The Importance of Digital Marketing In Financial Services

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Fundamentals are important in anything you do. As Jim Rohn, author, motivational speaker and mentor to Tony Robbins, once said:

“Success is neither magical nor mysterious. Success is the natural consequence of consistently applying the basic fundamentals.”

Having great fundamentals are as important in digital marketing as they are in anything. The profession is constantly shifting to new places and adopting new technologies. Every now and then, it pays for marketers to reexamine their fundamentals.

The financial marketing landscape is quickly shifting to new, unforeseen territories. Some firms are implementing chatbots, artificial intelligence (AI) and other cutting-edge technology solutions. Others are still playing catch-up; designing websites, getting on social media and finally beginning to create digital content. The digital world is extremely competitive and you need to be prepared for it.

This article will discuss a few reasons why you need to get serious about the fundamentals of digital marketing.

1. The Great Wealth Transfer

Younger generations will be inheriting $30 Trillion from baby boomers over the next 30-40 years. Financial service firms, including advisors, brokers and banks, need to prepare to court these digital natives if they wish to continue managing the wealth currently held by baby boomers. This shift of wealth can be a never-before-seen opportunity for FinServ providers, or it can be the event that leads to the extinction of many members of the FinServ community. Advisors, brokers and other FinServ firms, who do not get on the digital bandwagon will lose their client base. They will be unable to attract younger clients, and as baby boomers begin to transfer their wealth, outdated FinServ providers will quickly become irrelevant.

If you cannot communicate in a way that speaks to younger audiences, you will be one of the FinServ providers who loses clients and capital quickly. The younger generations expect social interaction and digital communication, even with their FinServ providers. To gain the trust of generation X, Y and Z, you will need to be present digitally. Check out this article to learn more about marketing to millennials. 

Communicating in ways and places that speak to your audience is a key fundamental to digital marketing. Consider what your messaging is, and how it speaks to your target audience. Can you easily be reached online? Is your website engaging and able to draw people in? These are key factors to consider when rexamining your digital marketing fundamentals.

2. Young Adults Using Social Media

FinServ providers aren’t going to have to wait very long to feel the younger generation’s impact on their business. Do you actively target millennials? They are far more likely than their parents to pick their FinServ provider through internet research and social media. Research by McKinsey showed that two thirds of the buyer’s journey touch points in finance are consumer-driven. The consumer-driven touch points include word-of-mouth (sometimes taking place on social media), online research (using a search engine to find information) and customer reviews (both offline and on websites such as Yelp).

These younger generations, such as millennials, basically require you to have a high-quality website in order to gain their trust. If FinServ providers don’t have a strong digital marketing presence, they risk becoming irrelevant. Digital marketing includes being present (and active) on social media, having a quality website and communicating with prospects via the channel(s) of their choice.

Remember, there are 2.3 billion people using social media, you should be one of them. Engaging and sharing quality content on social media is an excellent way to attract clients. Social media use has become a fundamental piece of the digital marketing equation. Information gets spread online through social media. Every generation uses at least one social network en masse. Not having a strong social media presence to share and spread content, news and as a touch point for communication is a huge mistake in digital marketing. Strong use of social media is a fundamental of digital marketing.

3. Baby-Boomers Love Social Media Too

Baby Boomers love Facebook. They represent about half of Facebook’s user base, and more than half of adults over 50 use some form of social media. You might not be aware of that fact, but the last decade has seen a major digital transformation. Everybody, from the youngest consumers, to the oldest grandparents are now active on social media and regularly use the internet.

The gap between the average person’s expectations for technology options, and what technology options FinServ firms provide is very, very wide. This gap has always existed. Financial service providers are slow to react to new technology. Compared with other industries, technology leaders in FinServ are behind the 8-ball. Just over two thirds of CEO’s in the financial sector are worried that they are too slow adopting technology.

If you want to grow your client base using digital marketing, social media is a fundamental aspect. Everybody uses it, and it has become a primary source of information for a large number of consumers. There are some aspects of the digital transformation that are often poorly implemented due to poor fundamentals.

So, what are some of the reasons financial service providers are so slow reacting to the digital transformation?

Compliance

The main reason financial service firms are so slow on the adoption of digital marketing is compliance issues. FINRA has guidelines for oversight of content, but many leaders are worried about compliance issues involved with the adoption of new technology. They are worried that confidential information can be stolen, and that the new technology will not aid in oversight. Another worry is that the solution won’t make a meaningful impact on compliance timelines. Compliance is a very big deal in FinServ. However, that does not mean you should be gun-shy about adopting digital marketing tools and tactics, especially when there are marketing and compliance solutions built especially for financial institutions.

Digital marketing is essentially a requirement for growing any business these days, therefore you need to have your compliance requirements sorted out before beginning. There are many solutions to help with this process (such as Digital Agent). Compliance is such an essential, fundamental aspect of digital marketing that it needs to be dealt with as soon as possible. Once you have a compliance system in place, you can begin content marketing, using social media, and engaging with customers online, without fear of breaking an industry regulation.

Leadership Disconnect

Another reason why FinServ firms might not adopt digital marketing practices or invest in technologies, is because their leaders do not know of their existence. Older people might not realize that there are many, many demographics who spend a large amount of time on social media platforms, simply because they don’t use them. They justify this anti-technology rhetoric by saying all of their clients are the same age as they are, that everyone is like them. This allows them to (wrongly) sit in their own bubble and not have to face change.

These leaders don’t realize that every generation is on social media, every generation searches for business online. They will severely slow down efforts to modernize, losing clients in the process because the leader doesn’t cater to them. To summarize, leaders who (for whatever reason), may not understand the ubiquity of technology across all industries. As a marketer, you might need to advocate for the adoption of even the most widespread technologies.

To be successful at digital marketing, your business must have full buy-in from leadeship. It is a digital marketing fundamental and without it, your efforts will fail. Digital marketing takes a unified, agile approach to be successful, something that cannot happen without a connected leadership team, working hard to make things work.

Legacy Systems

One reason that FinServ is behind on adopting digital marketing technologies is that very few of the leaders realize the pressing need to change. Very few (if any) leaders in FinServ rise out of the marketing department. Most leaders do not realize the extent to which their business is falling behind on technology adoption in the marketing department. The average leader in financial services simply struggles to see the value in adopting new technologies that may speed up certain processes.

It’s not that leaders do not wish to stay up-to-date with marketing technologies, but due to expensive legacy systems and ingrained processes, they simply can’t. There are simply too many obstacles blocking the path to change. These obstacles, along with leadership who are somewhat disconnected with the reality of the situation, are the reasons that FinServ providers are falling behind on technology adoption.

Having legacy systems slow you down can be annoying, it can even be quite harmful to your business. It is not breaking any fundamental principles of digital marketing, but can be a symptom of having disconnected leadership. To be successful at digital marketing, you will need to be flexible, you will need to be able to adopt new practices and technologies as they gain popularity. A fundamental aspect of digital marketing is staying on top of current trends. If legacy systems are preventing you from doing that, something must change.

Inadequate Flexibility

Smaller, or independent firms often have a much easier time reacting to technology trends. Their flexibility allows them to control compliance issues in-house, not having to communicate with another department or location. They can motivate change internally. The fact that these firms are less reliant on legacy systems and procedures make them less resistant to change.

Many digital marketing technology solutions do not carry with them a significant up-front cost, especially compared to a decade ago. For this reason, smaller firms are at no disadvantage compared to giant institutions with legacy systems. The larger your organization is, the slower the compliance process can be. There is more material flowing through the compliance department, slowing everything down. The more reliant on legacy systems an organization is, the slower the organization will be to adopt in new technologies. If you cannot stay up to date on the adoption of technologies, it will be very difficult to succeed in digital marketing.

If you have those legacy systems or procedures, don’t worry too much. With proper leadership, willingness to change, and an investment in technology, you can easily become a leader in digital transformation in the FinServ industry. 

Think back to your marketing fundamentals. Communication is a key component, another is delivery of your message where it will be received by the intended audience. Ensure that you are constantly working on getting the basics right, or else, as the digital age progresses, you will lose clients and your practice may dry up. It is important to stay modern, ensure your digital marketing efforts have a basis in strong fundamentals.

How are you preparing for the great transfer of wealth to millennials? Is anything holding you back from adopting technology? What do you think the major reason that FinServ hasn’t adopted these technologies sooner? 

Veriday to Sponsor the 7th Digital Marketing for Financial Services Summit Toronto

We’re happy to announce that we will be sponsoring the 7th Digital Marketing for Financial Services Summit Toronto, June 21-22, 2017 at the Westin Harbour Castle. This is Canada’s largest digital marketing event specifically designed for Financial Service Marketers. Join us at the event to learn the latest in digital marketing tools and tips, and harness the full potential of digital with inspiration from 40+ award winning speakers.

The event provides you the opportunity to connect with senior marketers from across the country to tackle challenges around omni-channel integration, attribution, disruption, automation, content, search and display, social, mobile and customer experience. Set your brand apart in the highly competitive financial services industry. Gain practical strategies, guidance and tactics to:

  • Maximize digital ROI
  • Increase conversion
  • Enhance attribution
  • Improve customer loyalty
  • Drive brand engagement
  • Hardness blockchain’s potential

For a limited time, save 20% with VIP Code: VERD20. Learn more here: https://goo.gl/v0eqbA

Why Your Marketing Technology Isn’t Impacting the Bottom Line

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This post was authored by Christine Reyes originally appeared here on Liferay.com

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What’s the Number One Priority for Marketers Today?

Do you agree or disagree with the following statement? The number one priority for marketers today is to lead the company in finding new revenue and business opportunities.

The majority of business leaders would say they agree, according to a recent survey of CMOs from the CMO Council and Deloitte. Nearly 70% of those surveyed stated that they expect marketing’s primary role to be driving growth. This means that, in addition to attracting new customers and managing the brand story, CMOs are now tasked with opening new markets and optimizing the customer experience in ways that directly help the bottom line.

Given the explosion of MarTech products over the past few years, it’s fair to say that most CMOs see these technology stacks as a key part of their new roles. If CMOs can identify the best technology for their context and use it to constantly optimize customer experiences, they can find opportunities to improve customer service, make marketing processes more efficient, glean new insight from analytics, and ultimately use all of this as a foundation for strategies that contribute to new business growth.

Most CMOs Aren’t Taking Full Advantage of Their MarTech Stack

Unfortunately, when it comes to executing this vision for marketing technology, many companies are left disappointed. Even with the implementation of new products, brands aren’t seeing the impact they expect from MarTech. Other research has shown, for example, that technology is only marginally improving marketing performance at most companies. Even more concerning, as of 2015, only 9% of marketers believe that they are fully utilizing their MarTech stacks.

The insight from the CMO Council’s report suggests that much of this disconnect is due to the CMO’s struggle to translate their new role as business drivers into their daily work. Here is how CMOs say they currently spend their time:

  • Reviewing and approving marketing plans, budgets and campaigns (45%)
  • Defining and shaping the brand (44%)
  • Executing campaigns to attract customers (42%)
  • Evolving the brand narrative (37%)

Based on this list, it seems like CMOs are still focused on being brand ambassadors and managing campaigns, rather than optimizing the customer experience.

Part of the reason could be the normal momentum of their roles. Traditionally, marketing has focused on the promises it makes to customers early on in the sales funnel. This is reflected in the technology investments most CMOs make, such as campaign tracking and reporting software. What they need instead is marketing technology that improves customer experience, produces revenue and optimizes business solutions.

CMOs Need to Start Using MarTech to Impact the Entire Customer Journey

It seems like MarTech has impressive ROI around areas that have traditionally been part of marketing’s role (such as CRO), but isn’t necessarily impacting the bottom line in new ways, like business leaders expect.

With 63% of marketers today using some kind of journey mapping, we know that most CMOs have a customer journey map already created. Connecting marketing technology to different points in the journey can help CMOs identify opportunities for improvement.

One great example of this comes from Deborah Wahl, the CMO at McDonald’s. She staffed her team with 200 tech specialists and used the digital insights they gathered to assess pain points in the customer journey specifically for millennials. They found that millennials disliked that the breakfast menu ended at 10:30am and advised switching to an all-day menu. After the change, 78% of millennials said they visited McDonald’s at least once a month, which is the highest percentage McDonald’s has seen from this group in three years. This is the kind of impact CMOs can have when they use technology to improve performance, especially at moments in the journey that have typically been outside of marketing’s scope.

This change in scope is the difference between customer experience optimization and campaign optimization. While campaign optimization focuses on individual marketing plans in order to bring in new customers, customer experience optimization tracks and evaluates the performance of every single customer interaction. Those who excel at the latter spend their time tracking the performance of each channel, measuring customer satisfaction at each touchpoint, and pulling data from later purchase and post-purchase stages.

Customer experience optimization is what CMOs need to start using their MarTech stacks for, ideally with the help of a smart analytics team that understands how to uncover meaningful, actionable data. This will have a higher impact on the bottom line than campaigns, and it will uncover gaps in the customer journey that CMOs are in the best position to see.

CMOs Have More Influence Than Ever

In the CMO Council’s report, 27% of respondents said that the CMO is the primary chief revenue driver, trumping the CEO at 22%. This means that CMOs now have opportunities to act as trusted members of executive management and influence the decisions that make or break customer experience, provided they find ways to step out of the comfort zone of business-as-usual.

It’s time for CMOs to shift focus away from pre-sale and discovery interactions, where marketing has been traditionally focused. If CMOs want to impact growth and revenue, they need to look at the full customer lifecycle and become experts at using technology to achieve their business goals.

Being Yourself: Why Brand Personification Increases Customer Engagement

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“Over the last twenty years, with the way technology has gone, there has been a lack of connection between brands and their customers. At the same time, social networks have become ubiquitous in everyday life. These social networks have stepped up, and are now the biggest way in which people stay connected. This means that brands need to find ways to connect with people using technology. That’s where personification comes in, it makes it possible to build that connection between a brand and a customer online.” – Marc Lamoureux

Brand personification is one of the biggest trends in digital marketing today. Seemingly every brand, from StubHub and Disney, to boutique B2B operations have been trying to figure out how they can more effectively personify their brand and engagements. To research the subject, I sat down with Veriday’s CEO, Marc Lamoureux, who has been working with companies who are looking to improve customer engagement using personal and scalable solutions.

When we think of a person, what do we think of? Naturally, we think of demographic descriptors to describe that person. Similarly, just as a person will have certain characteristics that define them, so will a brand.  

Why is this important? Because consumers are more likely to identify and stay loyal with brands that closely resemble themselves in terms of personality. So, how can we build our brand to connect our values and goals with those of our customers while having valuable conversations with them? This is where brand personification comes in.

What is Brand Personification?

Brand personification is a projective technique where people think about brands as if they were people, and describe how they would think and feel. Research suggests that personifying a brand and giving the brand distinct human qualities will help people connect better with the company. Similar to human relationships, this more personal connection can lead to a dialogue, and ultimately the formation of a loyal relationship.

When personifying your brand, you should focus on authenticity, painting an accurate picture of what you and your business represent. If you force characteristics on yourself that simply aren’t present in the organization, people will notice. Instead of forcing those characteristics on yourself, leverage your team to help tell stories that accurately reflect your brand and company culture.

Marketingwise, the goal of brand personification is to better connect your brand with values, goals, and customers. 66% of all customers want human interaction in their experiences.  In retail banking, fully engaged customers bring in 37% more annual revenue. It is clear that engaged customers are better customers, so it’s important to get to know our customers, and engage them in a personal way.

Challenges with Brand Personification

Brand personification has its challenges, especially in highly regulated sectors such as finance. As a dealer-broker or a financial advisor, you need to be aware of compliance rules and regulations, including how your brand and messaging fits in with those rules. For example, under FINRA, you must keep a record of all communications. While it is still possible to personify your brand under FINRA, you must be careful to maintain records of every single communication. Marc added:

“One of the perceived challenges of expanding your marketing programs and personifying your brand, through your people, is that it creates a really expensive burden on compliance reviews. In some sectors the burden is larger than in others. Regulators are asking financial service companies to vet every piece of content that is distributed to the public.”

While there are ways to streamline compliance challenges, it is still an inefficiency that needs to be dealt with at some point if you want to get your brand personification efforts off the ground.

The backlash it can cause is another concern regarding brand personification. In a study by Oregon State University, it was found that brands that have been “humanized” will often be held to higher standards than non-humanized brands. The study found that when something went wrong, humanized brands were seen as doing it on purpose.

These issues and concerns need to be taken into consideration when creating a personification strategy. However, If done carefully and effectively, humanizing your brand will increase customer engagement, loyalty, and retention.

How do Customers Respond?

In general, customers respond positively to brand personification. Human-to-human interaction is well received in a world that has become more and more automated and transactional, with technology solutions replacing human interactions.

Humanized branding allows brands to start a conversation with customers. Instead of strict, on-brand propaganda, starting a conversation can put a brand in a more favorable light. A brand that has engaged in personification has the opportunity to be seen as a friend, or at very least a member of the community, as opposed to being viewed as a faceless monolith. Consumers are naturally attracted to humanized brands that they can connect with. You can attract consumers to your business by having similar personalities, values, characteristics or beliefs to them.

In today’s competitive landscape, this extra opportunity to connect and engage with your customers is needed. Social media means that there is constantly a conversation happening online, and you need to be a part of it. If you aren’t there to tell stories about your brand and culture, to many you won’t exist.

Giving your brand human qualities helps you participate in the online conversation. Find your community, the group of people that you wish to do business with, and take part in their conversations. If your brand becomes a reliable and valuable information source for your community, they will grow to trust you.

Building the trust, nurturing the relationship and becoming part of the community can take some time. It is important to remember that social interactions can drive other behaviours. The work involved with developing authentic relationships with the community will pay off down the road.

What Benefits Does Brand Personification Bring?

Your business can see many tangible benefits by personifying your brand, as long as you do it authentically. Here are some ways in which personification can benefit your brand:

  1. Associates real people with your business.
    • Consumers prefer interactions where a real person is on the other end of the conversation.
  2. Differentiates yourself from the competition.

    • People tend to have positive associations with brands that were consistent with their own identity.
    • Your niche is more likely to do business with you if your brand has similar convictions as them.
  3. Aggregate strengths of real people to your brand.
    • Use the skills and personalities of your team to create a well-rounded brand persona.
    • Your brand can have all the skills and traits of your team.

Personifying Your Brand In Financial Services

In financial services, customers don’t want a 100% transactional relationship. There was a time when everybody knew the names of their bankers at their local bank. Today, this type of relationship with our customers is far less common. As technologies such as ATMs, telephone, online and mobile banking has become ubiquitous, relationships with customers have become less personal, less valuable, and less engaging than they once were. Technology has been putting the industry at risk of becoming too transactional, with a lack of humanization. Due to the sensitive and complex nature of the relationship, customers need to be able to trust their FinServ provider.

The only way to build relationships with customers (and potential customers) is by engaging with them in personal, relevant, and valuable ways. Connect to customers using your people and give your business a personality.

The only major difference in implementing brand personification techniques for financial services is the compliance aspect of it, which can be overcome using specific solutions in the marketplace.

Marc had a great anecdote to summarize brand personification when he said:

“Would you be more likely to engage with Facebook.com (the website) or engage with your friends on Facebook? We view brand personification as invoking the same strategy. A customer is more likely to engage with their friends or real people than a brand that they don’t know.”

The whole idea of personifying (or humanizing) your brand, is to gain that connection that used to be very common in all types of commerce. Back when the social relationship between two parties drove loyalty. Personifying your brand is a strategy for you to be seen as “the friendly neighbourhood RIA” or “the insurance broker down the street”.

What efforts have you gone through to personify your brand? Were those efforts worth it? Let us know on Twitter @VeridayHQ. What topics do you want to learn more about? Let us know and we will take your suggestions into account.