The past decade has seen unprecedented changes in the U.S. financial market, particularly around technologies, regulations, and consumer relations. And these changes have had a profound effect on how financial services do their marketing.
Industry insiders have been working to address the new challenges of marketing financial services, and fortunately for those in the field, they’ve learned a thing or two along the way.
One major theme in the finance industry’s current struggles with effective marketing is technology. Finance is an industry both innovative in its pursuits and slow to adapt to changing environments – but there are ways to do better.
Here are five major marketing challenges in finance and advice for navigating around them:
The digital age has opened up the door for more players to enter the financial field. But as the financial services industry grows, so does the competition — and many companies have the same things to offer. Commoditization is the idea that the products and services offered by one company are pretty much interchangeable from the products and services offered by their competitors. Consumers have less incentive for brand loyalty when they feel they can just move on to someone else for the same things. Do this: Marketing is about more than just building brand awareness. Your strategy also needs to include a strong focus on what makes you different and the specific (and unique) ways you provide value to consumers. Use data mining to personalize messages to existing and potential clients, targeting both print and digital ad copy in a way that addresses their needs and identity.
And because consumers trust direct mail more than digital, be sure to continue ramping up your print marketing. Growing trends in direct mail make it easier to connect with your audience and stand out from the crowd.
2. Lack of Consumer Trust
Financial services aren’t exactly known for having consumer interests as their top priority. In 2016, only 8% of responders to a survey from the non-profit National Association of Retirement Plan Participants said they had faith in their financial institutions (down from 13% in 2015).
Events in the financial markets over the last decade (following the 2008 Financial Crisis) have eroded consumer trust and made it more difficult for financial service marketers to truly connect with their audience. Do this: Be transparent and focus on creating incredible customer experiences. Pay as much attention to marketing and improving relations with existing customers as you do with bringing in new ones, and use data analytic tools to learn exactly how customers are interacting with your brand and what they expect from it.
And again, personalization is key. Let your customers know their wants and needs matter to you with discounts and experience-based marketing.
3. Marketing Automation
Automated marketing is making it easier for brands to push out targeted ad campaigns. But finance has been slow to adopt this new tech, and it’s showing. Part of this is due to internal and compliance factors that dictate precisely how financial marketing can function, but it’s also due to career professionals who are reluctant to learn new things. This is no time to get left behind — and the financial sector will have to embrace marketing automation if they want to keep up. Do this: Resist the urge to stay in your comfort zone and branch out into marketing automation. You’ll be able to deliver more timely ad campaigns and make it easier for different branches to coordinate on the same message. If you’re too nervous to take the leap on your own, work with a third-party marketing firm that can set up, oversee, and analyze your company’s automated marketing. The ROI is well worth it (when it’s done right).
4. Intangible Offerings
Marketing financial services has long been more about selling an idea—i.e. wealth growth—than a tangible product. But with intangible products come the risk that things won’t work out for the customer. You have to sell future possibilities, which can be tricky when there are no guarantees. Do this: Flaunt past successes as a way to show potential clients what they have to gain. Your marketing should include real customers and their real experiences, with an eye toward targeting those experiences directly to who your advertising targets (A young business owner is going to want to see a different testimonial than a white collar executive interested in boosting their investment returns).
Incentivize customers to share their stories using gifts and rewards, and then use those stories to sell the potential inherent in what you have to offer.
You can’t talk financial service marketing without talking regulations. There are some pretty strict rules around what financial advertisements can and cannot contain, as well as a number of organizations overseeing financial ad content. These guidelines have at times stifled creativity and led financial marketers to rely on established marketing methods they already know adhere to regulatory rules — a strategy that fails to account for evolving customer expectations. Do this: Let regulations inspire creativity, not suppress it. Marketing financial services may be unique from other industries, but there are still plenty of ways to stand out. Work within the confines of industry regulations but expand the types of marketing offered, making use of everything from new direct mail offerings to innovative digital campaigns. As long as your message is within the rules, you can get as creative as you want with how you spread it.
The financial sector is constantly evolving, and today’s marketing challenges are guaranteed to evolve with them. The more you do now to keep up, the better off you’ll be when it comes to inevitable changes in the future.