April 20, 2006

Selling Money Using Emotion

Financial marketers enjoy huge brand awareness but dramatically less brand loyalty.

For some reason it’s been this way for a long time. Why? My guess is myopia 

Banks, insurance companies, credit card issuers, financial conglomerates and other peddling cash or the promise of future security chronically underestimate the role of emotion in making financial choices and money decisions. The fact that very few financial marketers really connect with their customers might explain the conventional wisdom which favors maintaining multiple relationships to mitigate risk. And yet  institutions see a greater share of every consumers’ wallet as the Holy Grail.

Too little understanding of perception, persuasion and personal experience among target segments is compounded by too much reliance on product features. The numbers guys cook up the products. They run the numbers often without any understanding of who might use the product and how they think and behave.

In most financial institutions a “new” or variation product is easy to craft and if only X percent take the offer, the profit numbers add up quickly. Take rates for the most innovative financial products rarely crack 10% of the targeted universe and many great ideas and cool products have died because the target customer didn’t understand or appreciate the offering. Its no wonder favorability rankings for banks, insurance companies and credit card issuers are generally low.

Money is the most intensely emotional topic you can raise with anyone. It presses more buttons than sex, relationships, family members, jobs or pets. Most people are anxious about money and finances. They want their money to go farther and to do a better job of financial planning but never actually get around to doing something about it. Consumers don’t know who to trust on this subject and are intimidated by the complexity of money issues and associated rules or regulations especially because they have little formal education or training on money matters.

In most cases people make spur of the moment financial planning decisions on the first day of a new job. They fill out the forms, check a few boxes and never revisit those choices again. Very few ever really understand what they are buying and if the truth be told demographics and psychographics drive most of those choices.

To change the current state of affairs and gain a shot at upselling and cross selling millions of exisating customers, financial marketers need to craft messages that resonate with discrete consumer segments. One size doesn’t fit all. Life style and life cycles matter and not all “Soccer Moms” or “Upwardly Mobile Urban Singles” think or act alike. Add to the creative challenge the notion that changing routine, often unconscious, behavior is the most difficult communication objective

Cracking the code on financial marketing communications begins by getting inside consumers’ consideration set. The creative process has to be rooted in understanding

  • Attitudes toward and usage of specific financial products.
  • Attitudes about money, lifecycle events and financial resources.

  • Lifestyle issues affecting likely user segments

  • Demographic and psychographics by segment   
  • Social networks and the influential role played by Spouses/Partners
  • Language and imagery preferences by segment

  • Channel and media preferences

Apr 20, 2006 5:27:22 PM | Marketing Strategies

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Danny Flamberg

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