Banks, building societies and insurance companies face unique marketing challenges – challenges of a different nature to other industries.
New regulations and an ever-changing landscape mean a richer, deeper understanding of the marketplace and customers is crucial – especially if businesses are to benefit from emerging opportunities ahead of their competitors.
Keeping up with the latest Financial Services marketing regulation – keep the customer first
In Financial Services today there is greater focus on making sure customers can afford the products being marketed to them. New legislation like the Mortgage Market Review as well as scrutiny from the Financial Conduct Authority means brands need to put the customer first and be confident that they have in place the right processes to ensure both their brand and their customers are protected.
Affordability comes down to much more than verifying an individual’s income. Extra layers of financial and lifestyle insight can help brands go much further and build up pictures of customers on which to base decisions.
It’s important that financial companies sell to a customer, not just their financial ability. By measuring how sophisticated products are and identifying which customers they’re appropriate for, it is possible to minimise risk while demonstrating compliance.
Treating customers fairly is a massive point. It’s crucial that companies take every step to sell the right financial services and products to the right people based on a rich and detailed understanding of those customers. In addition, interacting with customers based on individual preferences, influencers and behaviours builds loyalty, trust and advocacy.
Once engaged with a consumer companies need to ensure they continue to treat them correctly. Circumstances change and what was suitable and responsible one month may not be so the next. Only with a rich data selection will companies be able to take into account customers’ external lives and treat them responsibly.
Predicting how customer s will react to future regulation (such as the pension review) is extremely difficult but critical if companies are to offer the right level of flexibility and service. Analysed and modeled data based on customer intentions is key and will provide the required level of insight in order to provide the right service at the right time.
Encouraging loyalty and retention within Financial Services
The emergence of online comparison sites over the past 15 years has given customers a wider choice when buying financial products online (insurance being a classic example). For brands this means it is increasingly difficult to connect with customers to provide a positive brand experience. The customer experience is one of the biggest factors for encouraging loyalty and retention – as any marketer will tell you.
How can brands improve loyalty and retention?
Developing a predictive customer journey model is will help as a data-driven model clearly shows how customers really behave and reveals patterns and trends that can highlight when customers leave and who they are – providing the opportunity to interact with them before they do so.
Acting positively in response to customer needs will improve the customer’s experience. Key triggers for financial decisions such as moving home and retiring, and insight into financial holdings and attitudes, can help brands engage customers with the most relevant offers and information.
Customer experience is crucial and brands that can ensure their communications are relevant, personal and well-timed will be more successful at keeping customers happy and increasing customer loyalty. This ability is, of course, reliant on sophisticated customer insight.
However, it’s not all about discounting and price. Financial services businesses should consider defining those seeking a higher level of service and whether they would be willing to pay more for it. It could well be that in today’s instant online world certain customer segments want reassurance, guidance and increased security and don’t mind paying a little more for it.
Making inroads into new markets within Financial Services
Every brand wants to expand into new and previously untapped markets. For instance, despite its huge potential the wealth market remains largely untapped, especially from a digital perspective.
Brands can make inroads into new segments by taking a closer look at market sizing and how they compare to others in the industry. This way brands can spot gaps and anticipate customer needs before competitors.
Many brands should look more closely at their existing customer base in order to understand where they could offer more. For example, where the average loan provided to one type of customer is actually lower than average for the rest of that group.
When considering a new area in which to expand financial brands should ensure they have a detailed understanding of the individuals within each group so that they can connect at a granular level with desired customer groups. An understanding of characteristics such as preferences and behaviour will facilitate the building of relationships with specific groups.
Putting the customer first is the solution
As with much of marketing it all comes down to putting the customer first. What they want, need and how they behave. With detailed insights financial brands can more easily communicate and craft personalised and tailored experiences. This is especially important in the financial sector when the pressures of responsible lending mean brands need to know who they’re talking to and what they should say.
For more information on marketing in Financial Services, or to find out about the services provided by Experian Marketing Services provides, visit The FSS section of our website.
Experian Marketing Services is the leading global provider of consumer insights, targeting, data quality and cross-channel marketing. We help organisations intelligently interact with today’s empowered and hyper-connected consumers.