Uppsala universitet

Table 1.
Assessed levels of tangibility, complexity, and comprehensibility in three different
types of insurance.
VARIABLE

TYPE OF INSUR-
ANCE
Auto insurance
Home insurance
Commercial
insurance
Tangibility
4
3
2
Complexity
1
3
5
Comprehensibility
4
3
2
The purpose of a matrix like this is to show where efforts must be made in order to be
successful in marketing services which, with a low degree of tangibility and a high degree of
complexity, are relatively more difficult to understand. In order to make a complex product

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more tangible for the customer, the provider must put efforts into raising the customer’s level
of comprehension, and this must be one of the focal objectives of the marketing strategy.
Although intangible services may be difficult to comprehend, the relationship
between the buyer and the seller is not. Thus relationship management, by focusing on and
thereby establishing an interdependent relationship where information is mutually given and
mutual trust is experienced, becomes the means by which the buyer can be helped to
comprehend the offered service. Attention is no longer on the core service: the intangible
insurance service and its implications. Instead, in a good strategy for confronting intangibility,
the tangible relationship between the seller and the buyer becomes the focus.
In addition to the distinguishing features of services in general and financial services
in particular that have been described above, there are also two other characteristics worth
mentioning. These are fiduciary responsibility and two-way information flows between
provider and customer. The latter refers to the implicit responsibility of financial organisations
for the management of their customers’ funds as well as the financial advice supplied. It is also
very much a case of mutually exchanged promises between the two parties in each financial
services transaction. Furthermore, there are large investments in time and efforts required by
both parties in a financial relationship in order to acquire the necessary experience and
information. From the customer’s point of view regarding the assessment of the service
provider’s reliability, it is usually a fact that once satisfied, the customer will more likely remain
with that financial institution than incur the costs of searching for and evaluating alternative
suppliers. (McKechnie, 1992)