Understanding Financial Marketing
In this article I will quickly provide the definition for financial marketing. Financial Marketing is the set of processes that financial services companies utilize to Attract, Engage, Convert and Retain their Customers.
Let’s quickly review some of the other terms that often come up in relation to Financial Services Marketing:
1 – Financial Asset – A financial asset can be cash, stocks, bonds, bitcoin, or any other asset that can be sold for cash. Anything you can sell for cash is a financial asset.
2 – Stock Market – The stock market is an exchange where people can buy or sell shares of publicly listed companies. In contrast, it’s not easy to buy or sell shares in a “Private Company” because they have not yet made their shares available on the stock market.
Note: Another term for “Stock Market” is “Stock Exchange.” You can use the term Stock Exchange and Stock Market interchangeably.
3 – Money Market – Money Markets are an advanced concept, but in simple terms the money market is the buying and selling of debt between banks usually on a short term basis. Retail Customers (that is not institutions) can also buy into a Money Market Fund. Money Market Funds are attractive because they can often be sold very quickly (liquidated rapidly) back into cash.
4 – Financial Market – The Financial Market is not the same as Financial Marketing. The Financial Market refers to all banks, and financial institutions that are offering loans, or other financial instruments for investment or trade. The Financial Market usually refers to the total set of institutions and their financial trading activities.
5 – Financial Securities – A common type of financial security is a “share” or a “stock”. Buying shares or stocks in a company means that you can participate in the increasing (or decreasing) value of the company. There are many other types of financial instruments such as bonds, derivatives, etc.
Now that you have a basic understanding of some terms which might arise, we can go back to learning more about the definition of financial marketing. We will also go over some of the best practices of Financial Marketing.
How big is the Financial Services Industry?
Financial services are one of the largest industries worldwide.
In 2020, the financial services sector contributed £164.8 billion to the UK economy, 8.6% of total economic output. The sector was largest in London, where half of the sector’s output was generated.
source: UK Parliament
However there’s a lot of competition between different brands in terms of attracting customers. Many customers are change financial services brands because banks regularly offer incentives for new customers.
Banks and other Financial Services must develop a well defined financial marketing strategy.
Throughout this article, I will use the term “Bank” to refer to Financial Services Institution.
However, keep in mind the financial services also include bookkeeping, tax accounting, investment management such as stock trading services, as well as the new breed of financial technology companies called FinTechs.
Phase 1 – Financial Marketing to Generate Awareness
The first step in financial services marketing is to generate awareness with potential customers. If your potential buyers are not aware of your products and services then there’s no chance at all that they will consider your offers.
Marketing Channels: Banks can generate awareness utilizing a combination of paid advertising, organic search traffic, as well as local events, partnerships, and in recent times social media.
Most often utilizing a combination of different channels will increase the likelihood of creating awareness with potential financial services customers.
Generating awareness is not sufficient to create customer, so we will move to the next phase where we can turn awareness into consideration.
Phase 2 – Financial Marketing to Create On-Going Engagement
The next phase in Marketing is creating repeat exposure. Repeat exposure is important because most potential buyers are busy and do not keep your brand or offer at the front of their considerations.
Repeat Exposure is can be a key step in Financial Marketing because the customer’s financial situation and economic conditions mean that financial offers can change on a daily basis.
The cost of getting a loan or buying stocks keep changing, so it is critical to be able to stay in communication with potential customers.
Phase 3 – Financial Marketing Hand-off to Sales Team
During the Marketing phase we want to generate Awareness, Engagement and prepare the Customer to make their buying decision.
This can include both digital marketing as well as physical marketing within the banks, or at other retail establishments. Digital Marketing including content marketing – for example creating relevant online guides and blog posts, as well as social media marketing – where the brand engages influencers can work together.
When a customer sees your offers and brands consistently across multiple channels that is called omni-channel marketing.
The opposite of omni-channel marketing would be each marketing channel providing different experiences which can feel confusing to the customer.
Now that marketing has done its job and customer is ready to buy – we want to hand it over to the sales team.
Sales should be informed about all the information which was requested by the customer during the marketing process.
This way the sales team can have a good idea of the customer’s needs right on the first sales call.
SUMMARY – FINANCE MARKETING INTRODUCTION
In this short article we explained how financial companies can develop a financial marketing strategy which allows them to put their financial products in front of the right customer at the right time in the right channel.
To learn more about selecting the right marketing agency to support your internal marketing group – feel free to reach out to us for a free consultation.
