The rise of financial services comparison websites has brought brand marketing challenges, says Alan Thorpe, director of financial services Europe at Acxiom
Turn on the TV and you are unlikely to get through an ad break without one of the multitude of money-saving financial services aggregators appearing on your screen. But as consumers log on in droves to the likes of confused.com and comparethemarket.com, seeking the best financial product deals, they are probably unaware of the effect the aggregators’ phenomenal success is having on the industry as a whole.
We recently conducted two polls asking similar questions to both consumers and marketers to determine people’s attitudes towards the marketing communications they receive from brands.
The survey took in a range of industries in the UK, including banks, insurance companies and credit card providers, and the overall results showed that consumers seem to be wearing the trousers in their relationships with brands, thanks largely to the advent of new technology allowing them to switch marketing on or off as they please.
In financial services, however, consumers’ attitudes were positive when compared with other sectors. In addition, they were far more approving than most marketers thought they would be.
This may come as a bit of a shock in the context of the industry being made a scapegoat for the country’s economic ills by the media and politicians but there are several lessons to be gleaned from these statistics.
Marketers estimate that in each of the insurance, credit card and high-street banking sectors, only 25 per cent of customers would feel in control, meaning they receive marketing from companies only when they want it and through their preferred media channels.
In fact, at least four out of five customers in all three of those areas gave positive responses - 80 per cent for insurance, 84 per cent for credit cards and 85 per cent for banks.
Moreover, in terms of whether consumers think financial services marketing is appropriate, relevant and well time, they again revealed they felt most positive towards financial services brands compared with other sectors in the questionnaire.
This is probably due to the popularity of the aggregators, who are only one click removed from consumers. In effect, online brokers have taken the hassle out of comparing product prices across the financial spectrum.
At the same time, despite being intermediaries, they have brought consumers closer to brands because of the transparency and convenience they offer, promoting awareness of those companies careful to make their presence felt on the comparison websites.
Engagement between consumers and financial companies has improved, leaving individuals feeling more in control not only of the hiring process but also the marketing lifecycle overall.
Aggregators have put pressure on price but have been a positive force for the industry.
They have heralded a shift in the financial services industry’s marketing dynamic from customer relationship management, where the company makes what it believes are the best offers for the individual, to customer-managed relationships, where the policyholder tells the insurer what marketing they want to receive.
The message is clear - make it relevant or consumers will opt out. Many insurers are seeing opted-in marketing rates plummet to below 30 per cent as irrelevant communications perceived as noise gets turned off.
Aggregators have effectively made financial services marketers work harder, or at least smarter. In response, some providers have launched products that play to the aggregators’ league table systems.
Marketers now need to focus on a dual strategy of acquisition opportunities provided by aggregators, along with customer retention, which historically has been cheaper than acquisition. This means building a holistic picture of an individual, using this insight to drive relevant engagement in real time across all channels. In this way, providers can break out beyond single product sales to bundling product offers - adding value for the customer but also the company, through greater basket value.
Financial services aggregators are a good example of how technology has changed the rules of marketing. Marketers must now reach the consumer at the moment they are doing something - in this industry’s case, choosing a provider.
The customer is now controlling the conversation as much as the procurement process and the successful marketers are fighting back by using real-time tech-nologies to understand how to influence or join these conversations in the right way - with consistent branding, offers and messaging at every stage.