9.2 Market research in financial services

Question 1

Why do providers need to know what customers view as positives and negatives about their products?

Answer 1

• Positive aspects so they can stress it in their marketing materials
• Negative aspects so they can redesign products

Question 2

What do providers need to keep up to date with?

Answer 2

• Changes in legislation
• Regulatory changes
• Levels of unemployment
• Demographic changes
• Cyber-crime

Question 3

Issues to take into account when designing a script for an interview:

Answer 3

• Questions that will be asked

- Identity of people interviewed

Question 4

Drawback of questionnaires:

Answer 4

Response rates can be very low

Question 5

Drawback of observation:

Answer 5

No physical product is being purchased so it is not easy to observe customers buying financial products

Question 6

How can providers use observation to collect information?

Answer 6

• Use of bank branches by observing the number of people who enter branches
• Number of people queuing at cash machines

Question 7

What is mystery shopping used for?

Answer 7

Monitoring and measuring the customer experience, and identifying problems

Question 8

What happens in mystery shopping?

Answer 8

1. MS is given instructions by commissioning firm on how they are to act
2. MS visits provider as customer
3. MS notes how long after arrival before someone helps them`
4. MS describes supposed need and asks questions and/or complains or behaves in a difficult way and/or describes a particular need that is unusual
5. MS may or may not buy product
6. MS makes notes on level of customer service, quality of information and advice.
7. MS prepares detailed feedback report

Question 9

What is mystery shopping?

Answer 9

The use of individuals trained to measure customer service processes by acting as potential customers and reporting back on their experiences

Question 10

Advantage of mystery shopping:

Answer 10

Allows providers to make comparisons between different providers or to compare performance of same provider over a period of time

Question 11

Sources of secondary research:

Answer 11

• Libraries
• Trade publications
• Websites
• Advertising

Question 12

What is internal secondary data?

Answer 12

Data that has been produced by the provider itself

Question 13

Ways internal secondary data can be used:

Answer 13

• Marketing department figures on past advertising campaigns and money spent can be correlated with sales figures for subsequent period to establish effectiveness of promotion
• Data from financial statements, such as sales, costs and profits, can be compared over time to forecast results
• Insurance company can study claims and use its analysis to calculate future risk

Question 14

What is external secondary data?

Answer 14

Data published by other organisations

Question 15

Sources of external secondary data:

Answer 15

• Public sector organisations and government departments e.g. HM Treasury
• Financial services regulators
• Professional organisations
• Competitors