Part 1 : Introduction

In the (post-)crisis era, challenging the status quo

through innovation will be critical to restore profitability

in the financial sector. The commoditisation of products

within the industry is making it very difficult to compete

on price. Moreover, a whole array of non-banking

entities is entering the market to close the gap between

the offerings of banks and the needs of customers.

Suddenly, banks face competition from telcos,

supermarkets, tech firms and innovative start-ups, all

experienced in building online relationships and

developing and marketing transparent products.

In this paper we explain how financial institutions

can install structural collaboration

trajectories with key stakeholders (consumers,

employees, management) in order to develop true value

propositions consumers are willing to pay for.

What to expect?

Time to innovate is NOW!

“Customers judge across their entire set of

experiences rather than just comparing your

organization to others like it. We want our

technology to be as intuitive and user-friendly as

Apple products, the service we receive to be as

thoughtful as we might get from Nordstrom, and

personalization and ease of payment as good as

Amazon’s” (Forbes, Rita McGrath, Five Big Trends in Business Innovation in 2012).

So from a bank‟s point of view the competitive frame

of reference has expanded considerably and at a

frightening pace.

As a result, only financial institutions which

invest in service innovations taking

advantage of a profound understanding of

consumer needs and demands will be able to

outperform competition. (IBM Institute for

Business Value 2010)

However… …impediments to innovate are probably more persistent in the financial sector than in any other industry. Strict

regulations, low margins, legacy, long time to market, focus on short-term financial success, commoditisation of

services & products, IT-driven NPD, lack of organisational structures & funds fostering innovation… most often result in

banks embracing the opposite of an open-innovation-minded culture. (Accenture Research, 2010)

With the rise of web 2.0 and social media, new

tools are available for organisations to facilitate

open innovation and structural collaboration

processes. In the next chapters, we explain why

and how to install structural

collaboration trajectories with internal

and external stakeholders (consumers,

employees, management), what the keys to

success are and the implications for the

organization. We end with concrete cases in the

telco, aviation and financial sector.

Here’s the

solution!

Part 2 : Structural Collaboration

Power to

the people

When we talk about open

innovation or structural

collaboration, we refer to the

integration of the voice of

the customer in all decision-

making flows of your

company. In most companies,

customers are only allowed to

give their feedback at the very

end of a decision-making flow

through traditional market

research. This paper gives

insights on how to involve

the customer in every single

phase of the decision-

making flow on an on-going

basis. Currently, only 3% of all

companies have experience

with developing new products

and services with their

consumers.

In most cases, this

collaboration starts with a pilot

project. If the test is

successful, the collaboration

can gradually be built up in a

more structural manner. Less

than one out of ten companies

which co-create with their

customers also uses this

collaboration for launching new

products or services. We could

say that the focus of co-

creation is mainly on the

initiation of new ideas. But

even if consumers are more or

less continually involved in the

process of dreaming up new

ideas, this is still not enough to

allow us to speak of „structural

collaboration‟.

Structural collaboration means that the customer is

involved in all aspects of your company’s life. This includes:

1. Getting new insights: Exploration of the target group. Listen directly to how

they perceive the product and service quality in order to optimize the commercial

portfolio. This also implies discovering new market trends and unmet needs from

your most relevant customers.

2. The development of new ideas and fine-tuning of existing ideas:

Create new commercial value together with the customer.

3. Key role during implementation: Include customers during the

implementation phase to make sure that your interpretation of their ideas is correct.

4. Continuous evaluation and optimization: Use the customer‟s voice as a

continuous flow of information to improve loads of smaller, tactical issues and to re-

shape the future of your company, your customer being your primary consultant.

Overview of structural collaboration and business issues

And it pays off: a recent article in the

„Harvard Business Review‟ claimed

that companies are more able to

solve all their main business

issues if they collaborate closely

with their consumers. The good

news is that consumers are also

willing to help companies out with

this: more than half of them want to

collaborate with one of their

favourite brands on one or more of

these issues. The goal of this paper

is to look into the necessary

ingredients for a company to

structurally get the consumer on

board.

The objectives of structural collaboration

Based on 17 interviews with senior executives of (global) brands from different industries, we came to the

conclusion that companies that are working on structural collaboration with their customers have four clear

objectives in mind with this approach:

1. Create better products, improve the

customer service and communicate in a

more impactful way. This is by far the most

important objective for large brands in order to

collaborate with consumers. By succeeding in this

objective, the overall performance of the

organization will increase.

2. Become more agile. By involving customers in

every phase of a decision-making chain, things

move faster. Companies can make better

decisions more rapidly and have a better feeling of

what will be needed to be equally successful in the

future. A big plus in today‟s fast-moving world.

3. Add consumer feeling to the gut feeling. A lot of

managers rely on their gut feeling, which is wonderful.

Structural collaboration should add „consumer feeling‟ to

it. By collaborating so often, managers create the ability to

put on the consumers‟ hat during a meeting and think as

the consumer. Which helps them to make more

consumer-relevant choices.

4. Marketing & PR. Companies that are listening and

that involve consumers in decision-making are popular

nowadays. Tell all your customers that you take decisions

based on consulting other customers, and they will like

you more. Leveraging the internal collaboration platforms

towards the external communication has an impact on the

overall perception. This is not the main goal, but a very

welcomed indirect effect.

An evolution,

not a revolution

It‟s clear that structural collaboration with consumers is

not about having the right technology to make it

happen. It is about a mentality shift for most

organisations. A shift from a „we know best‟ attitude

towards an open mentality. The most beautiful result

of collaborating companies is the creation of what we

just called the „consumer feeling’. Adding the

consumer feeling to the gut feeling of companies is

the biggest change one can achieve through structural

collaboration.

To reach this situation, a number of steps need to be

taken. Based on our research, we learned that all

companies started small and evolved towards bigger

and bigger collaboration projects. In the end,

collaboration was really embedded in their organization.

It was a process of change, not a revolution.

The evolution towards structural collaboration happens

in three steps:

1. Collaboration always starts with a first-time try out. Companies organize a co-creation project in which

they allow the customer to participate in one specific project. Most frequently occurring examples are co-

creation of a new product, a new package or new marketing communication.

2. If this try-out is experienced as a success, the second step is to apply collaboration on a project-based

level in the organization. In this stage, companies have the habit to involve customers in every

important new project they work on.

3. After a while, it becomes hard for them to take decisions without the voice of the customer during the

process and they decide to collaborate structurally.

Three pillars for structural

collaboration with your customers

1 Select the right participants

In our opinion there are two types of - meaningful -

structural customer collaboration : an open online

platform where everyone can participate and a

closed online community where you select the

people to join in. In the large open communities you

have little direct control over who joins and who

doesn‟t. The members come together in a

very spontaneous way to discuss particular

subjects of their interest. Your role with

regards to these people is simply to listen. This will

allow you to discover a series of unfulfilled market

needs, which may eventually lead to new products

and services. Of course, you are also free to ask

them questions, but you should always remember

that these are open communities - anyone else

might be listening to their answers!

Companies that want to involve the customer in

more strategic decisions and that have a need for in-

depth feedback, tend to work with a closed online

community with a limited number of relevant

customers. If you want to solve a specific

management problem, it is better to discuss possible

solutions with a smaller, closed group of between 50

and 150 of people with a keen interest for your

category. It could also be a group of your most

ardent fans, fans you have carefully vetted and

selected yourself. The major advantage of this

approach is that you have everything in your own

hands - and this is advisable if you don‟t want the

whole world to know what decisions are being taken.

Having said that, it is important to acknowledge that not

every customer will be able - or is suitable - to help you

solve management problems. To give your company

access to the right advice on a daily basis, you need to

listen to the right (and relevant) people. For your

communities you should seek to attract people who

can offer added value. The minimum condition is

that they have a clear commitment to the

company and what it stands for. They may be experts

in the sector, knowledgeable and enthusiastic amateurs

in the sector or just big fans of your brand.

Research has shown that without this kind of

emotional commitment people seldom are

interested enough to contribute effectively to an

online community. In other words, you need to

talk to people who are interesting and

interested. If they don‟t have an opinion or if

the natural motivation to take part is missing,

your community will not achieve what you want it

to achieve. But natural engagement is not

sufficient, in order to make your community a real

success you need to manage it well. Several

things are important: be open and transparent

about the goals of each project, listen actively

(allow participants to put their issues on your

agenda too), make it a fun experience (after all

people are doing this in their spare time) and give

enough feedback on what you did with their

answers.

1 Select the right participants

2 Internal communication is not enough

Internal = External

Managers show more interest in a project or

approach which gets external credits than in a

project with a sole internal focus. In other

words: make sure your structural

collaboration is not completely taking

place behind the scenes of your

organization.

Sharing your collaboration work with the whole

organisation and the rest of the world has several

advantages. Next to an increase in motivation of your

management, it will also increase the motivation of your

communities‟ participants. Further, research has shown

that consumers have a higher trust level towards and a

better perception of co-creating brands. So, there is also a

commercial benefit to leveraging your efforts externally.

Meet-up with participants:

Collaboration occurs on a

digital platform but it is an

interaction between people.

To increase the interaction

and the emotional bonding,

make sure your employees

meet up with these people in

the real world as well. Show

them around in your company,

tell them your challenges and

treat them like part-time

employees.

There are a few communication tactics you can apply to increase the internal and external impact of your

collaboration process:

Go for tangible

results: If you work

together with your

consumers on a

structural level, make

sure you have concrete

deliverables. These

results (e.g. new

products, insights,

advertising,

packaging…) should be

shared with the world in

order to make the

collaboration aspirational

for the market and for

the manager involved.

Bite-size &

creative

reporting: Share

the results of your

collaboration in a

short, compelling

and creative way

with your

employees. Make

sure it is easy to

digest and to

share.

Apply content marketing

techniques: Don‟t

communicate once or twice

about your collaboration, but

talk about it more frequently.

Use three levels of content: big

content campaigns (e.g. when

you have BIG news: launch of

an initiative or showing the end

result), content projects (e.g. a

theme you talk about for a few

days/weeks) and content

updates (small, daily updates

with relevant information).

2 Internal communication is not enough

Internal = External

3 Measure impact

To keep the collaboration flow going, there is need for evidence that the approach works. Therefore

we advise to use a number of clear success indicators that you can measure during the

implementation of structural collaboration in your organization. There is no standard list of KPIs

to use; they differ from company to company, as they are closely linked to the company culture and the

company‟s (long-term) objectives. There are a few KPIs that apply to all companies to follow up on the impact of

structural collaboration.

Success of innovation, impact of

communication and improvement of customer

service: by involving customers early in the

process, your company will take better decisions.

Product launches, new advertising campaigns and

so on should have a higher success rate than before

the collaboration was implemented.

Cost reduction: by integrating the voice of the

customer in the entire decision-making flow, the cost

of ad hoc market research should be reduced. Next

to that, by creating better products and services

based on the input of the market, the impact of

word-of-mouth will increase, which may lead to

lower media budgets.

Consumer feeling of the organization: you can

measure to what extent your management has a

better feeling of the attitude and behaviour of your

target market. The goal is that managers think as

consumers and improve their performance through

this newly acquired skill.

Brand perception: listening actively will humanise

your brand and make it more popular.

Define your KPIs, measure them and

celebrate success!

3 Measure impact

Need for changes in internal implementation

processes

Collaboration should lead to decisions that

are taken through a between the market and

your company. The proof of structural

collaboration is in the implementation of the ideas. In

order to succeed in this crucial step, there is a need

to change the internal decision streams. The

challenge is to integrate consumer feedback

and input into every phase of the decision

cycle. Remember that structural collaboration does

not come overnight. It starts with a try-out that fits

within the existing culture. Make sure that as from the

start you know what your next step will be.

In other words: it is important to start with a try-out,

but it is equally important to start with a long-term

view. Make sure you know where you're going. After

the try-out, it is a matter of including collaboration

into projects where the fit feels right. People

(internally and externally) get bored rapidly. Make

sure you have a flow ready in your collaboration

process to keep the conversations going. Plan with

room for flexibility. Once you have completed a

number of successful collaboration projects, the

possibility to move forward to structural collaboration

will arise.

Make sure that, along the way, you take into account

these last tactical tips to make collaboration work:

Have clear objectives for each collaboration project

Involve all stakeholders early in the process

Manage expectations

Have a community manager

Create internal and external credibility

1. Have clear objectives for each collaboration project. Make sure not to collaborate just for the sake of

it. To get the feedback of consumers in the decision flow, the objectives have to be very clear, and in line

with the business goals.

2. Involve all stakeholders early in the process. The higher the number of departments involved at the

beginning of the process, the better. In order to integrate the collaboration flow in the decision flow, it is

crucial to have a buy-in from the relevant teams.

3. Manage expectations. Collaboration won‟t lead to the next big idea for your company. Customers are

great sparring partners, but don‟t set your expectations too high. Make sure that during the integration of

their feedback in the decision flows, everybody is aware of what to expect from the collaboration.

4. Have a community manager. Make sure to have assigned somebody to manage the community. This

person is responsible for managing the conversation with participants in the collaboration process and for

sharing the insights internally. He or she brings the consumer‟s voice to life within the company.

5. Create internal and external credibility. By delivering results and integrating the voice of the customer

in your decision flows, you will gain credibility among the participants in the collaboration platform.

Credibility among employees will also grow as they will see that the collaboration adds value. Marketing

your collaboration efforts is not a bad thing, but it should not be the only thing.

Part 3 : Cases

In this last chapter, we demonstrate how we applied the above framework

for important players in the (financial) services sector. We report on 2

successful co-creation pilots in the telecom and aviation sector that -eventually-

resulted in a long-term connection between all parties involved. We also show how

the financial sector is gradually opening up and starting to implementing their first true

co-creation trajectories surfing the waves of social media and web 2.0.

The Telenet case:

The Launch of Yelo

Telenet is the largest provider of broadband cable services in Belgium. Its business comprises the provision of

analogue and digital cable television, high speed Internet and fixed & mobile telephony services. By launching a

new service in Beta and integrating the voice of the user in the further development, Telenet co-created unique

value with customers.

With the purpose of securing (1) market leadership and (2) first mover advantage, Telenet‟s mission

statement comprises “generate impact through happy clients spreading positive word-of-mouth”, turning the

ground swell phenomenon to their advantage. Therefore, they launched a new service in Beta and different

internal teams (R&D, marketing, communication, management, even de CEO, Duco himself) collaborated with a

user group in an online pre-launch community on the further development of this application.

During the official (press) launch of

Yelo, an application bringing

digital TV to mobile devices

like the iPhone, iPad and

(portable) computer, users were

invited to provide feedback on social

media. 100 participants were

recruited from the open community

to join a 3-week closed pre-launch

community to allow in-depth

discussion of the uncovered themes,

collaboration on improvements and

to structure the development

roadmap. After the community,

feedback was shared on social

media again, offering all users a

chance to join the dialogue.

By integrating the voice of the

customer in the development of this

new service, consumers were not

only collaborating on improvements,

they actually co-defined the

development roadmap and the

go-to-market strategy for the

following years.

This roadmap is structured around a

model generated by consumer

feedback, differentiating between

basic expectations, satisfying

improvements and addictive new

features. 30 out of 45 user-

generated and prioritized

improvements have already been

added to the roadmap, ranging from

bugs and interface changes to

content features. More than 50% of

the last update were user-generated

changes.

This co-creation approach

resulted in highly satisfied users,

with 83% being satisfied to

very satisfied, turning users

into real brand

ambassadors. About 1 out of 7

iPhone and iPad users in the

Belgian market installed Yelo.

Recently, similar co-creation

initiatives have been set up for a

large Belgian Bank and a

worldwide issuer of credit cards.

ING Student House

Leveraging on the next generation

ING, a global financial institution of

Dutch origin, has the ambition to

become THE bank for students and

wants to have full understanding

of the life of students and their

banking needs.

In the 'ING Student House' community

the different marketing teams gained

insights into the daily life of 150

students by discussing, among

others, themes such as income,

expenditure, financial administration,

banking and insurances, during 3

months. The focus was on how ING

can add relevance to student

clients. In that perspective marketing

ideas were evaluated and co-created

with the students.

Barbera Van der Wal, Senior

Research Manager, ING retail: “Our

marketing challenge was to gain

experience with an online community

as a tool for structural collaboration

with key target groups. The goal was

to generate relevant customer insights

in the fuzzy front end of the innovation

funnel, to test marketing ideas and to

co-create with the target group”.

Eventually, the community provided

ING with a rich and detailed view

of the life of students nowadays.

In a closing workshop with the ING

Marketing-students team, over 100

(smaller and bigger) ideas were

generated to better match ING to the

needs and wishes of their student

clients. The NPD department now has

a clear view on the directions for the

development of the new student

positioning, and the community

provided them with a rich source of

customer quotes, brand reflections

and unsolicited feedback.

Susanne Streng, Segment Marketer,

ING retail: “For me the added value of

the collaboration project was not only

the concrete outcome, but also

installing a real dialogue with the

target and ACTING upon true

customer centricity. Engaging

customers in structural collaboration

is the ultimate brand touch-point

turning them into true brand

ambassadors”.

It’s not only about technology and

youngsters…

To further improve the experience of

travellers, Air France-KLM, the

French-Dutch airline holding

company, wanted to connect with

their customers on an emotional

level. Transfer flights in particular

are complex situations, evoking a lot

of emotions, mostly negative. To

approach this situation as an

opportunity and to demystify the

innovation process, InSites

Consulting and Air France-KLM

collaborated on a complete and

staged co-creation project,

centralised around the emotional

service perception. By connecting

with Air France and KLM frequent

flyers in an insightment community,

10 insight platforms were defined,

emphasizing their needs, emotions

and expectations.

In a second phase, another group of

frequent travellers placed the

insights into perspective with their

stories and came up with ideas on

the “My Transfer Idea” community, a

3-week creative journey. Analysis of

the ideas resulted in 32 concept

boards; the 4 most feasible were

integrated in a quantitative and

emotional concept screener.

This “My Transfer Idea” project does

not only use the emotional

experience of travellers as a starting

point for innovation in service

design, the emotional layer is

present in the complete

innovation approach and

connection with the frequent

flyers.

Also in the financial sector, a wide range of

target groups and business challenges have

been tackled by long-term customer

connections using online platforms:

- In the aftermath of the financial crisis, a 1-

year intensive collaboration process (via an

online community) was set up between

different internal teams (active involvement

of the CEO) and customers of 2 large

banks facing a merger. The goal was to

keep the finger on the pulse and generate

customer insights on the integration, so that

the teams could act upon them and control

damage or loss due to the fusion.

- With the purpose of better servicing their

autonomous investors, a large Belgian

retail bank installed a dedicated community

among autonomous investor customers and

account managers (with a sub-community

per profile).

Both groups were followed for 3 months, with a

meet & greet between the second and third

months. The results revealed different types of

autonomous investors embodying different

needs and insights on the dynamics between

the investors and account managers. In the

end, quick wins, short-term actions and

strategic projects towards the target group

were defined.

- Also in a more sensitive context, true

customer-centricity is key - nothing makes a

basher bash more than not being able to tell it

to your face - whether it is about how to

handle a compensation trajectory towards

investment customers or giving meaning to

your brand after re-branding.

Tom De Ruyck

tom@insites-consulting.com

@tomderuyck

http://www.linkedin.com/in/tomderuyck

+32 9 269 14 07

Delphine Vantomme

delphine@insites-consulting.com

+32 9 269 15 20

Research team

http://www.linkedin.com/in/delphinevantomme

Want to know more about

research in the

financial sector?

delphine@insites-consulting.com

+32 9 269 15 20

Delphine Vantomme Business Director Financial Services