DEVELOPING COMPELLING PROPOSITIONS

1. DEVELOPING COMPELLING PROPOSITIONS Produced By: Campbell Alexander Version: 0.2 (1st December 2007) Output From : Proposition Development Workshop

2. Workshop Attendees • Attendees: • Ali Crossley • Colin Woodcock • Claire Best • Karen Ward • Amanda Marko • Sue Thomas • Claire Evans • ChrisThorndycroft • Campbell Alexander • Apologies: • Steve Lowe (Chris Thorndycroft attended in place off)

3. Discussion Topics • Expansive innovation Colin Woodcock • Maximizing primary & secondary research Sue Thomas • Effective us of stimulus Michael Ellyat • Proposed development process Amanda Marko

4. Expansive InnovationKey Discussion Points • What is a proposition – no right or wrong answer • product proposition looks at ‘essence’ of customer offer • creative proposition looks a single idea • At innovation stage do we express ideas in customer language, probably not? need to focus on what makes offer compelling for customer • Need to implement an ‘innovation’ calendar, to identify key priorities from across all business units • All ‘propositions’ should be benchmarked against LIR strategy • Is product development based on adviser rather that customer needs. • should start with end ‘customer’ creating a template that can be build on developed for advisers • Cannot be constrained by market, must fully understand customer needs and desires • Must continually evolve propositions, building on all sources of information, including customer complaints and feedback, sales force and adviser feedback

5. Maximizing Primary & Secondary ResearchKey Discussion Points • We need to make greater use of existing primary & secondary research – access via HUB • We have experts across the business who provide an untapped source of competitor and market information • Marketing needs to become comfortable using research findings to push back and challenge/stop projects • Need for common shared process across all adviser & consumer research • Stimulus needs to be properly developed in line with research timelines – feeding into research brief and questionnaire

6. Effective Use Of StimulusKey Discussion Points • It is not easy to define financial services propositions via ‘adcepts’ • Need to set out core benefits in language that customers understand – do we try and be too clever • Historically we have developed stimulus using a set ‘format’ setting out a limited range of propositions – this limits opportunities for consumers to express opinions • Need to make greater use of consumers to generate ideas common shared process across all adviser & consumer research • Opportunity to develop range of material to target ‘proposition’ at different segments of market – allows you to identify most appropriate segment to target • Having built propositions with end consumer in mind, is a real opportunity to utilise advisers to identify best approach to take in terms of selling direct

7. Proposed Development ProcessKey Discussion Points • Process needs to be; • integrated across marketing, with clear owners • fit with both adviser and consumer propositions • adaptable to reflect needs of different projects • evaluate TCF implications as early as possible • Prior to any formal research, business need to play a greater role in benchmarking idea against existing research • Customer journey and TCF requirements need to be considered as early as possible • At every step need to fully evaluate and make clear decision as to whether project should stop or progress to next stage

8. Proposition DevelopmentWhat are our business unit partners telling us?

9. Proposed Proposition Development Process

10. …So What is a customer proposition “A customer proposition is a carefully crafted, clear and simple statement that reflects the essence of the value a business will provide to a specified target market/audience/segment”

11. How can an effective proposition development processhelp marketing deliver excellent propositions? What have we identified as key requirements.. • Be insight and analysis literate (and commercially savvy), fully utilising existing and new research • Have ability to generate/articulate distinct propositions • Built in time/space to process in order to fully develop/assess • Qualitative build/refine, Quantitative assessment/validation • Develop propositions that are clearly defined and implications (including Customer Experience) identified • Deliver proposition documents that are mandated as a core/authoritative reference point • Good proposition development understood by BU’s (even mandated) • Proposition development process synchronized to support prioritisation and cross portfolio consideration – through innovation calendar? • Translated into marketing creative and strategies – that articulate key customer benefits in a clear and easily understood manner

12. Proposition Development 6 Step Process Constantly Evaluate and Develop • Fulfilling our Leaders in Retirement ambition requires a strong customer focused culture • The Proposition Development 6 Step Process helps us put the customer at the heart of our development process

13. Proposition Development ProcessSteps 1 - 3

14. Proposition Development ProcessSteps 4 - 6

15. Proposition Development & Research TimelinesA fully integrated process All marketing material finalised product launched • Assumes 10 weeks, could take longer Quant fieldwork Brief agency Revised stimulus and quant brief finalised Proposition workshop Qual fieldwork Quant debrief Brief Agency Qual debrief Proposition statements finalised Finalised brief and proposition stimulus to research Step 4 Step 5 Step 3 Note: Stimulus development time, includes Pru Agency time to mock up into final format

16. Historical ‘Gated’ Process & Fit With Proposition Development Process GatedProcess Ideas Review Proposition Concept Generated Proposition Concept Review Initial Research Business Brief Customer Journey Final Research Business Case Full Proposition Review Build & Deliver Finalise Mkt Plans Launch Phase Gate 4 Gate 1 Gate 2* Gate 3 Gate 0 Proposition Process Step 5 Step 6 Step 2 Step 1 Step 3 Step 4 Identify Opportunity Insight Review & Develop Proposition Themes Defined Proposition Implement Post Release Review Benchmark Test & Develop Customer Journey / Experience Work Running Alongside – With TCF Imbedded in process Notes: • Prior to business brief (gate 1) submission proposition themes and supporting insight should be in place – providing a clear reference point to support requests for additions resource and create reference point for proposition development pre/post research. • Proposition summary statements and customer journey should feed into business case development process (gate 2), if delivery requires further revision/changes to product that is likely to impact delivery of proposition, further revisiting material maybe necessary before Business case submission 3 TCF Fairness filter, which is a required output at stage 4 of new proposition process should feed into the business case

17. APPENDICES Example outputs and stimulus

18. Insight Review & Benchmark Insight: Explain what happened and how you developed your idea Idea: Explain your idea fully Product Area: Explain what product area proposition falls within Competitor / Market Company • Who are the key players in this market ? • What is distribution split within this market • Market trends in terms of sales • Profile of customers purchasing these products • Attitude of advisers and consumers to this market (existing re • How does the idea improve on competitor propositions? • What is Prudential share of relevant market • How does the idea fit with Pru’s LIR strategy strategic • Is what we are offering meeting a specific customer need Submitted by: Your Name Date:

19. Proposition Workshop Output

20. Example StimulusTDF:‘Taxman’ and ‘Bank’ ‘Taxman’ ‘Bank’

21. Proposition Summary TemplateDirect

22. Proposition Summary TemplateAdviser

23. Adviser completes a needs analysis, carries out some product research and requests an illustration(s). Adviser meets with client to present recommendations and complete an application form. Adviser posts signed application form to Prudential Adviser meets with client and completes a Fact Find. Mary Administrator Adviser prepares Illustration(s) & recommendations file ahead of 2nd client meeting. Andy Adviser Dave Adviser GHL Pru Complete Application Receive Application Provide Illustration * Calls may be recorded PRODUCT RESEARCH AND ILLUSTRATION Log onto The Exchange to get information on Prudentials’ lifetime mortgage Request an illustration by phone by calling the lifetime mortgage dedicated team on freephone 0800 731 5544* Request an an illustration online by obtaining a digital signature from Unipass and logging onto pruadviser.co.uk Confirm borrowing amount required and estimated property value Telephone illustrations can be sent out in the first class post, via email or via fax Online illustrations can be printed out locally or downloaded onto the application form PRODUCT RECOMMENDATION AND APPLICATION SUBMISSION Review key facts illustration with client and explain features and risks of the lifetime mortgage Discuss which option suits their circumstances - the Flexible or Flexible Plus option Recommend client discusses their plans with their family Discuss that they must contact their solicitor about their plans Talk client through application process and how long it typically takes Complete paper application form Take clients proof of identity and solicitors details Complete the debit card details for the arrangement fee and property valuation Post application form in the post to Prudential FACT FIND MEETING Discuss clients immediate needs and whether they want to release more money in the future Check details of the property to ensure client is eligible for any recommendation made Discuss potential impacts on current/future means tested benefits; their tax position; and any inheritance they wish to leave Check whether client wants to retain ownership of their property and whether they plan to move or sell up in the near future Agree to obtain a few illustrations and agree time for follow up meeting Customer Journey: Lifetime MortgageA sales process that is designed to support financialadvisers and customers from initial enquiry to application

24. Day 1 Day 4 Day 5 Day N Day N Day 2 Day N Day 3 Day 5 - 10 Prudential Lifetime Mortgages Limited PO Box 185 Leeds LS11 1AJ Michael 1 Orchard St. Appletown A99 4W Michael 1 Orchard St. Appletown A99 4W Andy Advisor 2 Pear St. Appletown A99 4TW Andy Advisor 2 Pear St. Appletown A99 4TW …allowing advisers to track progress of the case online, whilst at the same time receiving regulartelephone updates from Prudential right through until completion Adviser calls customer to inform offer issued Adviser receives call and automated email from Prudential to confirm receipt of application Case completed commission being progressed Automated email and letter: case completed Automated email: offer accepted Automated email and call: offer authorised Adviser receives a facsimile of acknowledgement letter Automated email: valuation instructed Automated email: valuation received Copy of offer sent by facsimile to Adviser Adviser posts signed application form to Prudential Adviser Pru Receive Application Processing Application Underwrite Loan Fund Loan OFFER Call received from Prudential confirming the valuation has been received, together with all the required documentation and Prudential now in a position to make an offer Confirm all client information with Prudential to ensure there are no discrepancies Auto-email received confirming offer authorised Copy of offer document received by fax, original sent to clients solicitor Inform client that an offer will be sent to their solicitors shortly Ensure your client meets their solicitor and signs and returns their acceptance form COMPLETION Auto-email received confirming client has accepted the lifetime mortgage offer Auto-email received confirming the case has completed Letter received confirming the case has completed, the money has been released, and commission is now being progressed Commission received by BACS and detailed in commission statement as usual About a month after completion, if client is new to the Prudential, a customer welcome pack and satisfaction survey is sent to the client from Prudential ONLINE TRACKIING AND AUTOMATIC EMAILS Post application form in the post to Prudential Once application submitted, go online and track the progress of the application processing at Prudential via pruadviser.co.uk Automatic emails received from Prudential at key stages of the process – for example when the application is received, the valuation instructed, and the offer issued to keep up to date with the progress of clients’ application APPLICATION ACKNOWLEDGEMENT AND VALUATION Call received from Prudential to advise clients application and fee received, and initial assessment of the application has been completed Prudential confirm surveyors are instructed to contact client within the next 5 days to arrange the survey of the property Auto-email received confirming receipt of application at Prudential Copy of the clients acknowledgement letter received by fax Auto-email received confirming valuation instructed Auto-email received confirming valuation received