Is Financial Services Marketing Ready for the Age of Engagement?

Since the beginning of modern marketing—using TV advertising and, more recently, digital channels—most financial services marketing has employed a common approach: Talking at people rather to them—or heaven forbid, inviting an intelligent conversation.

Consider the following financial services messages currently in use in the sector, which seem “benefit-free” and generic:

“Better money habits for your financial life” – Bank of America

“Welcome to a more modern approach.” – Charles Schwab

“What if a bank could help you feel like this?” (showing happy/shining people) – Citibank

“Can you afford to trade anywhere else?” – TD Ameritrade

At a recent Gramercy Institute event held in New York City, the topic of discussion was “Financial Marketing 2018: The Age of Engagement.” An interesting perspective on trying to make financial services marketing messages more relevant, and potentially more effective.

Bill Wreaks, CEO and founder of the Gramercy Institute (above) characterized engagement as “Becoming one between the marketer and the customer” in his opening remarks. Seems like a great place to start. So how can or should this approach play out in practice? Here are some highlights from the event’s speakers / panelists:

Casey Myers, Head of Sales at Sunday Sky (a personalized video platform), observed: “Consumers have come to expect relevant experiences. If the message is not smart, they will be disappointed. Marketers like Amazon and Neiman Marcus have set the standard, with a focus on mobile devices.” Myers continued, “You need to inspire your customers to take the next best action.”

Reese Lackey, Global Head of Brand (above) from global investment manager Nuveen, remarked: “Building customer relationships is all about respect, especially when it comes to their time.” He continued, “We use the acronym DWMT, which means don’t waste my time. At Nuveen, we are working to find better ways to connect with our audience by providing valued information, with a service-oriented attitude.”

Erin Meijer is Director of Thought Leadership and Content Strategy at Guardian Life. She observed: “At Guardian, we aim to provide value through our content. We ask ourselves—‘Are we making them smarter?’ This is the new value exchange.” She continued, “We’re also not just thinking about what to say, but also where to say it….what’s the next big channel opportunity? Like user-generated content that can help validate products/services vs. promotional branded messages.”

Jodi Fronczke is VP, Marketing at online trading platform Trade Station, headquartered in Plantation, FL. She observed: “We started by developing client personas to help us better understand our customers, then used customer journey mapping to help us give our customers what they need.”

Lauren Dukes from Merrill Lynch shared that back in 2015 her company developed a client engagement approach based on the insight that their customers are strapped for time. “It’s important to provide a content nugget that offers an insight, one that makes them smarter.” She continued, “Relationships are the foundation of our business—and we need to create as many experiences as possible across the organization to enhance those relationships.”

One of the most striking takeaways from this event is what was not said: None of the panelist mentioned measurement of engagement effectiveness (such as views / social shares / comments / inquiries)—let alone any hard, business-related quantitative benchmarks like cost-per-lead, cost-per-acquisition, or measuring the ROI (Return on Investment) from a marketing spend.

It seemed that talking about the “softer-side” of engagement was the way to go. Unfortunately, this is not the best approach marketing professionals can take when asking for budget from senior management—especially in the face of their increased focus on measurable business returns and more accountability. The good news is that digital marketing can provide a huge amount of data on nearly every initiative undertaken, and the business outcomes they produce—and further validate the importance of customer engagement.

Growth Industry Watch:
Impact Investing Takes Off.

Marketing and communications will be crucial in next phase of growth.

Since 2007, Impact Investing has increasingly occupied the space between philanthropy and socially responsible investing (SRI), with a decidedly activist bent.

The goal: to make positive social impacts and ultimately create specific outcomes such as a cleaner environment, sustainable energy, better jobs, affordable housing, and more. According to the Global Impact Investing Network investors plan to commit $25.9 billion in assets to impact investment deals this year, a 17% increase from last year.

Demonstrating that impact investing is leading the financial zeitgeist of the moment, look no further than the last few days. On Oct 3rd, Morgan Simon, a veteran of social and impact investing, published: Real Impact: The New Economics of Social Change.

On the same day, Fast Company reported that Cloud-based CRM giant Salesforce has “launched a $50 million impact investment fund to invest in social enterprises that are using its cloud-based customer relationship management platform in new ways to change the world.”

Not content to simply avoid social harm, impact investing is geared towards generating a positive social impact along with financial return. So for example while SRI might seek to screen companies involved in gambling, an impact investor might be focused on how their investment creates jobs or affordable housing.

Impact investments can be found in all sectors and geographies and can take the form of equity, debt, cash deposits or hybrids. The structure of financial returns can range widely, and include interest on loans, shares of revenue, and participation in growth.

From a marketing standpoint, investors are very interested to know how these impacts measure up, and financial firms are working to clearly communicate results. According to a McKinsey study - the top concern among investors is the difficulty of comparing impact-investment firms and their products. Impact investors, asset managers, governments, and entrepreneurs need transparent communications, particularly when it comes to how those products balance non-financial impact with financial returns.

In a great example, Salesforce, already known for its commitment to philanthropy, has clearly articulated its approach right out of the gate. The company is investing in change-dedicated organizations that are using the Salesforce platform, enabling participation in their partner’s good works, and in any upside growth. One area of interest to Salesforce is employment and jobs, and the company is investing in companies that are “developing tools to promote equal opportunity and economic empowerment across the company and really around the world.”  It is reported that the group has already committed to at least four companies, each representing an area where they plan to be active: workplace development, equality, sustainability, and the social sector.

In an interview with journalist Leonard Lopate, Simon (above) notes that one of her goals in writing Real Impact was to correct mistakes and unintended consequences made by some well-meaning projects. For instance, wind farms have notoriously created land grabs such as land-grabs and micro-lending, while effective has been beset by a host of problems. The goal, according to Simon, is understanding the full impact of any strategy and incorporate social justice principals under the banner: “nothing about us without us.” One lesson for marketers: audiences may be dubious given past mistakes in this area, so be sure and clarify how your offering differs.

At every level, impact investing is an area demanding great marketing and communications. Financial companies need to clearly articulate “impact alpha,” and other participants will need to begin defining and differentiating their roles as the industry grows.

Currently one out of every five dollars is under some sort of screen, but impact investing’s growth potential is tremendous, and is expected to account for funds 10 times the amount of charitable giving in the next decade. More than four hundred foundations are involved in the impact investing sector. One way to look at the potential, the Rockefeller Foundation stated that this idea could “one day represent 1 percent of professionally managed global assets, channeling up to hundreds of billions of dollars towards solutions that can address some of our biggest problems…”

As impact investing brings together social, financial and corporate sectors, marketers have an opportunity to creatively convey some of these compelling ideas with great strategic marketing. 

The Evolution of Marketing:
From Promotion to Attraction.

Before mass media, marketing consisted primarily of word-of-mouth endorsements. For hundreds of years the word got around fast about the best craftsman in any given village– from furniture makers to bakers or blacksmiths. People told their friends and family about something good, and off they went to buy it, to then share the good news with their friends and family and so on.

Enter the heyday of mass marketing, arriving during the last half of the 20th century. In this era of increasing prosperity, growing consumer demand, and the power of television and mass media – marketers simply advertised directly to consumers and boosted their sales as a result.  This approach worked equally well for both consumer and business-to-business (B2B) products and services.

Think of American Airlines (“Something Special in the Air”); EF Hutton (“When EF Hutton talks, people listen”) Chase Manhattan Bank (“Profit from the Experience”) or Federal Express (“When it absolutely, positively needs to be there overnight”) Businesses of all sorts created intrusive messages that talked at people by entertaining them, scaring them, seducing them or being so omnipresent the messages were simply impossible to ignore. 

From a strategic standpoint marketers were trained to promote one of four points of difference: Better, different, cheaper or new. But in the hyper-competitive global marketplace, none of these differences was typically sustainable for the long-term. 

Nonetheless, if you had a sharp ad agency making well produced TV spots, and the financial resources to blast the message out there on TV, on the radio, in print ads and outdoor billboards, the sky was the limit on growth and building market share. This was the Promotional approach to marketing. It worked great until it didn’t.

In the mid- 1990s the internet came on the scene in a big way. Word-of-mouth was back in a new, powerful—and virtual--way, enabled by the ability of influential new networks that allowed remarkable ideas to spread through the population at lightning fast speed.

The web also disrupted traditional media. That business model had TV networks, radio stations, magazines, and newspapers creating editorial content or programming and then offering it to people along with paid advertising messages. People had to put up with the advertising to get the content they wanted, and still do to some degree today.

Today, via the web, consumers can access nearly all the content they want, when they want it, and usually without commercial interruption. Think of Netflix, Amazon Prime, Hulu and Spotify.

Marketing pundit Seth Godin was way ahead of the curve when he outlined this transformational marketing revolution in his book “Purple Cow” way back in 2002. He set up a paradigm that still hold true today:

The Old Marketing Rule:

Create safe / ordinary products and combine them with great marketing.

The New Marketing Rule:

Create remarkable products / services that the right people will seek out.

The new approach is known today as attraction-based marketing. It starts with a remarkable product or service. What is meant by “remarkable?” It’s something that people will be willing to remark about on social media, sharing with their friends. It talks to people, and invites a conversation. Think of it as amplified word-of-mouth.

As Godin stated “Something remarkable is worth talking about. Worth noticing. Exceptional. New. Interesting. It’s a purple cow. Boring stuff is invisible. It’s a brown cow.”

Savvy companies should still start with a sound marketing strategy: clearly defined targets, well-articulated value propositions - expressed as benefits - with plenty of reasons for people to believe the offer. Framing a “brand personality” can also help make your business more attractive.

Then marketers need to create “content” – this can be a simple website, blog posts, images, tweets and videos that quickly express your offer and reflect your brand. Put them out there on social media (or even traditional paid advertising), then use data to analyze which offers work by attracting people (and making sales), and those that don’t. Think of all marketing activity as testable propositions.

A “purple cow” in the investment management sector is manifested in the explosive growth of socially responsible investing. SRI directs investments towards companies that both provide a financial return and foster positive social change and / or environmental good.

A leader in SRI is American Century with its “Prosper with a Purpose” positioning and their promise of “Impact the Future. With every investment dollar, you make a choice for a better world.” The company also direct a portion of its profits to fund biomedical research as well as a strong commitment to helping non-profit organizations build? strong communities through the American Century Investments Foundation.

This leads us back to the power of attraction vs. promotion.

Ever wonder how Uber and AirBnB became multi-billion dollar companies? They had a remarkable idea. They delivered an exceptional consumer experience. They provided better value that met a need. They used technology to disrupt their business sectors. People really liked the services and told their friends about them. They attracted customers. Neither one ever spent a dollar on traditional marketing.

Now that’s remarkable.