How Digital Marketing is Reshaping Financial Services
Consumer technology is moving at a hectic pace. In stark contrast, the Financial Services industry has been extremely slow in modernizing their marketing in step with changing consumer behavior.
However, there are some trends that Financial Services companies are ignoring at their own peril. Here, I take a moment to explore the key marketing trends and the resulting opportunities for marketers.
Social Media is here to Stay
Social Media is now an integral part of daily life, however Financial Services firms have been slow to adopt social media marketing, fearing reputation risk and perceiving a lack of value in social marketing.
Ignoring the power of online word-of-mouth is no longer an option. In a world where a complaint from an annoyed customer can go viral in less than 24 hours, social media has to be taken seriously.
Financial Service firms have been playing catch-up in the last few years. In fact, their presence on social networking sites saw 31% year-over-year growth, way above average.
As 59% of customers are unaware of their firm’s presence on social media, there is plenty of room to gain a competitive advantage.
Firms can start by enhancing their existing campaigns by incentivizing customers to share socially. Whether part of an existing campaign or stand-alone, promotions are the most attractive way to entice customers to follow & engage socially.
Marketing Analytics are Critical
The Financial Service industry was an early adopter of technology that brought customer data together. However, firms have struggled to cope with the recent explosion of data from website behavior, social media interactions and other digital channels.
Customers want their Financial Institutions to be proactive and provide personalized attention. Most firms already have the data, but they struggle to harness it to deliver the right offering to the right customer at the right time.
Firms can combine CRM data with marketing analytics, and then use automation to systematically up-sell, cross-sell and nurture, based on the insights gathered.
Also, firms can use their analytics to refine targeting for online advertising to increase the related ROI.
Online Video is Exploding
YouTube is now the second largest search engine after Google, and accounts for 50% of internet traffic. Online Video is very effective; 46% of consumers are more likely to investigate a product after seeing an online video.
Online Video has been gaining popularity with Financial Services companies in the last few years, but there is a problem. Firms are making the mistake of using YouTube the same way they use TV advertising: to interrupt consumers rather than attract them.
Adopting high volume, low-production-cost video can significantly boost a firm’s inbound and social marketing success. Online video is very effective (a person can retain 95% of a video after 72 hours vs. 10% of text they’ve read) and very searchable (video appear in almost 70% of the top 100 search listings).
With the right video content, firms can then leverage their marketing analytics to target the right customers with the right video message. Also, video nurturing is an underutilized tactic among firms.
Email is Being Neglected
As customers continue to move to online as their primary method of managing accounts & relationships, email has become a key channel for communication. In the Financial Services industry however, email is still mainly used for operational alerts rather than marketing.
Compliance concerns and fear of bombarding customers has kept firms away from using email for marketing. Perhaps related, the Financial Services industry has a poor record for email marketing, averaging click-through rates of 2-3%, mainly due to poor segmentation.
Firms can leverage the data they collect from marketing analytics to segment, target and personalize emails better. This will increase engagement rates significantly.
Additionally, firms should shy away from one-way communication. Firms can use marketing automation to create a two-way conversation by listening to the customer’s online behavior.
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