Hat trick: retaining customers, finding growth and achieving attractive returns are not easy in today's mature financial markets, but a handful of companies are doing all three.

A few financial service companies that have learned how to focus on and uniquely serve customer niches are enjoying disproportionate growth and profit despite overall insurance market maturity.

Differentiating your company and driving mature market growth requires five integrated initiatives:

* Build customer insight: Insurers have an extensive relationship history for existing customers. Superior knowledge of the distribution intermediary and end customer can give a company a competitive edge.

The Hartford's Planco LLC is dedicated to the financial adviser, and its singular channel focus means it lives and dies by the success of the adviser with its end customer. Planco's closeness to the adviser has led to award-winning service and new product innovation. The result: 28% compound annual growth rate over six years.

* Define value to target segment: Knowledge of the customer must be combined with segment/industry/company knowledge to inform product development. Conducting needs analysis to find the gap in current competitor offerings must be integral to the sales process.

Genworth has targeted seniors and pre-retirees with a defined-benefit need for a dependable income stream as a new market and has designed new products including Retirement Answer and the Clear Course group variable annuity to address this need. Genworth is betting on the sweeping demographic trends and pension market trends to fuel this segment's growth.

* Execute a unique customer experience: Crafting an experience that delights customers, demonstrates a way of doing business that is mutually beneficial and causes you to stand out is challenging. The good news is that in a mature market with highly homogeneous products, well executed small differences can make you unique. Studies have shown that the first six months of a new client's experiences are critical.

For example, Lincoln National's Benefit Partners used technology to create a single, coherent view of the customer for its benefits businesses. It has streamlined claims processing, allowed customers online submission access, provided broad status monitoring and created new transparency and efficiency for customers and distributors. In a segment where growth has been under 2%, BP has achieved 15% compound annual growth rate over the past four years.

* Nurture customers as partners: A key to customer loyalty and retention is demonstrating understanding and concern for the client's situation. Listening to them and soliciting what they have to say validates their importance.

A commitment to them is demonstrated through jointly developed products tailored to their priorities.

Northwestern Mutual has long had a special relationship with its policyowners, who literally own the company. It was among the earliest to pursue an "enduring, trusted relationship" with clients through a needs-based, holistic planning process. Its focus on a "business of relationships" with clients and financial representatives has earned Northwestern Mutual a reputation for customer satisfaction and a spot as "MostAdmired Company" in its category in Fortune magazine. It has also brought continued growth and scale in their market segment.

* Escalate front-line customer learning: The speed of change is increasing and companies must adapt to the rate at which new opportunities appear and are pursued. Flowing front-line customer input into decision processes and speed in executing new product/service/pricing initiatives are the new competitive advantage. In the sales force this means explicitly channeling new client/market insights through Monday sales meetings, flowing them up through management and landing them on the chief executive officer's desk for decisions by Friday. For most companies this will require a re-engineering of the cadence of management meetings and the connectedness of the sales force to management decisions.

ING Direct grew from a successful pilot in Canada to the leading international direct bank in eight years. Listening to traditional banking customers' need for simple products with straightforward value was the basis for ING Direct's pilot concept. Getting the pilot concept approved, acting on initial positive customer response

and ultimately authorizing $41 million for its U.S. launch in 2000 was the distinctive customer-focused commitment. That commitment, and the speed in decision-making, has taken assets to $62 billion in 2006.

Contributor Donald E. McNees is a consultant with the Tillinghast practice of Towers Perrin. He can be reached at [e-mail].