Andrés Castro, CEO, ING Chile
ING Chile is part of ING Group, the Dutch-based global financial group. ING started operations in Chile in 1997. It has two million customers – nearly 12 percent of the country’s population as a whole, and in Latin America the group is the second largest asset manager for retirement and savings.
The firm has three lines of business – insurance, pensions and mutual funds – and AUM of $30bn.
ING Seguros de Vida S.A. (ING VIDA) is a leading life insurance company providing services to individual and corporate entities. Today, total brand awareness of ING VIDA is 76 percent, ahead of any competitors in the Chilean market.
In 2009 the company launched a new strategy to become the country’s leading provider of savings products and protection for retirement. The Wealth Management Strategy (WMS) has been rolled out across the region with the intention of helping customers to plan more efficiently for their retirement. This is carried out through a combination of compulsory savings, equating to 10 percent of the client’s monthly salary and voluntary savings products. For ING VIDA, the WMS is a commercial strategy, but one that represents a move away from a product-oriented approach to a more customer-oriented one.
Two important elements of this new emphasis on customer focus are personalisation and communication. The company operates modern call centres, which clients can contact with any queries or requests its clients may have, and its extensive branch network offers face-to-face support. It is through these branches that high income and high net worth customers can gain access to a dedicated team of managers who will support them while they find financial solutions that suit them and their particular needs. They are also provided with information on market conditions every week and any recommendations on updating their portfolio are provided accordingly.
As part of the marketing strategy for WMS, ING VIDA developed the “TU NUMERO” campaign, which initially targeted middle and high-income individuals. Meaning ‘your number’, the idea behind the campaign is to get existing and potential customers thinking about their future financial security after the end of their working life. The concept intends to simplify a complex issue like retirement savings by providing a single target value for the client or would-be client to aim towards in their saving. This has made topics that people can find confusing easy to understand and encourages people to want to learn more and ask for advice in moving forward.
The programme used various channels of promotion, including mass advertising in print and broadcast media, direct marketing and below the line promotion. On top of this use of traditional marketing avenues, the company harnessed the power of online interaction, developing a dedicated website where members of the public could answer the question posed in the advertising campaigns: “What is your number?” Through this website, people were given a personalised experience that resulted in them discovering what their ‘number’ is. The campaign was very successful; the site had over 280,000 hits and the firm received 24,000 formal contact requests.
TU NUMERO entered its second phase this year with a simplified message and a broader reach. This new stage of the campaign conveyed the message that everyone can reach their TU NUMERO goal through the company. Instead of the more enigmatic “What’s your number?”, marketing and advertising materials now posed the question “How will you read your number?” and answered “Arrange your savings plan with ING”. The results have been 81 percent on campaign recognition and 65 percent on message relevance.
The campaign has helped ING VIDA overcome many of the challenges faced in implementing the WMS plan, the greatest of which was introducing the concept of voluntary savings to the Chilean Market. While mandatory savings schemes have been highly successful and widely accepted, voluntary schemes compete with the customer’s desire for immediate consumption. This was combined with cultural influences in the country, such as a low percentage of the population understanding the importance of long-term savings. At its core, TU NUMERO aims to show that in order to have a better retirement one needs to put aside more than just the mandatory contribution. Voluntary savings have also been made more appealing, particularly to high-earners, by highlighting the tax benefits they bring. This message has been revolutionary; this initiative is the first time that any finance company in Chile has focused on telling people the amount of money they need to save in order to have a defined pension upon retirement. This uniqueness has been a large part of the campaign’s success.
However, there were further challenges ING VIDA had to face. There are many different customer expectations that the firm has to deal with and as such the need for flexibility and personalisation has been vital. The key to making this work is adaptability and working on an individual basis. In order to achieve this, the organisation undertook a client segmentation exercise, in order to determine who would benefit most from particular services and products. To help with this, the company increased the range of insurance products it had on offer, both in traditional areas such as health, life, credit life and unit-linked items, as well as investment alternatives such as equity and fixed income funds. It is not only access to its own products that ING VIDA is offering; customers also have the opportunity to take advantage of a selection of top funds and investments from market competitors, which it operates through an open architecture scheme.
As a final aid to implementing this strategy most effectively, the business has made innovative technological solutions available to its clients. Online tools such as GPS let clients know when an investment they are looking to make is above the normal risk profile of their portfolio – a function that has been particularly useful in light of the recent financial troubles of the global economy – and will also be made aware of any unexpected swings in the market. Additionally, the Customer Management software improves client relations, ensuring that customer relations operates on a one face, one click and one call basis.
When considering WMS and TU NUMERO in the context of the wider local market, it is clear to see that ING VIDA is in a good position. In general terms, the Latin American retirement savings market has shown considerable economic development in recent years and has fared very well during the global economic downturn. The largest economies in the region, Brazil and Mexico, are particularly strong and increasingly important at a global level. However the smaller countries in the area such as Colombia, Peru and Chile, have also become interesting markets when it comes to savings and investments. Migration from pay-as-you-go schemes to private capital systems in the sector have brought considerable benefits to contributors who understand that the responsibility for retirement savings lay with them. But this situation has further strengthened the need for complete professional financial advice from companies like ING VIDA, which have the knowledge and experience to help their customers most fully.
Looking to the future, ING VIDA plans to build on the success of the WMS drive so far. Its goal is to increase its client base, but to do so in the most efficient and effective way possible. In order to achieve this, the organisation is exploring new ways in which it can reach a larger number of customers in one go. One potential option that is currently being looked into includes corporate health and life products that can form part of a company benefits package.
Through this same channel, ING VIDA will then also be able to present itself to the employees as a leading provider of savings solutions as well.
What lies at the centre of ING VIDA’s success in the Chilean retirement savings market is a commitment to providing innovative services and products in a personalised and targeted way. It does not take time to sit back and congratulate itself on its successes but instead looks constantly for ways to build upon them. In just over 10 years the company and its products have grown to become some of the most recognised in the country and it has succeeded in making the population more aware of the need to plan for their future. It has also managed to cast its net wide, attracting both middle-income customers and high net worth individuals without detriment to the service of either and while understanding the differing needs of both. By pursuing this business model into the future and helping to change the financial culture in Chile, ING VIDA has ensured its relevance and leadership in the market for many more decades to come.