Money Marketing June 2005
The Grand Delusion - Money Marketing 2005
Written by Gerald Kreinczes. Published 30th June 2005
The nation is suffering from a savings and investment crisis. The Government has to take some blame but the financial services industry also has some responsibility and I am not just talking about the self-inflicted wounds of mis-selling and mis-managment, which have alienated many customers and will take years to rectify.
Mis-marketing bedevils the industry and this is one area where corrective action could have some shorter term benefits.
Part of the role of marketing must be to understand the customer and help devise products relevant to them. In too many financial firms, the marketing department could be more accurately defined as marketing services – more logo-cop and brochure provider than customer champion. The truth, often ignored, is that while most people are very, very interested in money, they are not at all interested in financial products. Many see products as complex, technical and scary and best avoided.
In past research, we have spoken to affluent investors who have moved funds into property, antiques, art, jewellery and so on or simply spent it on new cars, holidays, boats etc.
More recently, even quite sophisticated investors have told us of their preference for “savings” over CTF equity funds as the preferential vehicle for putting aside money for their children’s futures, as it appears, well, simpler.
The firms supplying products are often seen as big, unfriendly and undifferentiated. Attendance at just a few focus group discussions should convince all but the most stubborn that most consumers find immense difficulty in differentiating one financial services provider from another beyond the most obvious category conventions such as that is an investment company, that is an insurance company. But the contrast between one firm and another is often so fine as to be meaningless despite the millions spent.
In the companies, the language of branding is used but the reality is not understood so the concept that “your brand is only differentiated when the consumer believes it to be so” is ditched in favour of “our brand is differentiated because, after extensive analysis, we believe it to be so”.
The traditional response to branding has been to use some form of visual branding metaphor – a women in a black cape, a planet, a red phone and so on. At least this approach offers the customer the reassurance of a company that seems to be promising a degree of consistency. But, even here, consumers find it difficult to articulate what the differences are between the companies behind the branding devices.
The vogue seems to be to pretend that the company has little to do with financial services. “I like Standard Life” may help generate a certain amount of warmth towards the company but you would be hard pressed as a prospective client to work out how Standard is different.
So, how could “proper” marketing help? Understanding customers as real people rather than vaguely as high-net-worth individuals (or whatever) would be an excellent start. Then being prepared to overcome the fear of excluding any potential customer and thereby developing communications which really includes a key group would be a valuable next step.
Some companies are getting it right. M&G appears not just to have identified a particular mature age group for its print ads for managed funds, it has also shown an empathy for them, their shared past and concerns for the future and talked in their own language.
I’m sure that some younger high-net-worth individuals looked at the ads with bewilderment but the older cohort at last found someone speaking their language.
In a slightly different way, More Th>n has also identified an attitudinal group interested in added value in insurance and carried this through into communications, avoiding the price war raging elsewhere.
Many years ago, I was taught that one of the first tools to use in marketing is segmentation. The vast majority of the financial services industry appears either not to have tried to segment its market more accurately by demographics, attitudes, behaviour or whatever, or just lacks the bottle to carry the implications of its segmentation through into communications.
For most of the industry, the message appears to be – please stop deluding yourselves.