John: "Average consumers" are a thing of the past – they simply do not exist any more. Nor is it any longer possible to separate customers into the traditional categories like "Eco-buyer," "Aldi buyer," and the like. Multi-optional consumption is the new word of the day – almost all consumers now pay attention to price as well as quality when making purchases. The only difference is what exactly they buy.

For example, a family might buy groceries at Aldi and fruit and vegetables at an organic supermarket in the morning, have lunch at McDonald's, then go shop for a suit at Hugo Boss and summer fashions and children's clothes at H&M, following this with dinner at a good restaurant. Today's consumers embrace the whole range of products and services available to them. The old "either-or" culture has been replaced by the "I'll-have-that-as-well" principle.

John: Discounters and own brands have seen a dramatic rise in sales in recent years, with even those earning a good salary now looking for value for money. This growth is now slowing down gradually, though.

What many people have hardly noticed, however, is that in the same time period, the premium segment has also grown strongly. It is only in the mid-market segment that there are problems, as shown by the difficulties department stores are currently suffering.

In general, people today are less consistent – we notice this not only where brand loyalty is concerned, but also in election results, for example.

John: The effects of this change in behavior are making themselves felt more slowly in financial services due to the longer closure and purchasing cycles, but here, too, there has been a general decline in customers' loyalty to one company. Fewer and fewer people stay loyal to one financial services provider, preferring to simply select the offer that suits them best in every area, depending on the situation.

For example, when it comes to the complex area of life insurance, with its long-term policies, many people consciously choose a financially strong premium provider, but insure their car as cheaply as possible over the internet. This multioptionality makes it increasingly difficult to thoroughly exploit cross-selling potential.

However demand for insurance services has risen since 2000, thanks to the increase in private pension provision and the increasing need for private insurance policies like occupational disability or health insurance. Thus the market is expanding and developing.

John: They need to respond to the changed requirements of their customers, positioning themselves clearly so as to appeal to the different target groups. Customers want to know exactly what a company stands for and what benefits its products and services have to offer. This is obviously more difficult and more complex than it used to be, because as I said before, one and the same customer can have totally different expectations depending on the product or service in question.

But a clear profile and statement of benefits to the customer combined with good marketing will help to emphasize the company's strengths. A positive example from the financial services industry is the campaign launched by Allianz to market accident insurance for senior citizens. Above all, it clearly communicated the benefits to the target group.

It is also important to serve the different sales channels. In 2005, almost 17 percent of new insurance policies were not closed directly with insurance companies, but via banks, brokers or other financial intermediaries. The internet, too, is becoming an increasingly significant sales channel.

John: Simplifying processes and focusing on customer service is definitely a step in the right direction. To give you an example from personal experience: I'm an Allianz customer myself. The last time I moved, I had to send three different letters to three different Allianz addresses – that was really quite time consuming, and as a customer, I would appreciate it if that would change.

Since Allianz is a premium provider, people have higher expectations than they do of other insurance companies, so it is not enough to achieve an average level of customer satisfaction. If improving customer satisfaction is one of the goals of the restructuring process, then it is a good thing. The competitors are sure to follow suit, because customers today expect significantly more, particularly from premium providers, than they did just a few years ago.

Karsten John is a Graduate in Economics and Division Manager of financial market research company GfK Finanzmarktforschung in Nuremberg.

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