Reputation Management as a Key Driver of Business Performance

Transcription

1 Reputation Management as a Key Driver of Business Performance DELA: How a Traditional Funeral Insurance Company in Benelux Reconnected with Contemporary Consumers April

2 A Note from DELA CEO, Edzo Doeve W hen I started with DELA in 2004, I realized that it had huge potential for growth. Of course, the organization had to become more entrepreneurial and more agile, with more solid processes and IT infrastructure. Our core values, our identity, who we are and what we stand for, was still there, but needed an uplift. To succeed, we needed to revitalize our culture, our brand, and our reputation. Managing this was key to giving us a broader license to operate. Although we succeeded, it was not a walk in the park. I questioned our brand strength when we broadened our Our core values, our identity, who we are and what we stand for, was still there, but needed an uplift However, our perseverance, our belief in our own values, and ambition to become a meaningful organization in people s lives unleashed a vast reservoir of energy and always kept us on track. insurance coverage. We had our challenges with reputation, too. However, our perseverance, our belief in our own values, and ambition to become a meaningful organization in people s lives unleashed a vast reservoir of energy and always kept us on track. Business Snapshot: DELA DELA is a cooperative organization that helps people finance and organise a respectful funeral for their loved ones. It takes care of financial and practical worries before, during, and after a funeral. The organisation acts with respect for life, past, and traditions in a way that is intended to leave friends and family with lasting, positive memories of the service. DELA was formed in the 1930s as an association that made a dignified funeral affordable for people with low incomes. By the early 1970s, DELA had become the largest funeral insurance and services company in the Netherlands, with a million members. That number doubled in 2

3 the 1990s. As of 2017, that number has nearly doubled again, to 3.9 million. DELA s Business Challenge DELA is the market leader in the Benelux in funeral insurances and services. A decade ago, the market for funeral insurance seemed saturated. With the market mature, the birth rate falling and an expected increase in the mortality rate, decline seemed inevitable. To regain momentum, DELA needed to overcome three major obstacles. First, DELA offered a one-dimensional product: funeral insurance combined with funeral services. Second, funerals are a topic that people prefer to avoid as much as possible. Third, DELA employees identified primarily with their own role in the company, not with the company s purpose, a situation that limited employee morale. A new internal and external reputation management strategy enabled the company to address all three challenges. The strategy helped DELA not only to avoid its decline, but also to bounce back with double-digit growth.. This case study describes how a new internal and external reputation management strategy enabled the company to address all three of these challenges. The strategy helped DELA not only to avoid its decline, but also to bounce back with double-digit growth. The Solution: A New Strategy Aimed at Double Digit Growth In the first years of the 21th century, DELA management noticed that the market for funeral insurance was saturated and saw no hope for expansion, as the low Dutch birth rate meant an inevitable decline in demand for funerals. However, the new CEO, Edzo Doeve, presented the board with an ambitious plan to redefine the company s mission and drive the company to double-digit growth within a decade. Reputation management contributed to the successful execution of his plan in two ways: (1) revitalizing DELA s identity and (2) setting the stage for new products. 3

4 Revitalization: warm colours, tapas and the iconic expression of continuity of life 1. Revitalization of DELA s Identity Funeral companies traditionally apply a positioning strategy that focuses on providing clients with a dignified funeral. Doeve decided to take a different approach: to revitalise DELA s image with contemporary consumers; the company should no longer focus on the funeral itself as an end-of-life ceremony, but on continuity of life for living loved ones. DELA would offer insurance and services that ensure family and friends, despite their loss, would be able to continue living their lives in ways as worryfree and positive as possible. Shifting the focus from death to continuity of life opened a world of possibilities for DELA, including new products and services to help clients families both before and after a death, such as memorial meetings, notary services for assistance with inheritance, donations, and custody. The revitalisation of DELA s identity was supported with changes in the design of DELA-funeral homes and crematoria, which were redecorated with warm colours and comforting art. Coffee with cake remained possible, but services could also include tapas, prosecco, and live music. Internally, DELA engaged employees with the new positioning: roundtable meetings, a DELA musical performed by employees, a new corporate story, introduction days for new employees, management development days, magazines, and digital tools. Round table sessions with the CEO, the DELA musical performed by employees, and the new magazine for DELA members. 4

5 Examples of the sport sponsoring, foundation fund, the why wait and the what you pass on campaign The initiative was very successful. An internal survey conducted by the Reputation Institute found that identification among employees with the company s mission grew following the introduction of the new strategy. Subsequent opinion surveys confirmed that their opinion of the company stayed higher than before the refocusing of the DELA brand. 2. Setting the Stage for Launching New Products At the same time the company began building its new identity, it also launched new offerings that included a life insurance and a savings insurance product. To sell these new products in a way that emphasised continuity of life, the company pursued public relations and philanthropic initiatives that had no direct sale Figure 1: This figure shows RepTrak results: the difference in pulse score and the drivers among people who are and are not familiar with the brand campaign Why Wait. 5

6 proposition. DELA strategists believed that by addressing the importance of meaningful experiences in life, they lifted the company to a level that went beyond being thought of as a sales channel for end-of-life related products and services. DELA started, for example, a Foundation Fund, supporting volunteer projects that involved memory. It also sponsored the Dutch national women s volleyball team showing the experience of ambition, colourfulness, and liveliness. A huge step aimed at stimulating support for the new positioning was the campaign Why wait until it s too late, say something wonderful today. The campaign featured consumergenerated branded content and won the Cannes Lions Grand-Prix Media prize. DELA saw the public s enthusiastic response to the emotional campaign as a vindication of the new strategy, and followed up with an even more emotional campaign, What you pass on is what you leave behind, that featured new born babies. Prior to these campaigns, DELA had grown mostly through direct sales. After these campaigns, a Reputation Institute RepTrak survey found that all behavioural intentions, including buying products from the company, had increased. For the first time, the company grew without a specific link to a direct sales campaign. Communications experts were also impressed and awarded DELA a golden Marketing Effie for the why wait campaign. The Results: DELA s Reputation Rises The systematic investments in DELA s reputation and distinctive positioning yielded improvements in positioning, branding, and reputation. Over the years, the Figure 2: This figure shows that the overall reputation has remained solid among members (green) while the pulse score of non-members (orange) continues to increase by 10.8% (6.3 points). 6

7 emotional bond between the public and DELA has grown, strengthened by the perceived quality of DELA s products and services, the degree of openness and transparency (governance) and the degree to which DELA contributes to society (citizenship). Improvements in RepTrak scores happened slowly but were clearly visible over time. Positive feelings toward DELA became more broad-based over time as well. RepTrak results show that the behavioural intention buying was mostly based upon one dimension in 2008: products and services. By 2017, more dimensions supported this behavioural intention, giving DELA a more solid position in the market and offering further proof that the strategy of focusing on reputation worked. DELA s Bottom Line Business Results DELA succeeded in realizing its double-digit growth objective. From 2004 to 2014, all financial and non-financial indicators improved. In the most recent four years, investments in reputation, both internally and externally, have laid a sound foundation for DELA to build on for a long time. Of course, the company realizes that growth will not happen automatically. New investments in reputation need to be made to continue building on its already great reputation. Figure 3: Business results 2004 compared to

8 Future Developments In recent years, the company has grown to become an energetic insurance service provider, focusing on products and services that DELA succeeded in realizing its double-digit growth objective. From 2004 to 2014, all financial and non-financial indicators improved. support people during the various life stages. As Edzo Doeve stated: The aim of DELA is to allow members to look forward to the future as carefree as possible by providing them with advice and assistance with financial and practical services. DELA is currently developing new initiatives in the field of palliative care, new online services and other types of insurance products. It is also expanding geographically as well, most recently with an expansion into the German market. However, the company is not turning away from its roots entirely: In the future, DELA plans to become more active in the market for uninsured funeral services. About the Author Dr. Cees van Riel is Co-Founder of Reputation Institute and served as its Vice Chairman. Dr. van Riel is also a Professor Emeritus at Rotterdam School of Management of Erasmus University Rotterdam where he founded 18 years ago the Executive Master of Science in Corporate Communication Program. Dr. van Riel is the author of numerous books and articles, creator of the RepTrak Alignment Monitor and co-author, with Charles Fombrun, of Essentials of Corporate Communication and Fame & Fortune: How the World's Leading Companies Build Winning Reputations. 8