Hitting the Mark


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To say the last two years have not been a good period for the financial services industry would be a massive understatement – but to add that there are good opportunities coming out of the recession is also not overstating things.

Financial firms of all kinds are facing a continuing struggle in the current economic environment when it comes to selling consumers on their products and services. While the economy appears to be slowly climbing from the depths of recession, one lasting effect promises to be that consumers may still be gun-shy when it comes to their money – particularly where investment vehicles are concerned.

Banks, insurance companies, credit card providers, investment firms, financial advisers and virtually every other type of company operating in the sector has to re-think its approach to marketing and communicating with its customers. Not only do they have to win over mistrustful consumers, but they are dealing with a market in which money is tight for many households and they have little flexibility.

The good news for those in the industry trying to market investment products and services is that our latest survey shows that an overwhelming majority of UK consumers consider themselves to be active investors – and nearly two-thirds of those are increasing their investment this year.

The research also shows, however, that overall a large majority of UK financial firms are doing an insufficient job when it comes to their print communications and marketing – 70% of all respondents found that the majority of direct mail they received from financial firms is irrelevant to them. It is worth noting, though, that 13% said a substantial proportion of the direct mail they receive from these companies is of interest to them, indicating that some of these firms are in fact hitting the mark.

Significantly, the research indicates that the key area where financial firms appear to be coming up short is marketing to older demographics, with only 9% of the prime 45-54 age group saying a significant amount of the direct mail they receive is of interest. A massive 77% of all respondents aged 45 and over said the majority of direct mail they get from financial firms was in fact irrelevant.

For many companies selling investment products and services, this is a worrying result, given that: more of these people are investing; more are likely to have a greater amount of money to invest; and this group is more likely to be focused on their investments, as many will be saving money for their children’s educations and planning for their own retirements.

Clearly, some financial firms are doing a good job of marketing their products and services in a targeted and effective fashion and customers are taking note. However, the research provides a clear overall picture of a strong market that is, in the majority of cases, not being communicated to effectively enough.

For firms that get their marketing strategy and execution on track, especially in this area of their business, there is a clear chance to gain ground on competitors. And the sooner they implement marketing communication plans that hit the right consumers with the right propositions, the better placed they will be to thrive and grow.

But such plans cannot be drawn up without insight into the marketplace. There is a great well of information held by most financial firms on their clients – the types of investment products they have, their apparent risk threshold, the timing of their investment activities, the way they want to be communicated to, and other preferences that would influence a company’s approach to them. There is also a huge amount of data available on prospective clients: demographic and lifestyle information that would indicate what their financial and life-stage circumstances are, which in turn would help point to the sorts of services and products they might want.

Knowing the market – understanding the consumers who invest – and communicating effectively with those people will be paramount for firms that have survived the recession but now hope to really thrive. For those companies, it will be vital to determine which clients will be worth marketing to and building an ongoing relationship with – in other words, which will be the valuable and loyal customers that a firm might be able to expand its dealings with and which are not worth pursuing.

Using data to gain insight into those consumers will be essential whether it is existing customer data being pulled together from a company’s records and analysed, or data being acquired to enhance a current database or to build a pool of prospective customers who can then be approached.

Well-sourced and properly analysed consumer data can be used to create client profiles that indicate what sorts of financial products various types of customer might want, when they want they want them, how and where they buy them – even how risk-averse they might be.

As consumers take a fresh look at how they invest coming out of recession, there will be keen competition. Those firms in the financial services sector that wish to be in a position to gain market share during a recovery need to start communicating with the marketplace now – especially those that have investment products. While the figures from the research would seem to not bode well for many selling financial products and services, the flip side is that there can be huge opportunities for those that get their messaging and their approach to the marketplace right


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