Tech-Protector
This CD This disc has been thoroughly scanned and tested at all stages of production, but - as with all new software - we still recommend you run a virus checker before use and have an up-to-date back up of your hard drive. Although every effort has been made to keep this CD virus-free, Lifestyle Services Group Limited cannot accept responsibility for any disruption, damage and/or loss to your data or computer system that may occur whilst using this CD or the programs/data on it.
Contents This CD
Inside Front Cover
Welcome
3
Opportunity
4
Key Market Statistics
6
About Tech-Protector
8
Product Features
10
Extended Warranty
12
Commercial Features
14
Marketing Applications
16 - 21
LSG Commitment
22
Potential Revenues
24
Summary
25
Contact Details
Back Cover
Tech-Protector
Welcome LSG is an innovative and forward thinking company with the ability to offer new-to-market products and services to enhance the consumer offerings currently provided by the Virgin brands. Further to initial discussions with LSG, an outline proposition has been produced to position the opportunities of Virgin Money Tech-Protector. This proposal will highlight the concept of Virgin Money Tech-Protector, identify the synergy between the Virgin brand and Virgin Money Tech-Protector’s innovative features and benefits, outline the potential value to Virgin Money and suggest that further discussions would be beneficial to further develop and define this solution.
Virgin is a trusted and unique brand; a Champion Challenger and forward thinking company that has always confronted the norm and introduced customer centric products and services. Through this methodology, Virgin Money has identified that the extended warranty product marketplace needs redressing and redesigning. LSG are best placed at designing and delivering the next-generation of warranty products and within this proposal LSG will demonstrate a product solution that marries seamlessly to Virgin, Virgin’s brand values and above all, Virgin’s focus on customer centricity.
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Tech-Protector
Opportunity Virgin Money have identified that an opportunity exists to provide an insurance product to Virgin stores and Virgin.com which will compliment a totally new customer concept and experience in purchasing music and technology products.
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Tech-Protector
It is likely that the new generation of Virgin Megastores will empower its customer to:
The product opportunity required by Virgin Money needs to follow:
• Download music files in store
• An alternative to the traditional extended warranty
• Purchase portable technology products
• Offer greater value to the customer
• Purchase home entertainment products
• Present revenue opportunities for Virgin
• Relax in a coffee shop environment
• Offer flexible, innovative features
Virgin Money would like to investigate associated products that fit with this customer experience, in particular, offering an insurance to protect the purchases of technology products, and to offer both Virgin Money and its customers greater value and benefit.
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Tech-Protector
Key Market Statistics “In street robbery, our concern has been around the smaller portable pieces of kit - the new generation of mobile phones and iPods,” he said. “ It is very obvious when someone is wearing an iPod. That is what is fuelling this.” Sir Iain Blair - Met Police Commissioner
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Tech-Protector
• Estimated 26 million MP3 devices to be sold in 2005, compared to 3 million in 2000 • Personal robberies have increased from last year by up to 40%
1
2
• A third of those who suffered gadget theft while abroad were not insured, and as a result, 13% of these were forced to shell out more than £200 on replacements 3 • Norwich Union reported a 400% increase in the theft of MP3 players between Nov 04 and Nov 05
4
• Police have stated that the biggest increase in car crime in recent months has been caused by thieves targeting satellite navigation systems causing over £300,000 in damage 5 1 2 3 4 5
Canalys bbc.co.uk Direct Line Norwich Union South Yorkshire Police
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Tech-Protector
About Tech-Protector Virgin Money Tech-Protector is a innovative and new-to-market insurance product which can replace the cumbersome extended warranty. It is designed to predominantly cover mobile technological equipment such MP3 players, digital cameras and camcorders, satellite navigation systems and portable games consoles. Virgin Money Tech-Protector has also been developed to cater for more static equipment such as home entertainment systems. One of the main USPs of Virgin Money Tech-Protector is that it offers the customer a replacement or upgrade replacement opportunity for their damaged goods rather than a repair, offering greater value in today’s fast moving technological developments.
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Tech-Protector
Virgin Money Tech-Protector can be applied to both portable and non-portable technology products, offering variable features to represent relevant risks and product applications. Virgin Money Tech-Protector has been split to cover:
Portable Goods
Non-Portable Goods
Covers for:
Covers for:
• • • • •
• Accidental Damage • Water and Liquid Damage • Mechanical or Electrical Failure
Theft Loss Accidental Damage Water and Liquid Damage Mechanical or Electrical Failure
Banded for retail prices between: £0 - £150 £151 - £300 £301 - £500 £501 - £1000
Banded for retail prices between: Up to £300 £301 - £500 £501 - £1000
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Tech-Protector
Product Features One of the key features of Virgin Money Tech-Protector is the ability to replace or ‘upgrade replace’ a damaged device rather than get it repaired. Additionally, LSG would like to investigate further the option of fulfiling this replacement with Virgin vouchers with the ultimate aim of driving customers back into Virgin stores or Virgin.com to re-purchase their goods. This enables the customer to choose whether they want to invest a bit more on the latest model - or stick with their existing model - the choice is theirs.
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Tech-Protector
Replace or ‘Upgrade Replace’
Customer device theft/loss/damage
Claim authorised by LSG
Voucher sent for replacement at Virgin stores or Virgin.com
Customer replace or upgrade in Virgin Megastore or Virgin.com
Included in claims pack details of Virgin offers on which to redeem voucher
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Tech-Protector
Extended Warranty Extended warranties are products that provide the customer with a repair service should their goods suffer from electrical and mechanical failure beyond the manufacturer’s own warranty. The concept allows the customer to report a failure and instigate an engineer visit to fix the goods; the costs of the call out, parts and labour being covered by the warranty. A monthly or one-off payment is generally made by the customer for the warranty. Market perception of extended warranties have varied, with consumers generally viewing them as bad value, difficult to claim on and restrictive.
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Tech-Protector
Virgin Money Tech-Protector is an innovative product addressing the needs of today’s technology products; including how they are used, the risks associated and their shelf life before being superseded. There is little or no comparable products on the market, however, Virgin Money Tech-Protector will always be compared to the now unfashionable extended warranty.
Extended Warranty r No cover for loss r No cover for theft Covers goods failure Faulty goods repaired r No option for upgrade r Complexity in point-of-sale sign-up r Bad consumer image r Activated after 1st year of manufacturer’s warranty
a a
Virgin Money Tech-Protector
aCovers loss aCovers theft aCovers goods failure aFaulty goods replaced aOption provided for upgrade aEasy barcoded purchase aValue-added consumer image aCover starts immediately aEasy sale as part of ‘connected contract’ - no FSA implications for Virgin
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Commercial Features Virgin Money Tech-Protector has been designed to offer Virgin Money a price point in line with comparable products (extended warranty, mobile phone insurance, laptop insurance), while offering attractive commission payments and encouraging further sales opportunities in the insurance lifecycle. Tailored specifically to address the requirements of Virgin Money, the following page illustrates the price points and levels of cover available to Virgin customers.
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Tech-Protector
Virgin Money Tech-Protector can be applied to both portable and non-portable technology products, offering variable features to represent relevant risks and product applications. Virgin Money Tech-Protector has been split to cover:
Portable Goods
Non-Portable Goods 1-Year
3-Year
1-Year
3-Year
Up to £150
RRP
£20.00
£34.00
Up to £300
RRP
£30.00
£50.00
Up to £300
RRP
£39.00
£65.00
Up to £500
RRP
£50.00
£75.00
Up to £500
RRP
£68.00
£116.00
Up to £1000
RRP
£80.00
£150.00
Up to £1000
RRP £130.00
£220.00
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Tech-Protector
Marketing Applications LSG have aimed to provide Virgin Money with commercial benefit across a number of areas within the insurance and customer lifecycle; those identified are: • Market Differentiator • Up-sell Opportunity • Retention and Upgrade • Claim fulfilment sales • ‘Priority Club’ membership • In-store music download
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Tech-Protector
The commercial applications of Virgin Money Tech-Protector can benefit Virgin Money in the following ways:
Market Differentiator
Up-sell Opportunity
Virgin Money Tech-Protector is a first-to-market product with the cover that is offered.
Positioned in-store and online, Virgin Money Tech-Protector is an ideal up-sell product that would expect to get between 10% and 30% penetrations on related devices.
As a ‘connected’ product, Virgin Money Tech-Protector offers an excellent added value proposition for Virgin stores and Virgin.com. Virgin Money Tech-Protector fits with the Virgin brands - offering a new innovative product targeting the needs of the Virgin customer and providing hassle-free claims and resolution.
If sold with a device there is no FSA regulative burden placed on Virgin stores and Virgin.com. With margins on product ranges being so small - the sale of Virgin Money Tech-Protector can have a very positive impact on bottom line figures margins.
No other similar product offers loss on non-network provider devices. page 17
Tech-Protector
Marketing Applications LSG have aimed to provide Virgin Money with commercial benefit across a number of areas within the insurance and customer lifecycle; those identified are: • Market Differentiator • Up-sell Opportunity • Retention and Upgrade • Claim Fulfilment Sales • ‘Priority Club’ Membership • In-store Music Download
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Tech-Protector
The commercial applications of Virgin Money Tech-Protector can benefit Virgin Money in the following ways:
Retention and Upgrade
Claim Fulfilment Sales
With a Virgin Money Tech-Protector database of customers and products, LSG will hold a valuable asset that any Virgin company can utilise to offer upgrade promotions on the customers devices.
For each successful claim made through LSG on Virgin Money Tech-Protector, the customer can be given a voucher to the value of the claim to be redeemed within Virgin stores or any Virgin company on an agreed, alternative replacement.
With shelf life of products ranging from 6 - 18 months, encouraging a turn-around of new products through Virgin stores or Virgin.com, via discounting new sales with an exchange on old.
This provides Virgin Money with ongoing sales channel and customer returns to the Virgin brand.
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Tech-Protector
Marketing Applications LSG have aimed to provide Virgin Money with commercial benefit across a number of areas within the insurance and customer lifecycle; those identified are: • Market Differentiator • Up-sell Opportunity • Retention and Upgrade • Claim Fulfilment Sales • ‘Priority Club’ Membership • In-store Music Download
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Tech-Protector
The commercial applications of Virgin Money Tech-Protector can benefit Virgin Money in the following ways:
‘Priority Club’ Membership
In-store Music Download
As part of a subscription service for downloading music (as provided via Virgin Digital), LSG can provide a wholesale price for providing Virgin Money TechProtector to the subscription base as part of their subscription package.
There is potential for cover to be provided against each music download from the Virgin Megastore, ensuring that if un-recoverable, the customer will be able to download tracks again - without any additional cost.
Additionally cover can be included to cover the music files downloaded onto the device.
This cover could be built in as a feature of the Virgin Money Tech-Protector product or as a stand alone feature on each download from the store.
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Tech-Protector
LSG Commitment to partner delivery As part of an integrated account team, LSG will work closely with Virgin Money to develop and implement a product solution that provides excellent value across all operational and commercial disciplines.
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LSG are a business developing new cultures and expectations within the insurance market.
LSG’s success in delivering excellent service is underpinned by their ability to build relationships with their customers.
As a partner with Virgin Money they can: • Offer a fast response to bespoke requirements • Be pro-active in positioning Virgin Money’s products in the chosen marketplace • Implement and deliver schemes tailored to suit Virgin Money’s business systems in weeks - not months
LSG recognise that customer service needs to be personal as well as professional, friendly and fulfiling, therefore all agents are put through a comprehensive training scheme called ‘flight path’. This sets training goals and achievements on the way to becoming a full representative of the partner brands. LSG customer service teams will be available seven days a week to suit the varying needs of Virgin Money customers.
• Offer back-end systems that are free from slow responding legacies • Provide ongoing account development to ensure that Virgin Money are getting the most out of LSG page 23
Tech-Protector
Potential Revenues There are a number of variables in calculating any potential revenues that could be earned through Virgin Money Tech-Protector. However, in order to gauge a view of the scale of the opportunity, LSG would need to engage further with Virgin Money to fully understand and realise the full potential of this product. LSG are open to discussing various commercial models with Virgin Money, from commission based deals to full profit-share joint venture entities. LSG would welcome the earliest opportunity to discuss with Virgin Money, thus ensuring that Virgin have the competitive edge and first mover advantage within the UK marketplace.
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Tech-Protector
Summary Virgin Money Tech Protector is an innovative and market leading product in that it “does exactly what it says on the tin”, providing true customer centricity and a product that delivers real value. Virgin Money Tech-Protector is a next-generation replacement product that fits with Virgin’s brand values of offering the customer a better deal, straightforward and easy to understand features backed by a value for money and quality rich offering. LSG are keen to open further dialogue with Virgin Money on this exciting initiative and welcome the opportunity to meet and discuss as soon as possible. Paul Leahy is Virgin Money’s first point of contact and can be contacted on either 01270 658542 or 07810657858, or e-mailed on paul.leahy@lifestylegroup.co.uk
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Lifestyle Services Group Unit 12, Crewe Hall Enterprise Park, Weston Road, Crewe, Cheshire CW1 6UE T. 01270 658542 M. 07810 657858 paul.leahy@lifestylegroup.co.uk www.lifestylegroup.co.uk
624/11/05