Sunday, October 17, 2010

Some things never change...

Over the past weeks, there have been new branding campaigns for LIC and Indian Railways.. So, what's the similarity in both apart from the image or reality that they are government organizations??

I have seen the website of LIC over the past 2years. Till a couple of months back, it had remained the same slow, erroneous, semi-updated kind. The premium calculator that gives quotes whenever it feels like, the speed is definitely so slow that can make you sleep by the time a brochure opens up. But, I have seen it yesterday post the new campaign from LIC about the online services, payments etc and the change is amazing. It's a perfect 10 on 10. LIC has definitely got it right on making sure that, it is in line with what it has been advertising.

But, there was another campaign too. That's about it's wonderful polices and why go anywhere else?? when you have LIC... Yes, it has some of the best policies in the Life Insurance space.. Yes, it might have had or not in reality but, yes, definitely deep inside the layers of some customers brain/

memory/mind.. whatever you call it. The campaign makes sense and this would have worked better off a couple of years back but, might not be in today's changing India.Financial Literacy ratio in India had been on an upward slope since the past 2years and many of those who never understood A,B,C of Insurance and Investments today would explain different concepts of planning better than those number of trained Agents. Ofcourse, the ratio we are speaking of is still low. But, we need to understand that it is on an upward slope and especially with the fighting regulators the pace will grow further. Hence, it is very important for you to understand what have you been suggesting the customer today. Else, once he/she is educated in the next 4-5 years he will look back and say

what crap am I holding since past years?? This is what many say today which they held due to pressure from Dad, Uncle or friend. Obvioulsy, after 4-5 years a person might understand that a term plan would make a better Insurance and he would be satisfied if the ULIP he would have held has given atleast comparable returns within it's peers and Endowments would be nowhere on that day. If not exactly 4-5 years, it will happen 10years down the line depending on how fierce would the regualtor and companies battles are..

A similar mistake was done a couple of years back by a player called Aegon Religare. It has come out with what a financially literate customer would love and is in line with reality..

A lovely and superb campaign "KILB?? Kam Insurance Lene ki Beemari.." This has educated many customers to a certain extent on understanding how much cover should they have and why??

But, the company should have understood that a person whose Human Life Value would have been 50Lakhs would not have enough income to pay 3Lakhs a year to take an endowment plan or ULIP that can give 50Lakhs cover. And term plan would be the only solution available at 10,000 per Annum to give a 50Lakhs cover. What happened next is a disaster for the company but, an easy sale for the industry without advertising. The term plan sales picked up across the industry and better off than what Aegon could sell

.. Why??

1.Aegon is relatively a new player in the Indian market, 2.Term plans are always compared on premium as there is no return of premium in pure term plan and Aegon is not the cheapest. If it's not the cheapest why should I go with a new player. And the first thing many customers did was to check quotes from LIC as well as other major palyers and settled on one. Yes, this campaign gave Aegon a really good brand coverage but, the brand image it gained versus the potential business it lost doesn't seem too good for me. What should have been the strategy??

It should have built up a decent brand name and then post that come out with KILB offering the cheapest term plan or atleast a competitive quote.Coming back to LIC, neither does it have low quotes for term plans nor does it have the best or competitive returns on it's ULIPs?? What would the customer be happy for 4-5/10 years down the line. For paying higher premium on term or for not getting comparative returns on ULIPs or for holding those endowments with least returns?? And is it worth to come out with a campaign "Why go anywhere else?" in such a situation similar to that of Aegon 2years back. It could have definitely come up with better products and offerings before saying, "why go anywhere else??"

And the same goes with Indian Railways.. With it's new campaign on cleaner and better railways to attract tourists during CWG is wonderful.. But, is it cleaner and better. The reality doesn't seem to be so. And should the tourists really carry back an image that was quoted by an Indian official last month, "Everyone has different standards of cleanliness.." And Mr.tourist, the wonderfully red colored pan marks and the over dumped garbage can are the extra cleaner and better railways and this is our standard of cleanliness???

If it comes to a new branding exercise within the country, apart from cleanliness are those train accidents / derailments once in every week as well as the controversy surrounding the ad that “No female is included in the human train”, “The ad is copied from an old ad for Hong Kong railways”

Why can't the LIC come on with better solutions and advertise or Why can't Indian railways cleanup and then advertise it as cleaner and better?? Why are they getting on to the same levels like BSNL (the broadband campaign & the agony of Internet connection) that takes 10days to a month to get a broadband connection but, advertises as the superior one with a bad quality??


Might be some things never change...


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