UNION BANK SCHOOL OF MANAGEMENT

Presentation on Case Study of

MERILL LYNCH : SUPERNOVA

BY

Abhishek Soni

KNV Chinna Rao

V.B.Sahay

Kamlesh Tiwari

Yuvaraj Dhage

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MERRILL LYNCH

• Established in 1907• The prominent financial management and advisory

company – serving governments, institutions and investors throughout the world.

• Delivering services to individual clients (retail brokerage) through stock broker and financial advisors (FAs)

• Merrill Lynch places client relationships first and is proud to conduct or business based on five unwavering principles: Client Focus, Respect for the Individual, Teamwork, Responsible Citizenship and Integrity.

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MERRILL LYNCH BEFORE SUPERNOVA

Financial Advisors(FA) – Merrill Lynch delivers their services through FA

Customer interaction – Only when the customer calls

Compensation for FA – Share of revenue or % of revenue generated from annuitized

How FAs work – Customer acquisition is prime goal

What others feel about Merrill’s (FAs) – Best in the market04/09/23 Mep-4 3

CUSTOMER SERVICE BEFORE SUPERNOVA

Three aspects of relationship critical to client satisfaction:

1. The frequency and quality of product

2. Rapid response to problems

3. Attention to details( Personal Life events)

Constraints of FAs before Supernova? Poor Communications with clients Lack of time to contact clients Unprepared, Unorganized and Reactive Hard to respond to problems quickly Loss of additional business

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SUPERNOVA

Why Supernova - Merrill Lynch’s maximum FAs rarely contacted their clients to offer them new investment products, which actually create customer dissatisfaction.

What is Supernova – It is the name of business process to manage client relationships originated in Merrill Lynch’s Indian-polis Office.

Origin of Supernova – It is a Idea of Rob Knapp, head of Mid West Dist office whose “Customer Satisfaction” ranked last among 32 dist in country in 1995

Object of Supernova – To create the ‘Ultimate client experience’. What it look like? Then came………

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12-4-2 Client’s minimum annual contact 12 monthly contacts w/w 4 portfolio reviews and 2 face-to-

face meetings.

Problems for FAs – Large client base(avg. 550 per FA),

Not organized, Time constraints,

Changes in Supernova – Financial Planning described as Segmentation Organization Acquisition

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SEGMENTATION

Appropriate number of clients – 200 per FA based on different criteria.

Client’s minimum asset - $1 million at Marrill lynch

Choice of client through a spreadsheet model

What about other clients? – Transferred to other FAs or Financial Advisory Center – served through toll-free number

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ORGANIZATION

Supernova provides “administrative support” followed by “help getting organized”

Administrative support through Client Associates by way of daily Folder System

The Supernova service promise using 12-4-2, Segmentation, Organization guaranteed - You will have a multi financial plan in place You will be contacted by FA at-least 12 times every year Response within one hour and resolution within 24 hours

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ACQUISITION Each year FA to acquire some new high-quality clients

Least promising clients to be transferred to other FAs or Financial Advisory Center

Now FAs find 2 to 4 hours everyday for client acquisition

Referral through existing prosperous clients

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PROCESS OF ADOPTING SUPERNOVA

Spread through road shows by users(FAs)

Two part pitch to sell supernova – How good it felt to be delivering

“the ultimate customer experience” Plan, Process and Discipline

Support for FAs adopting Supernova: FA buy-in through road shows, persuasion by managers. Adopting supernova through segmentation, 12-4-2, organization

and acquisition

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CHALLENGS IN IMPLEMENTATION

Economic backdrop Politics and recognition Follow up/support Client expectations Changing role of some FAs Misinterpretation Inclusion of Client Associates

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Discussion Points: outcome

• Customer focus initiatives– Adopting Supernova for excellent customer service

• Customer satisfaction tracking– 12-4-2 Formula

• Customer retention initiatives– Providing improved continuous financial service

through Supernova Model

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Discussion points: outcome

• Service delivery design change– Quick response with updated financial advise

• Customer understanding & service process– Updated Folder System management

• Branding initiatives– Supernova FAs

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Strengths

• Proper work distribution • Excellent customer service using 12-4-2• Organized working environment• Segmentation of clients

Weaknesses Dependence on limited customers Increased client expectations FA freedom decreased

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Learning Generated

The Case Study tells the need of Customer Service Excellence modeling for Customer Satisfaction.

The mechanism of Serving Customer always requires improvement in service delivery design as per the need of hour.

Become innovative & pro-active to implement service-

process like Supernova with 12-4-2 contact discipline, segmentation, organized for acquisition of Customer.

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