Why financial services is the most difficult industry to market
Sometimes lauded as the colouring in department, marketing is seen by some as glamorous. By others, it's a possessive extension of a product or sales function. In B2B financial services, it’s often mistaken for the golf umbrella and pen department. However, marketing is in the business of spending money to make money. It’s mostly measurable and is accountable for some of the most significant discretionary spending of shareholder money across the institution.
Consumers know pretty accurately how much debt they are in, but most have not thought much beyond offsetting a mortgage. Retirement is a dirty word. They likely know to the nearest $100 what they have in their savings account, but cannot answer to the nearest $1,000 or even $10,000 the balance of their super, whether they have adequate salary and life protection, or the value of their home and contents.
National Australia Bank conducted research that found that two million Australians are experiencing severe or high financial stress, while a further 10 million are living with some level of financial worry. Money is emotional and an enabler to a way of life. It’s what causes friction in relationships, and contributes significantly to individual health and stress. Banks are seen as a necessary evil. Safe as houses in times of financial volatility. There are a small group of faithfuls that rave about their regional bank, building society or credit union, where the “Cheers” factor is strong and everybody knows your name. Yet people aren’t running away from banks, or even walking, leaving financial services marketers wondering what it takes to evoke a strong connection with their brand. Amongst the big four in Australia, there may be tiny market share movements across a quarter, but the full year picture shows that nothing much changes, despite everyone’s best efforts.
Why is it so hard for financial services brands to move the dial?
For marketers, there doesn’t seem to be a silver bullet. Apathy and inertia run strong. Open rates, click-throughs, engagement and conversion to sale remain steady. Compression of budgets is a fair reality of shrinking margins and of media digitisation. So many inspiring pitches and creative concepts that could be real game changers, never see the light of day.
So many inspiring pitches and creative concepts that could be real game changers, never see the light of day.
Again, we ask why?
Because big data is done on a cost-conscious scale. Customer-centricity is a principle that cannot be supported by the system. Because legacy systems take an aeon to change. Because legislation is a real mood killer. Those, no smaller than 9 point disclaimers, flourish in abundance. There is just so much that cannot be said from a regulatory perspective, and because, if a brand does say something that may be slightly controversial, challenging or attention-grabbing, it could be deemed “off brand”.
Own. Worst. Enemy.
How do you win?
There’s a metamorphosis occurring in the financial services industry. Financial institutions are competing with and evolving into technology services companies, and the warp speed of digital disruption has seen innovation in tech ignite a revolution in the way business is done and in what consumers expect. Disruptors have been able to connect money as an emotional enabler, to a better way of life; and have found a synchronicity between their solution, and how they tell their brand story.
And this is where it becomes interesting for financial services marketers. It’s time to get back to basics. Disruptors are capturing the attention and wallets of consumers with a cocktail of truth, simplicity, an honest exchange of value, as well as effectively employing a considered advocacy strategy.
Ironically, simplicity as a concept is easy, but much more difficult to implement, especially in a heavily regulated sector. Yet, it’s working for some by stripping away the jargon, the heavy brand stamps and cutting to the chase. Simplicity in distilling the core consumer truth; in building underlying propositions; in visual design, in language and with content. For inspiration, take a look at Wealthfront & PolicyGenius. Both successfully get to the core of those overwhelming and stressful consumer truths, and define the very essence of the problem, making the proposition easy. Their marketing is relatable, with clear language, leading the consumer to an obvious and simplistic answer.
A useful tool in multi-variant testing, the value exchange is nothing new to financial services marketers. However, if you can use the offer as a cornerstone of your proposition it becomes a compelling reason for consumers to take notice. First Direct in the UK has led the way in the art of the offer, with the £100 switch. It’s an offer that’s been around since their inception, over a decade ago, and remains a staple in their proposition. A value exchange doesn’t have to be a financial incentive, either, it can be delivered through a compelling content strategy. Give a little, get a little. Simple.
The use of effective advocacy is under-utilised. Stash cleverly launched their consumer investment app this year with a relevant, targeted investment in PR. They’ve unashamedly and deservingly leveraged the resulting advocacy, and are reaping the rewards.
There’s never been a better time to approach your marketing like a disruptor, even if you’re anchored by conservatism and brand guidelines. It’s exciting to watch the rise of Zuper, SocietyOne, Spaceship & uno take on the main players (sometimes with their backing, and definitely with their talent), with true customer-centricity and serious marketing game.