Does anonymity matter?

What if we were to create research methods where anonymity did not matter? Where clients could ask straight questions of customers on customer databases or customer websites, and get straight answers back from them? John Griffiths (www.planningaboveandbeyond.com) offers the view:
I am reminded of my induction into digital telephony over 20 years ago, where a technologist explained that by going digital, telephone companies had found a way to put voices and computer data into packets that they could send down a wire. Once they had made this jump, the challenge was to find ways to send data faster. Now thousands of people use the same wire at the same time to pass voice and data to each other in both directions in real time. While telephone stayed analogue we needed an operator to make a physical connection between two telephones, and while the two parties were using that single piece of wire no other information could be passed down that wire. That is where marketing research is stuck now. The analogue way to get trustworthy information from a participant is to set up a separate circuit isolated from everything else. Which makes it clunky, costly, slow and methodologically suspect. But what if client companies find that they can indeed get usable customer data without analogue circuitry? Supposing in a flurry of e-communications as a customer sends off for a new car brochure, they browse websites, watch ads on YouTube and Google Video and answer pop-up questionnaires before and after? Suppose car companies find ways for customers to browse information systems in the showroom to choose their cars and then integrate research capture. They could be gathering research data at the same time as selling. Unthinkable? Why ever not? This is called duplex information flow. All digital devices have had it for years, but marketing research hasn’t. Playing ‘peekaboo’ with identity is a poor way to protect an industry as established as marketing research. If the industry does not find a way around the anonymity issue, we may be like the rest of analogue technology and find ourselves consigned to history. The client can talk directly to customers and prospects and they willingly talk back, even initiating an exchange. So, what was your role again?

Case study

HBF Health Fund Inc.

The Hospital Benefits Fund of Western Australia Inc. was incorporated in 1941 to provide private health insurance services to the people of Western Australia. Since then, HBF (as it has become known) has grown to be the largest private health insurance organization in Western Australia, with a 65 per cent share of the private health insurance market. Incorporated as a mutual organization, HBF has nearly a million members – which is almost half the total population of the state of Western Australia. The HBF brand is instantly recognized by over 99 per cent of the population, and the organization is renowned for its service to members, high ethical standards and sound financial management.
In the late 1980s and early 1990s the emerging global economy, where competitive advantages lie in ever-increasing scale, presented HBF with the challenge of continuing to service the needs of its members whilst competing with national (and even international) competitors with, in some cases, operations many times the size of its own.
Without a member-base or any brand awareness in other parts of Australia, it was soon realized that attempting to replicate the scale-based strategies of the major competitors by expanding HBF’s operations nationally would expose the organization to an unacceptably high level of risk whilst simultaneously diverting attention away from servicing the needs of its members, all of whom lived in WA. Rather, a decision was taken to expand the organization’s operations to cover complementary services for members, focusing on the key strategic advantages available to HBF, particularly the relationship it had with its members.
The first products identified were domestic general insurance products for home, contents and motor vehicle. However, the general insurance market in WA was already mature and dominated by a small number of well-established players. Also, with a history deeply rooted in private health insurance, the HBF brand had become synonymous with this in WA. Stretching the brand to cover domestic insurance products was therefore a significant challenge.
The approach taken by HBF was to differentiate its general insurance products from those already in the market by emphasizing the attributes that had developed around the HBF brand as a provider of private health insurance. HBF focused on its organizational strengths of service to members, mutuality and high ethical standards. Whilst the established players in the domestic insurance market clearly held a competitive advantage in the ‘manufacture’ of general insurance products, they were unable to match the depth of the relationship HBF had with its members.
Although growth in the general insurance portfolio was slow initially, HBF members who purchased domestic insurance products from the organization soon discovered that the qualities attributed to the health insurance service were also present in the general insurance service.
Despite slow growth initially, HBF was able to persevere with its product development initiative because, as a mutual organization, it is accountable to its members (customers) and not the capital market. Where the traditional capital markets would have demanded a financial return from the investment in a new line of business, HBF was able to take into account the strategic value being generated, represented by a growing acceptance of the new line of business by members.
By 2005, HBF’s general insurance business had gained a 12 per cent share of the market in Western Australia. It is generating annual returns on capital of approximately 25 per cent and is growing policy numbers by 15 per cent per annum. The investment in the general insurance business has produced an average annual return of over 20 per cent after tax.
HBF followed a similar strategy with the launch of a Retirement and Investment Advisory business in 2003. After only two years of operation, HBF Financial Services reached an operating break-even. It is projected to generate positive cash flows by the end of 2006.
As in the launch of general insurance 15 years ago, HBF emphasized the organization’s strengths, applying them in an industry that had experienced a series of scandals arising from inappropriate behaviour by existing players. Despite a complete lack of scale in the financial advisory industry, HBF has been successful in capturing a segment of the market that is seeking the trust and security offered by a reputable organization.