wide range of industries
- Low income organisations include some of the most successful alternative distribution partners
- Western Union and The Money Shop have wider opportunities than low income customers alone
- Lakeland customers are significantly above average for both age and income
Consumer trust
- Results for all consumers
- Ryanair shows that trust matters more for cross-selling than for its core business
- The banking crisis has not benefited alternative distribution partners in general
- Boots, Marks & Spencer and Amazon remain the most trusted organisations
- Among supermarkets, Morrisons has risen most while Tesco has fallen back but Tesco and Virgin' s sustained efforts in financial services outweigh their rankings for trust
- Not all publicity is good publicity: Toyota has become the least trusted car maker
- Customers trust what they know
- Results for own customers
- Every organisation is trusted more by its own customers than by all consumers - even Ryanair
- The National Trust is the most ' trusted' of these 140 organisations while Tesco is only a few places ahead of Aldi
- Fuel, gas and electricity companies tend to have low levels of trust among their own customers
- Saga has a high level of trust on a relatively small customer base

3.0 PRODUCT ANALYSIS

Introduction
- The potential customer base for nine products is calculated in this chapter
Motor insurance
- Results for all consumers
- The AA, RAC and Tesco are the best partners for motor insurance
- Halfords and Autoglass could consider entering this market - along with Top Gear car insurance?
- Results for own customers
- Saga and the AA have the best cross-selling rates for motor insurance
- The Money Shop could be a potential distributor for liability-only insurance
- Implied number of actual and viable customers
- The size of existing customer bases means that retailers have the most potential
- Mercedes and Toyota have the best cross-selling rates among motor manufacturers
Household insurance
- Results for all consumers
- The Co-operative and Tesco are the leading brands for household insurance
- Retailers with a focus on household goods do not dominate household insurance
- Results for own customers
- Saga has by far the best cross-selling rate for household insurance while the Women' s Institute and Mercedes have a high level of potential interest
- Implied number of actual and viable customers
- Morrisons overtakes Mercedes when counted by viable customer numbers
- Utilities have a better potential for cross-selling household insurance than ' home goods' retailers
Travel insurance
- Results for all consumers
- The Post Office, The Co-operative and Tesco still head the pack for travel insurance with three travel companies also in the top ten but seven travel-related companies have a negative score among all consumers
- Results for own customers
- Travel companies are the best at cross-selling travel insurance, with Saga far in the lead
- Hotel chains have little appeal as distributors of travel insurance
- Implied number of actual and viable customers
- Marks & Spencer and Nectar have a significant opportunity to expand in travel insurance
- Travel companies should aim for 20% actual or viable cross-selling of travel insurance
Pet insurance
- Results for all consumers
- Animal charities are the most favoured providers - even if they do not currently offer pet insurance
- The Co-operative, Morrisons and Boots could exploit opportunities in pet insurance
- Results for own customers
- Morrisons' and Boots' own customers are less interested in pet insurance than all consumers
- Implied number of actual and viable customers
- ASDA achieves its highest ranking for actual and viable customers for pet insurance and Virgin also combines a large customer base with relatively high interest for pet insurance
Accident and health insurance
- Results for all consumers
- Accident and health insurance partnerships are under-developed although current and past sales have not been high
- Results for own customers
- The Money Shop and the Women' s Institute have interest from their own customers
- Specialist health, beauty and sports organisations have little opportunity in accident and health
- Implied number of actual and viable customers
- Boots has the largest viable customer base
- Major retail brands should be the target for partnerships ahead of niche organisations
Life insurance
- Results for all consumers
- Only The Co-operative has a positive score across all consumers
- Saga and Age UK could introduce term life for older customers
- Results for own customers
- The Money Shop and the Women' s Institute join Saga and Age UK with high cross-selling potential
- Implied number of actual and viable customers
- A provider targeting older customers could find more than a million viable customers
- Will Tesco' s new partnership with Friends Provident realize the opportunity in life insurance?
Personal loans
- Results for all consumers
- The same partners lead for banking products as for insurance but none has a strong appeal among consumers in the current lending climate
- Results for own customers
- Western Union and American Express are the leading opportunities for new partners
- Prestige motor manufacturers can sell loans more successfully than mass market brands
- Implied number of actual and viable customers
- Tesco Bank has a large potential customer base in personal lending
- Nectar, Boots, Morrisons and Sony each have more than a million viable customers for loans
Payment cards
- Results for all consumers
- Tesco, Virgin and Marks & Spencer are the leaders for new card sales
- Charities, football clubs and lifestyle organisations' cards have less appeal than retailers' cards
- Results for own customers
- New opportunities are limited - partners with a high potential for cross-selling have few customers
- Prepaid cards are becoming more popular, for foreign exchange and to avoid debt
- Implied number of actual and viable customers
- Boots, eBay, Morrisons and Currys have the largest viable customer bases
- An iTunes card could sell better than an Apple card
- Payment cards are ideally suited to Tesco, as a retailer with all-round strength in financial services
Savings accounts
- Results for all consumers
- The credit crisis has not led consumers to turn to alternative distributors for savings accounts
- Results for own customers
- High and low income customers have an interest in savings accounts but people planning home improvements do not wish to save through relevant retailers
- Implied number of actual and viable customers
- Consumer interest implies that Tesco and Virgin can fund their lending from retail deposits but the credit crisis may not have helped them as much as they could wish

4.0 APPENDIX

Research sample and mechanics
Research methodology and structure

GRAPHICS / TABLES

List of 140 major brands and organisations evaluated by the research
Ranking of 140 partner organisations by consumer relationships and awareness, 2010 (1-50)
Ranking of 140 partner organisations by consumer relationships and awareness, 2010 (51-100)
Ranking of 140 partner organisations by consumer relationships and awareness, 2010 (101-140)
Implied number of adult customers of 140 partner organisations, 2010 (1-50)
Implied number of adult customers of 140 partner organisations, 2010 (51-100)
Implied number of adult customers of 140 partner organisations, 2010 (101-140)
Implied customer base versus frequency of customer contact for 140 partner organisations, 2010
Ranking of 140 partner organisations by gender of own customers, 2010 (1 to 50)
Ranking of 140 partner organisations by gender of own customers, 2010 (51 to 100)
Ranking of 140 partner organisations by gender of own customers, 2010 (101-140)
Ranking of 140 partner organisations by average age of own customers, 2010 (1 to 50)
Ranking of 140 partner organisations by average age of own customers, 2010 (51 to 100)
Ranking of 140 partner organisations by average age of own customers, 2010 (101-140)
Ranking of 140 partner organisations by average household income of own customers, 2010 (1 to 50)
Ranking of 140 partner organisations by average household income of own customers, 2010 (51 to 100)
Ranking of 140 partner organisations by average household income of own customers, 2010 (101-140)
Implied average age of customers plotted against implied average household income across all customers of 140 partner organisations, 2010
Implied number of customers plotted against score for trust across all consumers of 140 partner organisations, 2010
Ranking of 140 partner organisations by trust of all consumers, 2010 (1 to 50)
Ranking of 140 partner organisations by trust of all consumers, 2010 (51 to 100)
Ranking of 140 partner organisations by trust of all consumers, 2010 (101-140)
Implied number of customers plotted against score for trust across own customers of 140 partner organisations, 2010
Ranking of 140 partner organisations by trust of own customers, 2010 (1 to 50)
Ranking of 140 partner organisations by trust of own customers, 2010 (51 to 100)
Ranking of 140 partner organisations by trust of own customers, 2010 (101-140)
Ranking of 75 partner organisations by actual and potential usage of all consumers to purchase motor insurance, 2010 (1 to 50)
Ranking of 75 partner organisations by actual and potential usage of all consumers to purchase motor insurance, 2010 (51 to 75)
Ranking of 75 partner organisations by actual and potential usage of own customers to purchase motor insurance, 2010 (1 to 50)
Ranking of 75 partner organisations by actual and potential usage of own customers to purchase motor insurance, 2010 (51 to 75)
Implied number of own customers plotted against percentage of these that are actual or viable customers for motor insurance of 75 partner organisations, 2010
Implied number of actual and viable customers for motor insurance of 75 partner organisations, 2010 (1 to 50)
Implied number of actual and viable customers for motor insurance of 75 partner organisations, 2010 (51 to 75)
Ranking of 70 partner organisations by actual and potential usage of all consumers to purchase household insurance, 2010 (1 to 50)
Ranking of 70 partner organisations by actual and potential usage of all consumers to purchase household insurance, 2010 (51 to 70)
Ranking of 70 partner organisations by actual and potential usage of own customers to purchase household insurance, 2010 (1 to 50)
Ranking of 70 partner organisations by actual and potential usage of own customers to purchase household insurance, 2010 (51 to 70)
Implied number of own customers plotted against percentage of these that are actual or viable customers for household insurance of 70 partner organisations, 2010
Implied number of actual and viable customers for household insurance of 70 partner organisations, 2010 (1 to 50)
Implied number of actual and viable customers for household insurance of 70 partner organisations, 2010 (51 to 70)
Ranking of 70 partner organisations by actual and potential usage of all consumers to purchase travel insurance, 2010 (1 to 50)
Ranking of 70 partner organisations by actual and potential usage of all consumers to purchase travel insurance, 2010 (51 to 70)
Ranking of 70 partner organisations by actual and potential usage of own customers to purchase travel insurance, 2010 (1 to 50)
Ranking of 70 partner organisations by actual and potential usage of own customers to purchase travel insurance, 2010 (51 to 70)
Implied number of own customers plotted against percentage of these that are actual or viable customers for travel insurance of 70 partner organisations, 2010
Implied number of actual and viable customers for travel insurance of 70 partner organisations, 2010 (1 to 50)
Implied number of actual and viable customers for travel insurance of 70 partner organisations, 2010 (51 to 70)
Ranking of 55 partner organisations by actual and potential usage of all consumers to purchase pet insurance, 2010
Ranking of 55 partner organisations by actual and potential usage of own customers to purchase pet insurance, 2010
Implied number of own customers plotted against percentage of these that are actual or viable customers for pet insurance of 55 partner organisations, 2010
Implied number of actual and viable customers for pet insurance of 55 partner organisations, 2010
Ranking of 55 partner organisations by actual and potential usage of all consumers to purchase accident and health insurance, 2010
Ranking of 55 partner organisations by actual and potential usage of own customers to purchase accident and health insurance, 2010
Implied number of own customers plotted against percentage of these that are actual or viable customers for accident and health insurance of 55 partner organisations, 2010
Implied number of actual and viable customers for accident and health insurance of 55 partner organisations, 2010
Ranking of 55 partner organisations by actual and potential usage of all consumers to purchase life insuranc, 2010
Ranking of 55 partner organisations by actual and potential usage of own customers to purchase life insurance, 2010
Implied number of own customers plotted against percentage of these that are actual or viable customers for life insurance of 55 partner organisations, 2010
Implied number of actual and viable customers for life insurance of 55 partner organisations, 2010
Ranking of 80 partner organisations by actual and potential usage of all consumers to take out a personal loan, 2010 (1 to 50)
Ranking of 80 partner organisations by actual and potential usage of all consumers to take out a personal loan, 2010 (51 to 80)
Ranking of 80 partner organisations by actual and potential usage of own customers to take out a personal loan, 2010 (1 to 50)
Ranking of 80 partner organisations by actual and potential usage of own customers to take out a personal loan, 2010 (51 to 80)
Implied number of own customers plotted against percentage of these that are actual or viable customers for personal loans of 80 partner organisations, 2010
Implied number of actual and viable customers for personal loans of 80 partner organisations, 2010 (1 to 50)
Implied number of actual and viable customers for personal loans of 80 partner organisations, 2010 (51 to 80)
Ranking of 130 partner organisations by actual and potential usage of all consumers to take out a payment card, 2010 (1 to 50)
Ranking of 130 partner organisations by actual and potential usage of all consumers to take out a payment card, 2010 (51 to 100)
Ranking of 130 partner organisations by actual and potential usage of all consumers to take out a payment card, 2010 (101 to 130)
Ranking of 130 partner organisations by actual and potential usage of own customers to take out a payment card, 2010 (1 to 50)
Ranking of 130 partner organisations by actual and potential usage of own customers to take out a payment card, 2010 (51 to 100)
Ranking of 130 partner organisations by actual and potential usage of own customers to take out a payment card, 2010 (101 to 130)
Implied number of own customers plotted against percentage of these that are actual or viable customers for payment cards of 130 partner organisations, 2010
Implied number of actual and viable customers for payment cards of 130 partner organisations, 2010 (1 to 50)
Implied number of actual and viable customers for payment cards of 130 partner organisations, 2010 (51 to 100)
Implied number of actual and viable customers for payment cards of 130 partner organisations, 2010 (101 to 130)
Ranking of 60 partner organisations by actual and potential usage of all consumers to take out a savings account, 2010
Ranking of 60 partner organisations by actual and potential usage of own customers to take out a savings account, 2010
Implied number of own customers plotted against percentage of these that are actual or viable customers for savings accounts of 60 partner organisations, 2010
Implied number of actual and viable customers for savings accounts of 60 partner organisations, 2010
Sample breakdown by age group, household income band and geographical location