Case Study: United Services Automobile Association
USAA.COM
COMPANY INTRODUCTION
United Services Automobile Association (USAA) provides a full range of highly competitive financial products and services to the military and their families. USAA was initially founded in 1922 by twenty-five United States military officers who decided to ensure each other’s vehicles. Since then it has grown and expanded into one of the leading financial services companies. USAA’s mission today is “to facilitate the financial security of its members, associates, and their families through provision of a full range of highly competitive financial products and services; in so doing, USAA seeks to be the provider of choice for the military community” (USAA Annual Report, 2012, p.2).
USAA is not a publically traded …show more content…
company therefore they do not answer to stockholders; they answer to their members. They rely on the members to suggest products and service that meet their need. Due to narrow membership, USAA conducts almost all of their business online. They have very few brick and mortar buildings compared to any other multi-billion dollar financial serves company. Although a minimal storefront may seem limiting, USAA has consistently received the highest customer service ratings available to financial services companies. USAA also has consistently received accolades and awards from reputable organizations such as Business Weekly and JD Power Ratings.
USAA offers many services and products which include banking, insurance, investments, real estate, and retirement planning. Within the banking category, USAA offers checking accounts, saving accounts, credit cards, auto loans, home mortgages, home equity products, personal loans, boat/RV loans, youth banking, and college products. In the year of 2012, USAA returned 1.3 billion dollars to members and customers through dividends, distributions, bank rebates, and reward, which was a 21% increase from 2011.
The USAA insurance section offers many products which supply every need for their customers. This includes many forms such as auto, homeowners, rental, valuable personal property, flood, life, health, Medicare, annuities, long term care, and umbrella insurances. They were named from the Temkin Group Net Promoter Score 2012 Benchmark Study as the number one insurance company consumers are most likely to recommend to their friends and family.
The USAA real estate section is pivotal to the specific needs of its members.
The typical USAA member spends a portion of their life moving across the United States and world as a military member. Therefore, they need services to assist them in this process. The rental section offers home and rental searches, real estate agents finders, home equity products, and mortgages. However, above all that, they offer a Movers Advantage program which members can earn up to $3,100 cash back when buying and selling a home if they use their networking services.
Finally, the retirement planning section helps members identify their personal and financial goals in order to achieve a debt-free retirement. They offer free financial planning, IRA and rollovers, wealth management, and trust services. Whether a member is separating from the military, starting a second career, or planning for life in retirement, USAA simplifies military benefits with multiple programs on their tech-savvy website in order to help meet the member’s goals.
BUSINESS …show more content…
MODEL
A business model is the method of doing business by which a company can sustain itself and therefore, generate revenue. USAA has many services which general profit such as banking, investments, and insurance. However, USAA has a different strategy than most of their competition in the financial planning sector. USAA has always operated without investment brokers, branch banks, insurance agents, or even a network of ATMs. Members and other customers access USAA services through remote channels, such as personal computer, smartphone, tablet, mail, fax, and any bank’s ATM machines. As a direct marketing company their business strategy is different and Craig Hopkins, the Vice President of Strategy and Planning at USAA, describes their approach as a business model which integrates member service across channels, life events, and products into a centralized organization called “Member Experience”, whose sole focus is to understand members’ needs, provide integrated solutions, and create exceptional experiences on every interaction (Ross and Beath, 2010, p.7).
Furthermore, USAA distinguishes itself by its simplified and easy to use website. Part of the “Member Experience” are easily reached solutions on the web or through a smartphone. Although it looks simple from the user, USAA created two shared services in 2009 to meet this goal. First, the integrated IT architecture, which synchronizes databases, reduces de-duping, and helps create digital business solutions, was created. Second, the enterprise-level innovation and integration called the Enterprise Strategy and Planning (ESP) unit was created. The overall idea is to improve the website design, reduce redundancies, and make the financial service experience extraordinary.
In order to reach these goals USAA must integrate digital convergence into every aspect of its business model. Therefore, every section must have the newest and greatest technological advances into order to meet their member’s specific demands. Within the banking section, USAA was the first in the financial service industry to offer the ability to scan personal checks on home computer or smart phone and deposit them into their bank accounts. Another convergence innovation in the banking sections allows members who are pre-approved for a personal loan to digitally sign and have the money deposited into their account in less than 10 minutes. These are just a few examples of how the banking section is using digital convergence.
The USAA insurance section also uses digital convergence, specifically with the IT department, in order to provide distinctive advantages to their members. For example, a member can easily change their auto policy online and immediately compare and contrast the overall monthly difference. More specifically, a member can increase and decrease deductibles and multiple insurance coverage options in order to reach the exact price point and/or risk association desired. Behind the simplicity of these actions are databases and super computers which use pre-programmed algorithms and complex calculators to provide an immediate quote for the member.
TARGET AUDIENCE
USAA membership is a privilege earned by those in uniform and can be handed down to their children. Membership is open to: Active, retired and honorably separated officers and enlisted personnel of the U.S. military; Officer candidates in commissioning programs (United States Military Academy, Reserve Officer Training Corps, Officer Candidate School); Adult children of USAA members who have or had a USAA auto or property insurance policy; Widows, widowers and former spouses of USAA members who have or had a USAA auto or property insurance policy while married. In addition, certain products, including investments, financial planning, life insurance and banking products checking, savings, CDs and credit cards are available to the public however; they are limited.
USAA designs its website to meet the desired intent of its members. Therefore, they analyze which pages are utilized most often and make them immediately visible as the member signs into the website. For example, after a member signs in, the first page that is presented is a comprehensive overview of all of their financial accounts and the balances on each. Therefore, each checking and saving accounts are easily visible along with every investment USAA investment balance. Additionally, they offer the option to view non-USAA accounts (in the same format) and their current balance in order to get a comprehensive individual financial summary.
USAA also offers members the ability to personalize their homepage with “tiles”.
USAA analyzed the usage of hundreds, if not thousands of their internal websites, and selected the top twenty for members to personalize on their homepage. For example, one tile can be a comprehensive account summary while another tile on the homepage could be a status of their current monthly budget plan. Furthermore, another tile could be the current market quotes and a fourth tile allows the member to view their current retirement plan or web bill pay. This is another innovative method which realizes USAA’s strategic goals; however, it also is a classic example of managing the users clicking and browsing
patterns.
In conclusion, USAA is a comprehensive financial services company which provides services to military members. They have a robust website which is the focus of their business model. They use digital convergence to innovate business solutions in every aspect of their financial services. Whether it is website simplicity, integrated IT architecture, simplified insurance quotes, or personalized tiles on a homepage, USAA’s overall goal is to be the leader in digital innovation and convergence in the financial services industry.
REFERENCES
1. Ross, Jeanne W. and Beath, Cynthia M (2010). USAA: Organizing for innovation and superior customer service, MIT Sloan School of Management
2. USAA Financial Report. 2012. USAA Inc, San Antonio Tx
COMPANY INTRODUCTION
United Services Automobile Association (USAA) provides a full range of highly competitive financial products and services to the military and their families. USAA was initially founded in 1922 by twenty-five United States military officers who decided to ensure each other’s vehicles. Since then it has grown and expanded into one of the leading financial services companies. USAA’s mission today is “to facilitate the financial security of its members, associates, and their families through provision of a full range of highly competitive financial products and services; in so doing, USAA seeks to be the provider of choice for the military community” (USAA Annual Report, 2012, p.2).
USAA is not a publically traded …show more content…
company therefore they do not answer to stockholders; they answer to their members. They rely on the members to suggest products and service that meet their need. Due to narrow membership, USAA conducts almost all of their business online. They have very few brick and mortar buildings compared to any other multi-billion dollar financial serves company. Although a minimal storefront may seem limiting, USAA has consistently received the highest customer service ratings available to financial services companies. USAA also has consistently received accolades and awards from reputable organizations such as Business Weekly and JD Power Ratings.
USAA offers many services and products which include banking, insurance, investments, real estate, and retirement planning. Within the banking category, USAA offers checking accounts, saving accounts, credit cards, auto loans, home mortgages, home equity products, personal loans, boat/RV loans, youth banking, and college products. In the year of 2012, USAA returned 1.3 billion dollars to members and customers through dividends, distributions, bank rebates, and reward, which was a 21% increase from 2011.
The USAA insurance section offers many products which supply every need for their customers. This includes many forms such as auto, homeowners, rental, valuable personal property, flood, life, health, Medicare, annuities, long term care, and umbrella insurances. They were named from the Temkin Group Net Promoter Score 2012 Benchmark Study as the number one insurance company consumers are most likely to recommend to their friends and family.
The USAA real estate section is pivotal to the specific needs of its members.
The typical USAA member spends a portion of their life moving across the United States and world as a military member. Therefore, they need services to assist them in this process. The rental section offers home and rental searches, real estate agents finders, home equity products, and mortgages. However, above all that, they offer a Movers Advantage program which members can earn up to $3,100 cash back when buying and selling a home if they use their networking services.
Finally, the retirement planning section helps members identify their personal and financial goals in order to achieve a debt-free retirement. They offer free financial planning, IRA and rollovers, wealth management, and trust services. Whether a member is separating from the military, starting a second career, or planning for life in retirement, USAA simplifies military benefits with multiple programs on their tech-savvy website in order to help meet the member’s goals.
BUSINESS …show more content…
MODEL
A business model is the method of doing business by which a company can sustain itself and therefore, generate revenue. USAA has many services which general profit such as banking, investments, and insurance. However, USAA has a different strategy than most of their competition in the financial planning sector. USAA has always operated without investment brokers, branch banks, insurance agents, or even a network of ATMs. Members and other customers access USAA services through remote channels, such as personal computer, smartphone, tablet, mail, fax, and any bank’s ATM machines. As a direct marketing company their business strategy is different and Craig Hopkins, the Vice President of Strategy and Planning at USAA, describes their approach as a business model which integrates member service across channels, life events, and products into a centralized organization called “Member Experience”, whose sole focus is to understand members’ needs, provide integrated solutions, and create exceptional experiences on every interaction (Ross and Beath, 2010, p.7).
Furthermore, USAA distinguishes itself by its simplified and easy to use website. Part of the “Member Experience” are easily reached solutions on the web or through a smartphone. Although it looks simple from the user, USAA created two shared services in 2009 to meet this goal. First, the integrated IT architecture, which synchronizes databases, reduces de-duping, and helps create digital business solutions, was created. Second, the enterprise-level innovation and integration called the Enterprise Strategy and Planning (ESP) unit was created. The overall idea is to improve the website design, reduce redundancies, and make the financial service experience extraordinary.
In order to reach these goals USAA must integrate digital convergence into every aspect of its business model. Therefore, every section must have the newest and greatest technological advances into order to meet their member’s specific demands. Within the banking section, USAA was the first in the financial service industry to offer the ability to scan personal checks on home computer or smart phone and deposit them into their bank accounts. Another convergence innovation in the banking sections allows members who are pre-approved for a personal loan to digitally sign and have the money deposited into their account in less than 10 minutes. These are just a few examples of how the banking section is using digital convergence.
The USAA insurance section also uses digital convergence, specifically with the IT department, in order to provide distinctive advantages to their members. For example, a member can easily change their auto policy online and immediately compare and contrast the overall monthly difference. More specifically, a member can increase and decrease deductibles and multiple insurance coverage options in order to reach the exact price point and/or risk association desired. Behind the simplicity of these actions are databases and super computers which use pre-programmed algorithms and complex calculators to provide an immediate quote for the member.
TARGET AUDIENCE
USAA membership is a privilege earned by those in uniform and can be handed down to their children. Membership is open to: Active, retired and honorably separated officers and enlisted personnel of the U.S. military; Officer candidates in commissioning programs (United States Military Academy, Reserve Officer Training Corps, Officer Candidate School); Adult children of USAA members who have or had a USAA auto or property insurance policy; Widows, widowers and former spouses of USAA members who have or had a USAA auto or property insurance policy while married. In addition, certain products, including investments, financial planning, life insurance and banking products checking, savings, CDs and credit cards are available to the public however; they are limited.
USAA designs its website to meet the desired intent of its members. Therefore, they analyze which pages are utilized most often and make them immediately visible as the member signs into the website. For example, after a member signs in, the first page that is presented is a comprehensive overview of all of their financial accounts and the balances on each. Therefore, each checking and saving accounts are easily visible along with every investment USAA investment balance. Additionally, they offer the option to view non-USAA accounts (in the same format) and their current balance in order to get a comprehensive individual financial summary.
USAA also offers members the ability to personalize their homepage with “tiles”.
USAA analyzed the usage of hundreds, if not thousands of their internal websites, and selected the top twenty for members to personalize on their homepage. For example, one tile can be a comprehensive account summary while another tile on the homepage could be a status of their current monthly budget plan. Furthermore, another tile could be the current market quotes and a fourth tile allows the member to view their current retirement plan or web bill pay. This is another innovative method which realizes USAA’s strategic goals; however, it also is a classic example of managing the users clicking and browsing
patterns.
In conclusion, USAA is a comprehensive financial services company which provides services to military members. They have a robust website which is the focus of their business model. They use digital convergence to innovate business solutions in every aspect of their financial services. Whether it is website simplicity, integrated IT architecture, simplified insurance quotes, or personalized tiles on a homepage, USAA’s overall goal is to be the leader in digital innovation and convergence in the financial services industry.
REFERENCES
1. Ross, Jeanne W. and Beath, Cynthia M (2010). USAA: Organizing for innovation and superior customer service, MIT Sloan School of Management
2. USAA Financial Report. 2012. USAA Inc, San Antonio Tx