The financial sector is seeing transformational changes in the way it delivers services and products across all fiscal markets.
Digital technologies, GDPR, security provisions, and the now omnipresent cloud are playing significant roles in shifting the landscape of how financial organizations should market themselves to consumers (B2B and B2C).
The new online paradigm – in conjunction with constant regulatory changes due to FTC practices, Internet commerce, GDPR, Brexit, and ongoing political instabilities – are forcing two significant shifts.
- Established traditional financial organizations are needing to realign their products and services to match the needs of digitally-savvy consumers, while still upholding ever-stricter regulatory compliance.
- Governments are actively encouraging new entrants to challenge the traditional model by developing new products and services that revolutionize what are deemed to be outdated legacy systems.
All this is because consumers and regulatory bodies are becoming increasingly dependent on technology to manage finances, handle services, and deliver secure transactions on-demand.
With that in mind, the financial sector must make significant changes in the way it markets itself. Below are our insights helping shape the marketing strategies of our clients in the financial industry.
Exceptional User Experience Builds Trust
In a digitally dependent society, the most prominent marketing challenge for financial services firms is delivering exceptional user experiences (UX) when they do not currently have the online assets to meet expectations.
These assets include website and service design, content publication and distribution, social media broadcasting and lead generation building.
One significant hurdle is that the financial services sector has traditionally created user experiences to meet ‘expert’ points of view with push-marketing tactics and to meet the needs of the financially aware who know what they want and are driven by purely financial incentives. This does not work today.
Why? Because trust in financial services companies is extremely low.
As recent stats from the Edelman Trust Barometer state, just 45% of consumers trust financial services, and the sector remains the most distrusted of all.
Digital marketing can do a great deal to eliminate this distrust by building confidence through positive brand awareness, genuine empathy for consumer needs, and delivery of financial products that match customer expectations with the highest levels of regulatory compliance.
How? By providing consumers with easy access to digital content that they can decipher and thus get the financial advice they trust for their situation.
Digital marketing can do so by projecting complete the authority and transparency financial services companies need to build leadership positions in increasingly competitive and fluid markets. This is all at a time when many institutions are stuck using legacy models of service and product delivery modes that don’t allow them to rapidly respond or scale as customer behaviors and markets evolves.
New Vs. Old Customers
Another significant marketing opportunity for financial organizations comes in the form of untapped selling opportunities to already tapped resources, i.e., existing customers.
It has long been the approach of financial services firms to primarily target new customers with offers and incentives to the detriment of existing customer retention.
In reality, existing customers that have some degree of confidence and understanding of your brand, products, and services take far less nurturing and persuasion to take up new offers that build on an existing relationship.
No doubt winning new customers creates exponential growth opportunities, but the demand to lead generation process is much longer, and closing deals much harder than building further on the portfolios of existing clients.
The further ingrained in your products and services people are, the more compelling your argument is for them to stay and utilize other services you provide. It’s all a matter of trust. And this brings greater opportunities for residual ROI.
Financial services marketing, therefore, needs to target two primary audiences, new and existing customers, with products and advocacy campaigns that match their financial wants and needs. Digital marketing platforms enable this approach better than any traditional method or system in history.
Strategic Product Offering
To meet the demands of modern UX, while catering for the needs of these two primary audiences, takes unique strategic approaches to financial product alignment. One way is to offer financial products and services to digitally savvy consumers who want to feel informed, engaged, enlightened (building their trust) so that they are confident using your company with ease of access and transparency of any hidden cost (building their feeling of being in control).
Another is to provide customers with real-time access to their assets, and instant insights so that they can manage how they perform and cater to the digital consumer today. As such, all financial services firms need to build a strong web presence, mobile responsive and agile in delivery of content and social messaging, to establish credibility that leads to better customer retention.
With the right digital marketing approach to a) target audience, b) UX, and c) product design, financial services companies elevate their brand to become fully immersive, digitally confident, customer-led.
By not having a digital marketing approach that meets these modern demands see’s financial organization miss golden opportunities that are increasingly hard to find further down the line when competitors have by then a significant head start in the world of online services aligned to digital marketing strategy.
Your website, content marketing, social media and paid advertising strategies are the bedrock on which UX meets product design meets customer alignment.
Paid Advertising As Your Primary Tactic
Speaking of paid advertising. Google AdWords has become so expensive and competitive that unless you have a large budget to compete with the global financial powerhouses, your opportunities to rank highly on search for traditional financial products are few and far between.
For highly competitive keywords and in many financial sectors, AdWords has become ultra-expensive. Which is why other platforms, such as Facebook Ads, even LinkedIn and Twitter Ads, can provide better bang for buck. They also have one significant advantage over AdWords. They can target customized audiences based on who they are, what they like, and how likely they are to engage.
That said, Google AdWords still plays a critical role because it is the platform that matches user intent better than any the other paid marketing channel. In that people performing a Google search are, by and large, looking for what they see via the Ads presented to them. On all other platforms, a paid Ad is intrusive to something else they are doing, no matter how perfect a ‘fit’ that person is for your product or service.
Which means an astute approach to online advertising is needed for financial firms, especially those with smaller budgets than the major banks, insurance companies and other financial institutions.
The good news is a smart AdWords campaign can target less competitive keyword combinations, limit reach to certain geographies, and make bid adjustments throughout the year based on robust A/B testing which provide ongoing historical insights.
This is the crucial point. Paid advertising via search OR paid advertising via social media should always be planned around user intent.
This has long been misconceived in the financial services sector, where marketing of products and services has been ‘offer-led’. Trying to entice would-be customers based on cost savings, discounts, freebies or other financial incentives.
This makes sense when price is the only factor in the decision-making process, but that isn’t the case today, and it doesn’t tap into the psychology of emotion when presenting wider or longer-term benefits that people are looking for – such as peace-of-mind, security risk aversion, transparency and ease of access.
When trust in financial services firms is at such a low (45% as mentioned above) your USP is no longer just the instant gratification of saving someone money. Service quality and reputation management are becoming just as important, if not more.
This is where your paid advertising campaigns should articulate greater authority, transparency and long-term benefits. Rather than trying a push marketing (sell, sell, sell) approach to getting your message across to those with any level of interest.
In short, price will always be the key trigger for insurance and investment products, but most other financial products – such as bank accounts, mortgages and pensions – are far more complex. Customer confidence and experience are crucial.
Financial Services Digital Marketing Opportunity
Your USP: Emotional Vs. Financial Incentives
The digital landscape has changed the way the financial services sector needs to market its products and services.
Grabbing consumer attention is one thing, but turning attention into a bona fide customer is difficult. Keeping a customer loyal is an entirely different story.
The best approach is to remain agile, marketing to people based on trends, habits and the challenges they face. Your digital marketing should be a constant reminder to people that you understand their needs, whatever the financial climate. Continuously learning and projecting your message as consumer and regulatory behaviors evolve.
To this end, pitching campaigns to segmented audiences while understanding the data/signals they provide, helps you better target customers with the products and services they need, when they need them.
It’s not about scare-mongering or constantly popping up wherever they go online. It’s about putting forward a solution to their problem when it materializes. Doing so based on behavioral traits, seasonal factors and other rational that triggers an emotional response to act.
In this regard, new fintech start-ups and digitally savvy financial companies challenge conventional wisdom. They lead the way with innovative marketing campaigns that use digital platforms to present products and services based on these trends, habits and buyer behaviors. They empower consumer choice through online channels. Establish personalized experiences people want.
Take for example, American Express (Small Business Saturday), Western Union (America Dream Sweepstakes) and Mondo (Bank McBankface). Three vastly different brands with vastly different service offerings and budgets. They have created innovative new ways of connecting with customers through the digital channels their prospective customers like to use.
Many other financial institutions are doing the same. Which makes the challenge of standing out from the crowd in a competitive marketplace increasingly difficult. The conundrum of creating fluid campaigns based on target audiences utterly crucial.
If nothing else, the financial services industry is separating those that excel at modernizing via digital channels, from those that are stagnating due to the use of legacy marketing strategies. A customer-centric approach is key, and it is no longer simply driven by financial triggers.
Why Emotion Sells In The Financial Sector
As the financial climate around the world remains volatile, opportunities exist for financial services organizations to emotionally connect with prospects and customers. Speaking with authority and empathy so that customer experience drives the decision-making process of people looking for financial advice, guidance, services and products.
Where digital marketing is concerned, this can only be successful if we choose the right emotional connectors and do so in the right digital channels. Otherwise the message will not relate to the people you want as customers.
What financial services companies should be looking to do is position their digital assets in ways that a) establish a unified brand message, b) understand the important issues affecting today’s consumer, and c) deliver real-time empowerment to customers so that they are able to make informed decisions in a world they see as distrustful, not particularly transparent nor ethical.
Where we see the greatest success is in working with financial service sector clients that need to bridge the gap in this great digital divide. Building superior digital marketing strategies for financial brands that establishes trust, nurtures relevant leads and creates a customer-centric approach that is truly engaging.
MARKETING TRENDS IN THE FINANCIAL SERVICES SECTOR
COO and co-founder of Creative Mindscape. Lover of marketing, psychology, tech and all things sport. Family man with a passion for living life outside the rat race and chasing your own dreams.