Mind the credibility gap

5th January 2014
Hiscox

Categories:

  • Brand and values
  • Executive insight
  • Trust is a big problem facing the financial services industry. The public still trusts banks more than financial firms, according to the Edelman Trust Barometer. Many firms in our sector have reacted by launching new marketing campaigns. But insurers are trying to address their image problems through better PR, not better customer service. The one won’t work without the other.

    Having hammered home the message of how cheap insurance is for so long, many companies are changing tack in their advertising. Now, they are trying to persuade consumers what good value insurance is, by highlighting the comprehensive and high-quality service insurers offer their customers.

    That’s a step forward, because insurance is not a commodity, so it should never be marketed like baked beans. An insurance policy is a financial lifejacket for those in dire need, so it’s vital you find the one that fits you, not the one that’s cheapest.

    The problem is that the advertising messages being put out by many insurers don’t tally with consumers’ experience. Instead, customers often find call-centre staff to be unhelpful and claims handlers to be pernickety and inflexible. But unless they can live up to the promises made in their ads, insurers may further undermine the industry’s tarnished reputation.

    Steve Langan, the Managing Director of Hiscox’s UK and Irish business, says the real role of marketing is to communicate the truth about your business in a motivating and engaging way for your customer. But it has to be a truth that your customers can see and experience every day. That’s a hard thing to achieve.

    How a company behaves internally and how it acts towards its customers must confirm –rather than contrast with –the image it portrays of itself in the media. A company’s marketing department can’t work in isolation – it needs to make sure that colleagues at the coalface can deliver the promises made in the firm’s ads.

    Whenever I come up with a new marketing idea I will run it past our underwriting and claims teams, as well as our operations people and compliance specialists, because it’s crucial for us that we all agree that our messages are accurate and deliverable. After all, our strapline is “As good as our word.”

    Otherwise, you’re setting yourself up to disappoint your customers. If there continues to be a gulf between what insurers say and what they do then they will never win back consumers’ trust. If insurers fail to overcome their credibility gap, they’re doomed to lose out to those household-name brands, which consumers like and trust, that have begun moving into the financial services sector.

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