How Financial Services Brands Can Adjust to Meet Customers’ Changing Needs
Financial services advertisers have had to evolve their digital marketing strategies quickly as their target customers adjusted to the personal and financial challenges posted by the COVID-19 pandemic. “In the early days, banks started getting messages out around compassion and understanding as well as promoting their digital capabilities,” says Andrew Davidson, Senior Vice President and […]
Financial services advertisers have had to evolve their digital marketing strategies quickly as their target customers adjusted to the personal and financial challenges posted by the COVID-19 pandemic.
“In the early days, banks started getting messages out around compassion and understanding as well as promoting their digital capabilities,” says Andrew Davidson, Senior Vice President and Chief Insights Officer at Mintel Comperemedia, an expert on the financial services industry. “It soon became clear that they needed to start promoting things like credit card deferral programs.”
One of the biggest challenges facing those advertisers, as with advertisers in most other verticals, is that consumer spending habits have been drastically altered. Demand for financial services products such as credit cards has taken a hit during the pandemic as unemployment rises and people scale back their spending on nonessential items.
“The evidence so far from earnings reports is there’s less demand for credit, particularly among prime consumers,” Davidson says. “We’ve reached something of a strategic pause when it comes to (new customer) acquisition. If you step back and look back at the lens of financial services, there has been some flattening of activity in digital banking.”
Just because consumers are less likely to convert now than they were at the start of the year doesn’t mean financial advertisers should completely abandon their digital marketing programs.
“They have to have this funnel of new accounts coming in,” he says. “They have to maintain acquisition activity. Right now, it may be difficult but they’ll have to start building it back up.”
But while demand is currently down, Davidson sees this period as an opportunity.
The reason – Many people are working from home these days and consuming more online content than usual. An attentive and increasingly connected audience right now creates a breeding ground for digital innovation, he says.
“There’s a big opportunity for brands to try new digital techniques and reach out in different ways,” he says. “There’s nothing to lose. It seems like consumers are more engaged. Everyone’s at home.”
With that in mind, Davidson says advertisers in the financial services space should adhere to these three tenets heading into the rest of the year:
Be Obsessed with All Things Human and Look to Take Personalization to the Next Level
Social distancing as the vast majority of the world has done since March has people craving some sort of human connection. Davidson suggests that this presents an opportunity for financial services brands to focus more on ways to communicate in a more powerful way by using emerging digital marketing tools like real-time social media in order to engage in a conversation with potential customers on their own turf.
“The idea behind that is we’ve seen that we’re spending so much time on our technology and we’re seeing brands be more creative with digital channel, whether it’s live streaming on Instagram or being creative on Twitter,” he says.
Innovation to Meet Changing Consumer Needs and Emerging Pain Points
Retailers that are coming out ahead right now are those that are taking extra steps to address any concerns a consumer might have. This includes tactics such as promoting click and collect or home delivery in order to provide that extra level of service and convenience during these times.
Financial services advertisers have a similar opportunity, Davidson says, if they acknowledge that we’re living in a different world and adapt their products to better meet consumer needs.
“The majority of consumers say that contactless payment is important,” Davidson says. “Contactless payment is becoming important. We’re not seeing banks promote that heavily. It’s not really for the banks to say that contactless is safer. You shouldn’t necessarily go out and say that this is safer, but you should be actively promoting it. You’ll see this elevated more and more in the messaging.”
Maintaining Short Term Value and Planning for Longer Recovery
Davidson says the financial services brands that come out on top are the ones that offer short term value to engage shoppers while at the same time promoting messages of resilience and optimism for the long term.
For instance, it might make sense for credit card companies to offer higher cash back on groceries or food delivery, given that that is where many people’s minds are currently focused. Additionally, offering favorable bonuses on purchases now for future travel, Davidson says, could be a bold way of appealing to those who may be ready to pack a suitcase and go.
“People are desperate to go on vacation,” he says. “There might be pockets of the population who are hesitant to start traveling again, but frequent flyers will want to get on planes.”
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