The series ‘Mad Men’ was set in the advertising world of the 1960s. The industry was in a pivotal period of change, marked by the rise of mass media and television advertising. While the world has changed massively since then, much of the marketing behavior of the 60s still exists.
Today, the marketing function as well as the entire financial services industry overall, is in a stage of transformation — impacted by the confluence of new marketing channels, new technologies, and new skill sets required to succeed. At a time when traditional marketing methods are being challenged, so are the expectations of the marketing department in traditional and challenger banking organizations.
The status quo is no longer acceptable. Marketing departments, and the people who perform the marketing function within banks, credit unions and fintech firms, must embrace these changes and find ways to differentiate themselves and their organizations in the marketplace.
Two industry veterans, who co-founded and chaired the new-age Metro Bank and the digital-first Atom Bank, along with , a 30-year financial services marketing specialist, have teamed up to create a tremendous 12-point manifesto for a new financial services marketing model.
Their new book, , is a well written how-to guide that makes the case that the fast-changing financial services world urgently needs to rethink the entire approach to marketing.They define the key aspects of this approach, including:
- Demystifying the task of building a brand in the financial services sector
- Defining a fresh attitude of mind to manage consumer distrust, rather than tackle the impossible task of restoring trust
- Developing the type of strong, distinctive purpose essential to build real consumer engagement
- Learning from the fast-emerging academic discipline of Behavioural Economics to create new levels of marketing effectiveness
- Understanding the extraordinary power – but at the same time the inevitable limitations – of the era of digital, mobile analytics and big data
Not Just More Marketing, Better Marketing
The future of marketing in financial services is all about successfully identifying consumers’ real needs, and finding the best channel, timing and message to create interest, initiate a sale and build a foundation for engagement. In this book, Thomson and Camp detail the forces of change that demand a new approach, and then discuss 12 components of the new approach to bank marketing.
The authors look at the challenges of consumer trust, the importance of big data and advanced analytics, and even the challenges and opportunities of corporate culture. What is interesting about this book is that the authors do not shy away from the ‘elephant in the room,’ as it relates to the deficiencies of past marketing practices that are holding veteran financial marketers back.
In this exclusive interview, Thomson and Camp show why their book is intended to be read by more than just those with ‘marketing’ in their title. They also provide some insights into why this book is a timely guide to moving from ‘mad men’ marketing, to the future of digital technology and personalized messages.
How Important is Branding in Financial Services?
Lucian Camp: The importance of brand varies to some extent depending on product sector, target market and distribution channel(s), but on the whole it’s very important and becoming more so. The biggest current trend in retail financial services is that consumers are becoming more and more responsible for their own financial decision-making, and in overcrowded markets where it’s difficult to make choices on any other criteria, brand has a key role to play.
Brand is also increasingly important within organizations. A growing number of financial services’ best business leaders are realizing that a strong, clear and differentiated brand is one of the most powerful tools they have to shape internal behaviors and build the culture they’re seeking to establish.
What Skills Are Lacking in Today’s Financial Marketing Departments?
Lucian Camp: First and foremost, the marketing skill most lacking in many firms is the ability to persuade non-marketing colleagues, including the most senior management, of the value of a marketing-led approach. Marketing is still seen far too often in its hopelessly limited, outdated role as the “coloring-in department,” producing the ads and the websites while the actuaries, the accountants and others get on with the important stuff.
To a significant extent, this happens because marketers are complicit in limiting the perceived value of their work – failing to make a strong enough business case for a different approach.Part of this is due to the inability to understand and present quantitative values of work completed to more financially oriented peers.
How Important Is Data Analytics in Financial Marketing?
Lucian Camp: Big data, artificial intelligence (AI) and machine learning open up a whole new world of opportunities for financial services, but that world has to be explored and developed carefully, one step at a time – there are many dangers in it, and plenty of ways to go badly wrong.
Ultimately, we share the widely-held view that it’s now becoming possible to move from a product-centric to a customer-centric approach, and that’s a change that will benefit everyone, marketers very much included. But the challenges of this massive evolution, not least for organizational structure and for roles and responsibilities within it, are extremely difficult. We see very little sign that larger, longer-established institutions have started to deal with them yet.
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How Can Behavioral Economics and Innovation Impact Financial Marketing?
Lucian Camp: We see behavioral economics, and behavioral economists, as hugely important and powerful new allies for financial marketers. At the heart of this collaboration, behavioral economics is about insights into people’s behavior, and ways in which behavior can be effectively influenced. Financial marketing is, and always has been, about the very same thing.
When were developing their innovative and radical theory of loss aversion, they were in fact following in the footsteps of many great direct marketing copywriters, including for example the author of the legendary product ment headline “Cash If You Die, Cash If You Don’t.”
But, at risk of sounding a little cynical, shrewd marketers recognize that when it comes to increasing their clout and influence in the boardroom, calling in support from Nobel laureates and emeritus professors provides a whole new level of credibility.
Also, it would be wrong to suggest that direct marketing copywriters have already made all the available discoveries about consumer behavior. As the list of proven, properly-researched behavioral biases climbs up through the hundreds, many of them provide us with wonderful unexplored potential for great new marketing strategies.
How Should Bank Marketers Help Rebuild Consumer Trust?
Anthony Thomson: Frankly, we don’t think that trust can be restored in financial services, and we think that’s a good thing. It’s important that consumers have a healthy distrust for providers of most things – that is they don’t take them at face value. If they didn’t have that degree of skepticism, then they would be even more exposed to scammers and other confidence tricksters.
This cynicism helps keep them safe. For us, the challenge facing financial services providers is about managing distrust. Many bank and credit union providers delude themselves that customers do trust them.
Psychologists tell us that there are two types of trust: Cognitive and Associative. Cognitive trust is about competence – Do I trust my bank to be competent? To ensure my money is in my account? That my card will work in an ATM? The answer is, generally, yes I do. Associative trust is about intention – Do I trust my bank to have my best interests at heart? No I don’t! I think they will take advantage of me every chance they can. This mistrust will not go away, and financial services providers need to accept that and get on with managing consumers’ mistrust.
What was the Most Surprising Finding When Researching for Your Book?
Lucian Camp: Probably the extent to which the marketing community is still divided – some might say confused – in its view of what marketing actually is. Our research among financial services marketers clearly demonstrated two very different positions, and a large grey area in between .
At one extreme, “Capital M” marketers seek control – or at least influence – over all activities that touch the customer. It’s helpful to think of these as the famous “Seven Ps of Marketing,” including Product, Price, Place, Promotion, People, Process and Physical Evidence.
At the other extreme, “lower case m” marketers focus on only one of these: Promotion. When asked about this issue in principle, the first group is bigger than the second, but disappointingly, when asked about current practice in their own firms, the second group is bigger than the first.
Where Should Financial Marketers Start?
Lucian Camp:If thinking about retail banking, where the focus is on products and services delivered to individual consumers, bank marketing departments must start – and for that matter finish – with those individual consumers. For all sorts of reasons, banks and credit unions have been able to achieve enormous commercial success over many years while treating their customers appallingly badly – with ham-fisted clumsiness at best … and with dishonesty and deceit at worst.
The wheels aren’t going to fall off this kind of banking overnight, but they are starting to wobble on their axles. The race is on to reinvent traditional banking… before consumers vote with their feet and reinvent banks for themselves.