Understanding The Challenges Of Marketing For Financial Services Professionals
Creating and implementing a winning marketing strategy can be a tough chore for any type of business, but it is arguably the most challenging for those firms engaged in financial services.
Six Top Reasons Financial Services Marketing Is Particularly Challenging
“Blah” Subject Matter. Let’s face it: reading about asset allocation, tax efficiency, or diversification is, for most people, not terribly exciting. But, while not exciting, they are still important. Therein lies the challenge from a marketing standpoint: how do you create excitement and buzz about topics that don’t lend themselves well to flashy marketing? Dynamic, compliant content is possible, with the right mix of creative marketing and industry know-how.- Complexity. Yield curves, average annualized returns and bond ladders can be complicated subjects, both for the end-consumer and for the marketer tasked with creating material. In an effort to write at a level that consumers will understand, sometimes financial services marketers will try to “dumb down” the message. However, doing so can create huge headaches from a regulatory standpoint (more on that later), and it’s also doing the reader a disservice. The challenge is to interpret and describe difficult concepts in a way that readers will “get,” while engaging them to want to learn more.
- Consumer Trust. After the scandals of the last decade, including the highly publicized Ponzi scheme perpetrated by Bernie Madoff, investors are skittish when it comes to financial services firms, and for good reason. Any perception that a firm or its salespeople are too “salesy” can send a potential client running in the other direction. The tone of marketing communications needs to strike the right balance between knowledge and experience, and salesmanship.
- Embracing the Digital Age. Financial services firms have been slower than other industries to adapt to using social media to communicate with clients, but having a social media presence (and using it effectively) is critical in today’s digital environment. According to data reported by Salesforce.com in October 2015, there is evidence that spending on digital marketing is up for financial services, to the tune of a 14.5% increase in spending over 2014 levels.
- Reaching the Next Generation of Consumers. A financial firm may have been working with different generations of a family for decades, but if their marketing communications don’t “speak to” the next generation, they may not be able to retain the business over the long-term. Marketing messages that appeal to one generation may not appeal to, or may even alienate, another generation. The key is striking the right balance, so marketing messages appeal to clients at any stage of life.
- Regulatory Considerations and Restrictions. Regulatory concerns are probably the biggest challenge facing financial firms today. Financial services organizations are subject to a laundry list of regulations; depending on the types of products and services the firm offers, they may be subject to rules promulgated by the SEC, FINRA, state insurance departments and/or the Department of Labor. The myriad of rules (and their interpretations) can be complex and confusing, and violations can have far-reaching consequences for firms. Indeed, a review of the SEC’s enforcement actions for 2015 shows that disclosures and communications, while usually not the primary reason for enforcement action, nevertheless both played roles in many of the 807 actions taken last year. Because of the fear of being “next,” many firms choose to be as conservative as possible in their marketing effort, in order to stay under the regulators’ radar.
Financial services marketing materials can build and keep clients’ trust and loyalty, and can utilize social media channels to attract the next generation of clients without being overly conservative, boring or complicated. All of this is possible while still being in full compliance with regulatory requirements, but it is critical that marketers have their finger on the pulse of the industry, fully understand the rules and regulations that apply, and understand how to operate within that framework to create dynamic, effective content.
For more information about marketing strategies for financial services firms, and to find out how you can take full advantage of the inbound marketing and social media services we offer, contact us.
