Two of the biggest problems with financial marketing
By Michael Lovas
Recent research conducted at Forrester identified the five biggest problems with marketing today. I find the first two right in the middle of the bull's eye, and directly relevant to the financial industry:
This means: 1) turning a blind eye to the information available; or 2) not noticing the changes in your target market. In other words, ignoring what your target market really wants and plowing ahead with what you want to do. Firms who become complacent leave their brand exposed and find themselves vulnerable to the competition.
Here’s a classic example: Blockbuster ignored information showing that consumers did not want to spend time in the video store. Technology had reached the point where it was far easier to distribute videos and Blockbuster wasn’t using it. Consumers wanted more convenience.
Netflix and Redbox saw an opportunity. They took action and stole the industry from under Blockbuster’s nose. Had Blockbuster adapted more quickly, the firm might not be selling off its inventory now.
Let’s take the financial industry as an example. How many years were investors forced to pay high fees just to make a simple stock purchase? Then, Chuck Schwab and eTrade kicked the industry in its knees. What did that cost the industry in terms of market share and share of investor wallet?
Let’s take your own business. It’s just a guess, but I’ll bet your client base is probably getting older and younger. If you’re approaching the younger ones the same way you approach the older ones, you've fallen behind the eight ball of complacency. The older ones might still think the IBM Selectric typewriter was the best technological invention in history. The younger ones are far ahead of us in how they think about communication, socialization and technology.
Marketers who work within a well-defined box lose their ability to differentiate themselves.
Here’s a classic example. Major airlines like Delta, United and American seem to experience endless financial problems. As a result, they resort to offering the lowest common denominator of service. On the other hand, airlines like Southwest, JetBlue and Virgin America are having success. What’s the difference?
This second group avoids the norm. They do the opposite of those majors, offering more leg room, checking luggage without charging extra fees and providing in-flight Wi-Fi. Now, let’s look at the insurance industry. Can you name some of the common elements? Could it be everything? From the white business cards to the types of products — sameness. From the jargon to the “elevator pitch” — sameness.
Several years ago, I taught a full-day program at State Farm’s home office in Bloomington, Illinois. I asked the 150 attendees to stand, one at a time, and state their name and what they do. Obviously, I knew they were all insurance agents. My intent was to show them that they were seen by their communities (target markets) as being all the same — no differentiation.
The point being that the agent who could break out of the sameness pattern would capture the community’s attention. Unfortunately, 150 people stood up and said exactly the same thing. Those agents took comfort in their sameness.
What about your own business? What can you do to differentiate yourself and show that you’re not a conformist follower? Here are a few ideas. Some of them may be out in left field, but I’m hoping they’ll spark some ideas for you:
1. Stop wearing formal white shirts and ties. Instead, wear tropical shirts under your jacket. Tell your clients that one of your goals is to be a breath of fresh air.
2. Take a photo of every new client. Send a thank you card with that photo.
3. Take the BBB plaque off your wall and replace it with photos of you in action helping your community. Show photos of you teaching reading, coaching baseball, building a house for Habitat for Humanity, greeting veterans returning from the Middle East.
4. Change the reading material in your waiting room. Instead of industry-related publications, subscribe to publications focused on travel, vacation, high-end electronics, sailing, golf, charitable activities, health, etc.
Why does this make sense? For nearly 30 years, I’ve heard one primary bit of advice from financial industry marketing experts: “focus on benefits, not features.” That advice is no longer relevant. It ceased being relevant with the emergence of social media communication. It has been replaced in recent years by this:
“Differentiate yourself through the client experience!” Realize that along with this change in advice came the emergence of consumer-driven business, and the intellectual junta of the digital generations — everyone younger than boomers (and including many boomers). Meaning, unless you operate a retirement planning firm, your next clients probably believe they are in control of all the incoming information.
This represents a primal scream event for the insurance and financial industries because they don’t (yet) seem to realize that they’ve lost control of the communication. Your target market is likely performing its own research and comparative shopping on the Internet. That means if you provide them with information that does not measure up, you will have lost more than just a sale. Then, they are apt to write a review of you and your firm on various blogs.
You might think of it like this: You and the industry are being held hostage by the very people who want you to serve them. They’re asking you to give them what they want.
When you shift your focus to the client and his/her experience, you will find yourself immediately collecting the exact information you need to avoid complacency and conformity.
Why is this important? Because many of the producers in the financial industry are sadly rooted in complacency and conformity. They will keep on doing what they’ve always done. This represents a huge opportunity for you. All you have to do is reach out and grab it.