The Financial Times recently reported on this year’s advertising effectiveness awards. All three winners (M&S, Vodafone and O2) achieved their success through campaigns targeted at existing rather than new clients.
Ad campaigns are like any other form of comm-unication. They need to resonate with the target to be effective so the communication needs to be relevant and, if possible, about a current issue that has high priority with the consumer.
For financial services professionals, this acts as a reminder that having invested the time and effort to secure a relationship with a client/customer, the chances of benefiting from further communication/ targeting of campaigns at them must be greater.
If you are known and trusted, there will be a significantly greater chance that your communication will be heard and this means that the chance of securing a return on the time and effort expended will be greater.
Effective communication depends on many things but it starts with proactivity. A business cannot be developed by merely responding to requests, especially where the deliverables are intangibles that have, too frequently, been shown not to be “front of mind” for most consumers. That is why, for example, we have a protection and pension gap.
There is no shortage of issues to be proactive about. Retirement planning and estate planning are two obvious subjects that spring to mind.
If you can match areas of high interest with those segments of your client base who are likely to be interested, you should have the basis of an effective communication. Then it is about how you tell it, so to speak.
Gary Hamel and CK Prahalad in their book, Competing For The Future, spend time considering the importance of balanced business activity with existing clients and securing new clients of the right type – those who have a need for and will value and pay for your services.
For both categories, the authors say that there will be stated and unstated needs. Dealing with stated needs is easy. All that is needed is a proper and timely response. In connection with financial services business, obvious examples will include responding to a request for an Isa or a mortgage or a pension. Certain financial services products and financial advice are more likely to be “demanded” than others.
Factors that contribute to the creation of this demand will be general publicity that raises the importance of the subject in the mind of the consumer. Ultimately, though, the demand is likely to spring from positive or negative anxiety. In other words, a desire for something or a desire to avoid something.
As mentioned above, the existence of the well known pension gap and the less well known protection gap is a direct result of individuals not being sufficiently anxious about the financial effects of not having enough to live the life one aspires to in retirement or one’s dependants not having enough to live on in the event of the main earner’s death or critical illness.
Where sufficient latent demand does not exist, there will be insufficient “stated needs” for a business to develop its profits and capital value and that is where proactivity comes in. It is obvious really.
Hamel and Prahalad categorise this business activity as dealing with the unstated needs of clients, regardless of whether they fall into the category of existing or prospective clients. Both categories will have stated and unstated needs.
For financial advisers, given the nature of what they are dealing in (advice and financial products), sadly, too many of their “deliverables” will fall into the unstated needs category. That is why proactivity is so important for any business that has aspirations to develop.
In connection with the subject I raised at the beginning of this article – the comparative effectiveness of communication with existing clients, what are the “hot topics” that could be communicated to existing and prospective clients in order to generate a response that could lead to action that will improve their financial lives and that of the business starting the communication?
Well, here are a few subjects that just might elicit a response that leads to activity.
i: The proposal permitting maturing child trust fund accounts to be rolled over into Isas.
Target: Parents, grandparents.
Communication: The importance for parents and grandparents of providing in advance for the costs of higher education and contribution to property purchase.
ii: The continuing uncertainty regarding alternatively secured pensions.
Target: All pension savers.
Communication: The alternatives to Asps, including non-pension savings vehicles with no constraints on how benefits are drawn.
iii: The greater difficulty in effective estate planning due to GWR, the Poat and now the new trust alignment rules.
Target: Those over-60s with estates in excess of the nil-rate band.
Communication: The role of protection plans in trust and, for those with invest-able funds, the possibility of planning through discounted gift trusts and loan trusts.
These are just some of the hot topics to be proactive about with your existing and prospective clients.