Marketing In Financial Services & Products
Defining target customers at the best of times is a tricky affair, but into that mix add an economy that is still not hit peak form and sustained intense competition and even the best of marketers run the risk of being caught flat-footed.
Increasing demand by simply cutting costs or even witty memorable advertising will not cut much ice either.
The central challenge in selling financial services usually starts with not really knowing who is one’s potential customer and therefore what products and pricing should one offer. The result- Almost all financial service providers end up as clones of each other in almost all aspects of the business and being generic becomes second nature.
The temptation to slot potential customers into neat demographic slots is second nature to all of us. After all, this is Segmentation, Targeting, Positioning- 101.
Unfortunately, this does not hold true anymore.
Let’s take two individuals who are a potential target for say a brokerage firm. Both prospects are of the same age, have similar educational backgrounds, live in the same social milieu with similar incomes. To be segmented and targeted in the same manner then? Not anymore.
Even though both these prospects are in the same apparent target segment, what they individually desire from their brokerage firm could be very different. Prospect A could be somebody who is extremely comfortable with human interaction, is well informed, likes to delve into details and is investing in the market after much prudent thought.
Prospect B, on the other hand, could be somebody who is more savvy online, does not believe in spending too much time on how her stock portfolio is doing and is perfectly fine going with her broker’s advice. Both prospects’ needs from their brokerage firm are vastly different.
The experiences that each desire from their service provider is different and driven by their individual personal context. Such different experiences would mean that the channels they seek to engage with the brokerage firm would differ. The competence required of salespeople would differ, perhaps even the products and pricing they individually seek would differ substantially.
Therefore we now have situations where even though ostensibly individuals belong to a single segment when in fact they are chalk and cheese.
Customers want brands to respect their individuality and cater to their specific experiential needs. This new approach to segmenting and targeting customers, this transition to Experiential Segmentation is a challenge for traditionally focused organizations.
And here is where organizations would need to learn to leverage the abundance of data that lies within and the host of data on social media to gain deep customer insight, then utilizing such insight to segment potential customers on the basis of their experiential needs as opposed to the current demographic approach. The insight and the experiential segments then lend themselves to sharper and more relevant targeting.
Such an approach also helps organizations move away from the “let’s target a broad segment and hope to attract at least some part of that segment” spray paint approach to one that is more focused, resource-effective and thus more profitable.
This article has also been featured in “BFSI Vision” Publication and can be accessed here