What does "value for money" really mean?

If you're an organisation genuinely committed to providing "value for money" for your customers, what does this phrase really mean?

If you're operating in the financial services sector the Regulator (FCA) is becoming more and more interested in how you prove you're providing value for money. Basically a good starting point for any external scrutiny will be with "following the money" ie which products and services contribute most to profits.

A recent Oliver Wyman research report for the insurance industry looked at this aspect of "value for money". It suggested that companies:

• review their products, justifying any disproportionate levels of profit and what this means for customers.
• review policy conditions, eg. are their high excesses or exclusions which effectively reduce the value for the customers
• review the impact of any "hidden charges" again because this might reduce the overall value for the customer
• review the impact of the value/cost of selling bundled products and add-ons to improve returns on low-margin core products.

 And of course making sure that the products are still relevant to customers over time as their circumstances change.

This approach is good practice for any business but it does actually mean that a product or product range might have to be fundamentally changed or withdrawn altogether so it's probably a pretty "big ask" for most organisations. But in the regulated industries, proving value for money is going to become an important part of demonstrating fair treatment and better outcomes for customers.