Financial Services Industry Responses

Promotion and Marketing

Branding

Market consolidation, takeovers, re-positioning and an ever increasing number of players and products that appear similar, yet claim to be different, are all contributing to confusing consumers and customers. A strong brand can project a new image and can be one of the few sources of competitive advantage.

Brands often relate to the consumer and often emphasis the softer attributes such as values, beliefs and meaning. Such brands are harder to emulate as they are a behavioural attribute based on culture. When these attributes are reflected in the organisation's products, services and actions then the result is customer's empathy, reassurance and trust and hence loyalty. But when branding is simply a promotional exercise, it can be more than a waste of money, it can actually create a negative reaction.

Examples of branding exercises include:
 

• Lloyds TSB is addressing its merger with its "In union: Working together to bring you more" campaign.
• Prudential's new softer image with the "Talk to Prudence" adverts.
• Clerical and Medical with its "Make time to talk" aimed at busy professionals.
• Birmingham Midshire Building Society using its Investors in People program to supports its "We'll exceed your expectations".
• Allied Dunbar emphasing the unpredictability of life: "For the life you've yet to know".
• Sainsbury's Bank reminding consumers of its quality food with "Fresh banking from Sainsbury's".

Direct Marketing

A whole plethora of techniques are being used to reach consumers:
 

• Direct Mail: In the second quarter of 1996 banks boosted direct mailings from 55m to 66m items and insurance companies from 36m to 46m items. This increase is despite of (or because of) the increased accuracy of targeting by means of segmentation and database marketing techniques. Overall expenditure on direct mail in all sectors has increased 155% in the past 10 years. For 1 in 5 of top 3,000 UK companies they spend more than 75% of their total ad spend on direct mail.
• Telesales: We have already made many mentions of the in-bound direct telesales operations. Companies with dedicated sales forces are very active in out-bound telesales to provide a steady flow of leads.
• Media and Television Advertising: Media advertising, promoted with instant response 0800 numbers available almost all hours, are now a standard tool in the armory of mass marketing organisations. With their high capital and running costs, and low conversion rates there is a tendency to push through the volume. Hence companies are tending to use them for no-hassle products / customers.

Purchase Incentives
 

• see Provide Value Added Options and Discounts above

Niche Marketing

Many smaller players are aiming to understand, attract and exploit niche markets. They then use price to discourage unwanted customers. (e.g. have high minimum insurance cover to attract high net worth individuals; have high ratings to avoid owners of sports cars).
 

• Home and Legacy with its minimum building sum insured of £250,000. It is backed by Commercial Union, Lloyds of London, NIG Skandia, and Norwich Union.
   

Next is Cost Efficiencies

External Resources

1. Relationship Marketing in the Financial Services Industry, Abram, Hawkes plc, 5 April 1995
2. Through the Loop - MarketLoop, 1998, Where Next For Loyalty Programmes?, Through the Loop Consulting Ltd, June 1998

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