Institute of Customer Service

1. Institute of Customer Service Leading Customer Service Performance and Professionalism Member Forum AEGON 1 Nov 2010

2. agenda Simon Skinner, Customer Service Director Life & Pensions AEGON Maintaining service in challenging times Susie Wilcock, Head of Brand Management and External Communications Promoting the AEGON brand Jo Causon, CEO The Institute of Customer Service Matching the external and internal brand - the critical nature of employee engagement in delivering the customer promise Lynne Copp, Managing Director TheWorkLife Company‘ Focusing on balance and wellbeing that drives customer excellence, people satisfaction and business results

3. Simon SkinnerCustomer Service Director Life & PensionsAEGON

4. Institute of Customer ServiceLife & Pensions Customer ServicesAEGON UK 1 November 2010 Simon Skinner

5. Theme for the day • “Seize the hour” • “Don’t waste a good crisis”

6. ‘Verge of the abyss’ – My Dad the Visionary! • Lehman Brothers • Euro 8 Trillion • Lingerie • Pigs • Houses

7. Trust • 55% bank customers • 54% insurance • Simplicity and transparency • “Getting back to basics” • “Putting Customers First”

8. The Customer Services journey / purpose The purpose of Customer Services is to deliver excellent service to its customers, partners and the AEGON Group This purpose balances the needs of our three stakeholder groups: Our Customers Our Shareholders Our People • Better quality service for our customers and partners • Higher returns through lower cost, improved customer retention and increased sales • Rewarding careers in a refreshing and fun environment Excellent quality customer service Reasonable, low cost Compliant and low risk Agile and responsive Strong people capability 8

9. Delivering the purpose Excellent quality customer service Reasonable, low cost Compliant and low risk Agile and responsive Strong people capability Excellent people with capability and drive to deliver outstanding result Service we would expect to receive ourselves An efficient low cost operation • Operations • that • deliver • Effective compliant servicing • At low risk • Efficiently • Operations • that are • Agile and allow efficient work management • Flexible and easy to change • Responsive to the needs of customers, distributors and the business • Brilliant basics • Based on what customers value • Friendly and helpful • Good quality service will be market leading • Reduce low-value demand • Increase productivity • Encourage customers to lower cost channels • Robust cost control and MI • Skilled people • Engaged teams • Strong team management • Refreshing, positive and enjoyable culture • Rewarding career

10. Where are we headed?– a future-state operating model Paper-based transactions Telephony (“one and done”) Outbound calling / Retention Self-service support Self-service direct access High value customer segment Flexible Resource New Business Servicing Claims Mid value customer segment Customer Service delivery management of closed book

11. Where do we start from? • Inconsistency in delivery of service • Existing silos act as barrier to sharing best practice • Potential to differentiate service delivery between open and closed books Customer service delivery Internal efficiency • Multiple teams doing the same thing • Lack of consistency and common processing • Consequent impact on operating costs Change delivery & governance • Need to improve change delivery capability and governance across CS • Poor CS operational risk management capability • Need for investment in strong leadership / management capability • Over-reliance on a relatively small group of expert resources • Need to improve flexibility and capability for load-balancing across teams People 11

12. What are the challenges and opportunities? Opportunity 2012 ambition Improve empathyand consistency Improve efficiencyand clarity Culture andleadership Improve advocacyby 25% Improve efficiencyby 25% Build on existingstaff engagement May 2009 Customer feedback THIRD QUARTILE Cost base THIRD QUARTILE Staff engagement SECOND QUARTILE

13. Brandexperience ConsistentDeliberateDifferentiatedValuable AEGONCustomerExperience Continuous Improvement Predictableexperience ConsistentDeliberate Not differentiatedNot valuable TreatingCustomersFairly Key enablers Legacy Management Variableexperience InconsistentUnintentionalNot measured Where does this take us on the journey? To take the first steps on the journey, we recognise that we need to move the current experience onto a more consistent, predictable footing • over the longer term we wish to use customer service to deliver our brand experience; our performance will be market-leading and top quartile • the first steps on this transformational journey are designed to build an industrial strength capability and a platform to deliver the longer term ambition • these first steps will deliver a predictable, consistent level of service for our distributors and end customers • onto this, we can then build our differentiating proposition 13

14. How do we get there? - CS Transformation Programme to end 2012 Transformation Programme Continuous Improvement Implementation of key operational efficiency initiatives identified for 2009/10; deliver of ongoing small change Legacy Management Analysis and planning of priority measures Mobilisation/ priority landscape Ongoing analysis and delivery of remediation work to correct prioritised issues • Implementation of key technological and infrastructural enablers • Unified voice technology • Integrated workflow management Business Transformation • Secure email Detailed planning and implementation of Cross-Departmental efficiency initiatives identified for 2009/10/11 Organisational change • Implementation of new organisational design in CS and realisation of associated benefits • Implementation of people management initiatives identified for 2009/10 New Propositions Business-driven change • Further consideration and prioritisation of a number of new business propositions:- • Investment Proposition • SIPP • Variable Annuities Jul 09 Aug 09 Sep 09 Oct 09 Nov 09 Dec 09 Jan 10 Feb 10 Mar 10 Apr 10 May 10 Jun 10 14

15. Building on success – “the art of the possible” 2,500calls per week 2,500fewer waitingcustomers 3,422calls per week 25days failuredemand transferredcalls pendingqueues ‘Options’annuity set-up

16. Susie WilcockHead of Brand Management & External CommunicationsAEGON

17. Brand and sponsorshipPresentation for the Institute of Customer Service Susan Wilcock 1 November 2010

18. Agenda • A short video… • Why sponsorship • Our partnership with British Tennis • Objectives • Implementation and campaigns • Sharing the benefits with customers • The results • A few thoughts for 2011

19. Why sponsorship? • Strategic need to build consumer brand awareness • Our industry is changing (RDR/ pensions reform) – new opportunities may require a new approach • Lack of name awareness already a potential obstacle to some business Sponsorship can: • Fast track the growth of our brand, compared to traditional advertising • Existing base of engaged consumers (tennis fans) • Potential to generate media coverage & PR over and above ads • Bring a new vitality to our communications • Provide opportunities to engage with employees and existing customers

20. Our partnership with British tennis Lead Partner of British Tennis Five-year deal with the LTA, extending from grass roots to world-class events National and international events Including AEGON Championships, Classic and International Player development Team AEGON and AEGON FutureStars Community AEGON Schools Tennis and AEGON Parks Tennis National teams AEGON GB Davis Cup and Fed Cup Teams AEGON Masters Tennis Separate deal to sponsor the year-end finale to ATP Champions Tour Held at the Royal Albert Hall in December Legends of the game, like Rafter, Cash and Henman Helps to maintain year-round brand awareness

21. Objectives Consumers CDMs Tennis enthusiasts Existing planholders Advisers • Build brand awareness – and ultimately, consideration • Year 1: focus on name awareness • Years 2-3: increasing emphasis on brand message – who we are/ what we do • Engage with our customers, intermediaries and employees • General consumers • Active financial consumers • Trustees • CEOs • CFOs • MDs • Benefits Managers • Interest in tennis • Follows at least Grand Slams • Play at least twice a year

22. Implementation • Embedding AEGON in our sponsorship properties • Tennis turns blue! • Courts, players, parks, schools – all key touchpoints carry the AEGON logo • Year-round brand presence • Embedding sponsorship in our communications • Corporate website, brochure, stationery • Rebrand of AEGON Scottish Equitable to AEGON

23. Campaigns • Campaigns bring our brand and sponsorship to life. • Summer sees the peak public and media interest in tennis • Multi-media campaign across broadcast, press and online, running from French Open to end of Wimbledon • Co-ordinated with PR • Audience of 10 million across BBC and Eurosport coverage • Twin deals with The Times and Daily Telegraph – ads and editorial • New AEGON tennis website received over 90,000 hits and we collected over 5,000 email addresses • Total advertising reach of 39% ABC1 adults

24. Campaigns (cont.) • AEGON Masters Tennis • End-of-year event provides opportunity to remind and reinforce brand awareness with tennis fans • Smaller-scale campaign across ATP World Tour Finals and the Masters • Press, online, ambient branding • Latest creative makes most explicit link yet with our business

25. Sharing the benefits with customers • Exclusive competitions to win tickets for AEGON-sponsored tournaments • AEGON Championships, Classic and International • Davis Cup ties • AEGON Masters • Including top prizes with hospitality and accommodation • Exclusive ticket discounts eg 10% off at AEGON Masters • Working on priority booking for tickets for 2011 • Communicated via our websites, email and inserts with statements/ letters • Helps us collect customer data like email addresses • Helps to communicate corporate messages eg name change • Our Contact teams are kept informed, with Q&As in case of questions or problems

26. Some more good news • AEGON has been voted a Business Superbrand for 2011 • Superbrands commissions independent research to identify the UK’s strongest brands • These are then voted on by an Expert Council and 1,700 business professionals • Top 500 B2B companies are awarded Business Superbrands status • This is the first time AEGON (or Scottish Equitable) has been included in the listing • More evidence that our brand awareness is growing, especially among CDMs

27. Looking ahead to 2011 • Next year is the midpoint of our partnership with British Tennis • Need to continue expanding the reach of our campaigns and activity • New media options for campaigns eg radio, more broadcast • Work closely with PR • Ensure fit with target audiences for At Retirement and Workplace Saving • Creative to carry stronger brand message • Provide more opportunities for customers • More targeted offers eg AEGON Classic discounts for Birmingham customers • Improved communications channels eg new AEGON website and ezine • Drive to obtain marketing permissions

28. Thank you – any questions?

29. Institute of Customer ServiceEmployee engagement and the customer service promise Joanna Causon Chief Executive 1st November 2010

30. the renaissance of customer service • customer service is a critical element of business performance • changing relationships between organisations and their customers - customers now hold the power • future of customer service - changing attitudes of we, the customer - challenges brought by technology - changing business models - changing attitudes of employees

31. why does service matter? • £15.3 bn – the cost of poor customer service to UK economy annually - business abandoned and lost to entire industry - £5.2bn • £238 average annual value of each customer relationship lost • 73% of consumers have ended a relationship due to poor customer service - consumers aged 27-42 most likely to switch • one in four people have left a financial services company or utility provider in the last year following poor customer service Source: Genesys – The Cost of Poor Customer Service: September 2009

32. characteristics of organisations that deliver excellent service • deal with problems and queries • deliver on the promise • make it easy to do business with • go the extra mile • continually looking at ways to innovate • create customer strategy, service delivery and the right culture

33. what are the key priorities for customers? • overall quality of product / service provided • friendliness of staff • handling problems and complaints • speed of service • helpfulness of staff • handling enquiries • being treated as a valued customer • competence of staff • ease of doing business with • being kept informed

34. the direct impact of an engaged workforce. will result in: • 12% rise in profitability • 18% increase productivity • 43% hike in revenue not to mention… • 5 fewer sick days a year • 87% less likely to leave Source: MacLeod and Clarke : Engaging for Success 2009

35. the direct impact of an engaged workforce. • 70% of engaged employees have a good understanding of how to meet customer needs as opposed to only 17% of disengaged employees (CIPD) • engaged employees generate 43% more revenue (Hay Group) • Engaged employees: 2.7 sick days per year. Disengaged employees: 6.2 (Gallup) • Engaged employees are 87% less likely to leave (Corporate Leadership Council)

36. the direct impact of an engaged workforce. • 67% of engaged advocate their organisations; only 3% of the disengaged do (Gallup) • 9 out of 10 of key barriers to successful change, people related (PWC)

37. holding up a mirror • customers are sensitive to and judgemental of: • people’s attitudes • behaviours • and the way they communicate • link between service and selling as well as satisfaction • consumers spend more with those they like • 10 seconds to make a positive impression

38. expectations – more willing to complain – more able to do so • more disposed to tell others about bad experiences - 81% - 2001 - 89% - 2006 - 90% - 2010 • more able to do so • growth of social media • as consumers we can draw down information more easily • seek tailored solutions both offline and online • tell the world when something goes wrong – not just our friends • need to look beyond traditional measures of customer satisfaction

39. UK customer satisfaction levels

40. UKCSI: the top performers • John Lewis (88) • Waitrose (88) • Lloyds Pharmacy (86) • SAGA Holidays (86) • Virgin Holidays (85) • Marriott (85) • Marks & Spencer (food) (85) • Boots (84) • First Direct (84) • Marks & Spencer (84)

41. bottom line impact of good customer service • top box customer satisfaction • 2x likely to renew/stay • 3x likely to recommend • 24% higher net profit margin • 71% higher profit per employee

42. what are they doing to get these results? • professionalism • commitment to staff • genuinely empowering • listening • building service cultures • engaging and championing • creating customer strategy, service delivery and the right culture

43. keys to employee engagement • leadership through a business story • engaging managers • developing the employee voice • integrity • alignment

44. the challenge is to do more with less • increased demands come against the backdrop of a recession • greater stress among the public • falling morale among staff • important we encourage and build customer focus • led from the top • development programmes built with a core focus on service • each customer is an individual and needs to be treated as such • key is to help staff make the right judgement each time

45. lessons learned • customer ‘management’ is fast becoming a strategic boardroom issue • only sustainable competitive advantage • customer feedback is immediate and highly visible • consumers have the power to shape image as never before • strong service leadership is crucial • greater engagement and real involvement of your staff • live the brand

46. how the Institute can help..... • evidence – research base • sustainability through skills and professional development • measurement – impact • benchmarking – best in class • recognition and accreditation • context not alone • engagement – understanding your drivers • listen to your views • get feedback and factor into our development • first port of call • raise the profile and impact of customer service

47. Thank you Jo Causon Institute of Customer Service

48. Lynne CoppManaging DirectorWorkLife Company