White Paper. Financial Services & Lifestages: Unlocking New Success in Your Marketing

Transcription

1 White Paper Financial Services & Lifestages: Unlocking New Success in Your Marketing

2 Overview Today, it s no secret that implementing and maintaining an effective marketing strategy is absolutely necessary to financial services providers marketing success and ongoing business growth. However, the operative word here is effective. While most financial service providers already have this essential marketing program in place (about 95% of them), we will cite examples of and explore reasons why the current strategy status quo is falling far short in terms of customer engagement. This paper will examine in detail the potential cause behind and impact of this lost marketing opportunity within the financial services industry and explore the relevant research on consumer and digital content usage, marketing tactics currently being used, and our recommendation on how to maximize the value of marketing across consumer lifestage segments and multiple marketing channels. and Financial Services Consumers Most, if not all, research shows that today s consumers rely heavily on the internet for information when doing research on financial services and products. In particular, financial services customers prefer as their number one method of learning about new products and services, and the correlation is growing stronger every year. For example, over a third of financial services customers preferred in late 2013, and a September 2015 study almost two years later shows that customers still prefer Financial Services & Lifestages: Unlocking New Success in Your Marketing 2

3 and even more overwhelmingly so. In a related study, half of all smartphone owners in the United States (don t forget - that s the great majority of people between the ages of 18 and 54) want to have an sent to them in regard to new financial products, such as mobile wallet offers. However, not all consumers are alike when it comes to consuming financial information. According to an AOL survey conducted in November 2015, one-third of online Millennials in particular watch videos on financial news, recommend services to others, or make financial decisions based in part on an article or blog post they read. The same survey showed that these respondents were regularly checking their balances and monitoring financial asset performance online (77% and 37%, respectively). Still, even though they are consuming video content and relying on word of mouth for information, when it comes to communication from financial services institutions themselves, 59% of Millennials prefer it to be through . Source: Mintel Financial Services & Lifestages: Unlocking New Success in Your Marketing 3

4 Generally speaking, financial services customers are digitally active and receptive to digital marketing communications from their institutions, and the research shows that is a safe bet when it comes to their contact method of choice. Is Our Marketing Working? This is not an easy yes or no answer more of a sort of. As mentioned above, at the bare minimum, almost all financial service providers are using , and that s a great start. Better yet, the industry even has some pretty strong results to show for it. Movable Ink published a report in late 2014 that revealed financial services as a leading industry whose customers spent the most time reading marketing s, with 50% of readers spending 15+ seconds doing so. Financial service providers also enjoy some of the highest open rates (38-48%) across all industry verticals, though one could argue that this is a byproduct of the higher importance of financial transactions and related to customers. Additionally, customers inherently trust financial services brands more than those in other industries. In fact, Vision Critical reports that 9 out of 10 adults (18+) surveyed said they have trusted at least one financial services brand in the past 12 months, which is greater than any other industry. These are all excellent indicators of success until you consider what happens after these openers and readers are done opening and reading. Financial Services & Lifestages: Unlocking New Success in Your Marketing 4

5 2 What s Happening After We Send the ? Looking deeper into a recent Epsilon study on marketing metrics, we found a surprising and possibly alarming insight regarding financial services marketing results versus other industries. Using other industries as an example, it would be reasonable to assume that with higher open rates would come higher (or certainly at least comparable) click rates. Yet financial services providers click-to-open rate (CTOR) metrics are not achieving the same level of results. In fact, they are actually much lower. Click-to-open vs. Click-through When evaluating the effectiveness of their marketing campaigns, financial services providers have historically relied on a few standard metrics such as deliverability, bounce rate, open rate, and click-through rate (CTR). But CTOR is one key metric many financial services providers are overlooking. CTOR measures the relevancy and context of an by telling you how many consumers who actually opened the clicked through. To more clearly demonstrate this, it s important to understand the difference between CTR and CTOR. One is not universally more telling or important than the other, but in the context of this conversation, CTOR is more relevant. CTR is a measure of clicks from all s delivered, but CTOR takes into account only clicks from s that were opened, i.e., whether customers engaged with content in the after opening. Financial Services & Lifestages: Unlocking New Success in Your Marketing 5

6 The data shows that although the financial services industry enjoys a significantly higher open rate than other industries, as much as 200% higher, its click-to-open rate is falling far short. For example, the Credit Card & Banks CTOR of 8.2% is less than half of that found with CPG s and 37% less than the overall industry average of 13.1%. Despite high open rates, the financial services industry is failing at getting customers to follow through and engage with their content, which illustrates both a major challenge and opportunity for the financial services providers who address it. Credit Card & Banks CTOR of 8.2% is less than half of that found with CPG s 13.1% overall industry CTOR average Financial Services Industry 37% less than the overall industry average Financial Services & Lifestages: Unlocking New Success in Your Marketing 6

7 So Why Is Our Not Resonating? One reason behind this discrepancy in relevancy and engagement is illustrated in a January 2016 study from Mintel on Lifestage Marketing in Financial Services. The study examines by generation, age, marital status, and parental status the differences in how people get their financial information and the media channels most likely to elicit a response. Two of the key findings include: Different generations use different media channels for financial information Younger generations are getting their financial information from a wider variety of media channels than older generations For example, Millennials are utilizing to a greater degree social media, video, and TV to educate themselves than, say, Baby Boomers who are accessing traditional financial advisors for their needs. It also showed that Millennial women are harder to reach digitally than Millennial men. And regarding targeting Hispanics and African Americans, the same research shows that the former are easier to reach, both male and female, due to their usage of a greater variety of media, and the latter are more easily reached through television, as they are less likely to use any medium for financial information than anybody else. Financial Services & Lifestages: Unlocking New Success in Your Marketing 7

8 Our key takeaway from the Mintel study is the fact that different generations of consumers rely on a differing combination of sources of financial information, making it imperative that financial services providers carefully deploy and integrate among their other consumer marketing channels and touchpoints. Additionally, financial services providers must strategically design their content first to meet the unique needs of each lifestage audience segment and second to support and enhance their content across all sources of information. Based on this research, we believe the financial services industry as a whole is failing to take this more nuanced and strategic approach in their marketing efforts and is instead relying on a dated mass media strategy of sending blanket messages that may not reach the intended audience, and the is not used in the manner intended. This in turn causes the Financial Services & Lifestages: Unlocking New Success in Your Marketing 8

9 resulting low CTOR results versus other industries that are fully utilizing lifestage-based strategies and achieving greater levels of relevancy with their customers. Making the most out of your financial services marketing requires a change in perspective. How to Turn This Challenge into Success Making the most out of your financial services marketing requires a change in perspective. The goal should not be just to use as a primary communications channel but also as a supporting channel based on your campaign objectives and your customers lifestage segments. To accomplish this, you first have to identify and tag your customer list into the appropriate lifestage segments using existing file data, appended data, and/or behavioral data. During this process, including and correlating any additional information you have on your customers should be a priority, as it will give you more granularity and allow for more precise targeting. Once you have your in-house files updated and in order, you can implement a series of tests to ascertain the right mix of both primary communications and secondary or supporting communications to achieve your specific goals. For example, the Mintel study shows that Millennials and the younger igens are gleaning financial information through more modern forms of marketing, such as social media and word of mouth or friends and family. As a result, financial service providers could target these lifestage segments with relevant refer-a-friend program tests, each supported with robust marketing campaigns. This strategy effectively leverages unique lifestage Financial Services & Lifestages: Unlocking New Success in Your Marketing 9

10 behaviors by introducing young people to new products and services via word of mouth while simultaneously strengthening the relationship with the existing customer. , in this case, acts as an integrated supporting channel rather than a primary educational channel. In contrast, sending this same refer a friend to the older Baby Boomer audience would fall flat as the Mintel study showed they prefer sourcing financial information more directly from a financial advisor. Here, a savvy financial services provider could deploy a series of educational tests that dynamically add the appropriate advisor s name, picture, and contact info and achieve much greater results over time. We haven t forgotten about Generation X, either. Along with Millennials, they show the strongest interest in accessing financial services information through video content. A smart financial services provider could deploy s tests to this audience with enhanced call-outs to video links and video-enabled landing pages. By measuring the video engagement and usage patterns across the tests, you can then identify the optimal video content for larger scale deployments and success with this audience. Financial Services & Lifestages: Unlocking New Success in Your Marketing 10

11 These are just a few examples of how lifestage strategies can be leveraged for greater levels of marketing success. However, the general messaging and content of your s is only the beginning of what you can customize according to lifestage. What about the imagery used in your s? Do you think different hero images would appeal to customers at different lifestages? These are practical elements to test and determine the effect. You can do the same with any and all aspects of your s. You can test different subject line and preheader copy to see what resonates with customers at different lifestages to optimize your open rates. Perhaps some age groups would prefer seeing different parts of your higher or lower on the screen, or perhaps customers in later lifestages would prefer if the font size in your s were increased and the text thus easier to read. You can test all of these and more, and once you determine your customer s preferences based on lifestage, you can reformat your s to render accordingly by default. The potential for customization and personalization in your s is limited only by the robustness of your data and your willingness to experiment and test. This is where being able to tie related customer data into your list really pays off. For example, is there a difference between single versus married Millennials in their preferences? What about between Baby Boomers with grandchildren versus no grandchildren? The possibilities for testing, customizing, and improving your s according to lifestage are endless. Financial Services & Lifestages: Unlocking New Success in Your Marketing 11

12 Parting Thoughts The rapid expansion of media channels has changed the way we access financial information. People of every generation and lifestage utilize different combinations of media to get the information they want. While marketing by itself can be expected to deliver a consistent level of success, financial services institutions have an enormous opportunity to develop new integrated marketing strategies that are finely tuned to their customers lifestages and generate significantly higher ROI. At the end of the day, your holistic marketing strategy has to ensure that you re spending time and resources on the right channels and targeting the right people within them. Financial Services & Lifestages: Unlocking New Success in Your Marketing 12

13 Authors Alex Oravitz Business Development Manager Alex s daily focus at Response Media is on business development, researching prospects and determining opportunities to help brands and organizations acquire new customers and grow their businesses. To support business development efforts, he also co-manages the agency s content marketing program, helping to provide reliable industry insights to prospective clients and further drive inbound leads. Doug Breuer Chief Operating Officer With 25 years of business management and marketing experience as an entrepreneur, consultant and senior-level executive, Doug has worked with a diverse range of world-class clients including Procter & Gamble, IBM, The Home Depot, AT&T and Nokia across numerous industries. He currently oversees Response Media s operations, financial systems, human resources and marketing disciplines. Previously, Doug served as a partner and director of Ketchum, Atlanta, overseeing the Technology, Consumer Brand, Healthcare, and Interactive Services practice groups. He has also held executive positions in the fields of technology marketing and software development. Quentin Blasingame Developer Quentin s work at Response Media includes managing marketing programs as well as front-end development for both s and landing pages. He also manages Response Media s content marketing efforts and administrates the agency web site. Prior to joining Response Media, Quentin was part of a major publisher s digital ad operations team and has been part of web development teams for various corporations, universities, and government agencies in both the United States and Canada.

14 Alex Oravitz Business Development Manager (770) Medlock Bridge Rd., Atlanta, GA P: responsemedia.com