Just before everything shut down in the face of the pandeminc, a group of financial marketers convened in Boston for a meeting of the Gramercy Institute. The session was billed as focusing on the topic of ”What’s New and What’s Next in Financial Marketing“ and indeed much of the content touched on the future, but, taking a cue from the news at the time, the host initiated a discussion of marketing in a crisis.
Broadly, the conversation fell into two buckets: communication “best practices” and the role of marketing. Two key take-aways:
Communication “best practices.” There was agreement that transparency and authenticity were key to building connections with customers, but also that there was no clear playbook for communication frequency and channel. Discussion participants recognized the need to respect the limited time and frayed nerves of customers but also saw potential value in providing clear guidance in an environment filled with uncertainty. Likewise, they recognized the need to find a balance between communication overload – exacerbated by the worldwide turn to digital communications in light of severe restrictions on face-to-face contact – and the value of demonstrating presence and building community when so much of the current crisis feels (and is) isolating. Finally, participants expressed mixed feelings about finding opportunities in the crisis. Many said that this was definitely not the right time to be promoting products. Some made the argument that people are looking for concrete assistance and that there was a place for tasteful promotion of solutions that could meet the needs of customers in the current environment.
Role of marketing. As the discussion
turned to the role of marketing amidst the crisis, there was widespread
consensus that in some ways the environment was one in which marketing could
really prove its value in building relationships with customers and prospects
and in delivering timely, conscientious, clear communications. Even more,
though, there was agreement that marketers at B2B financial services companies
should seize on this as a chance to forge a closer partnership with their sales
colleagues, who are likely to be struggling to adjust to a world in which
face-to-face contact is minimized or even completely foregone. Everyone agreed
that if Marketing could find a way to enable sales to leverage digital and
voice channels to nurture relationships at a distance and at scale, it would
have a significant impact on the ability of the company to navigate these
While the event was likely the last in-person meeting for the near future for most in attendance, it was a valuable opportunity to share ideas with colleagues and learn from each other as chaos seemed to be descending. It has given us much to think about as we all now hunker down, socially isolate to try to stay safe, and think about what the future might hold in store.
“Making convenience secure”
“Protect your applications”
“Protect and grow your business confidently”
“Prevents the threat of breaches”
Anyone walking the aisles at the recent FinTech Connect conference in London reading the taglines displayed in the booths would have gotten a clear sense of the overwhelming significance of security in the FinTech space. Not that it should come as a surprise given the constant threat of crippling breaches and compromised data.
What is interesting about the threat and the proclamations of powerful counter-measures is that while the threat hangs like a cloud over the industry, the potency of security efforts effectively require a leap of faith. Just because an application hasn’t been compromised doesn’t mean it can’t be. And when the risk calculation includes the potential damage from a reported breach, even the smallest possibility looms large.
Moreover, the proof of an application’s security lies in the absence of problems. From a marketing perspective, that is a proposition that is very difficult to communicate: part of the customer value you’re delivering is a lack-of-disasters. And a lack-of-disasters is only a differentiating attribute if your competitors have all experienced breaches. In fact, then, data security is table stakes—vital, but not the thing on which you want to hang your positioning hat.
So if data security is important, but is impossible to prove or leverage as a differentiator…
Is there still a way to claim some ownership of it as an attribute?
Can you create value around an attribute for which nothing happening is a positive outcome?
The answer to both questions is “yes, through content marketing.” Developing and distributing a consistent, relevant, and valuable stream of data security content for prospects and customers is a proven, powerful way to instill confidence and build stickiness. Demonstrating data security expertise through content marketing does infinitely more than a promissory tagline to establish a position of trustability in customers’ minds and reinforce perceived value.
When done well, content marketing can create loyalty even in the face of low switching costs because customers and prospects become hooked on the valuable material delivered and come to recognize you as a knowledgeable and indispensable partner. Moreover, while it’s easy for a competitor to copy tagline promises of data security, it’s much more difficult to duplicate an effective content marketing engine.
A J.D. Power study showed that Millennials who use self-directed platforms without much human interaction are more than 200% more likely to switch advisors than those who feel they have good communication with their advisor.
The image created by these items depicts the struggles in the advisory business to settle on a clear, promising strategy for integrating advice channels.
The Limits of Disruption
When robos appeared on the scene several years ago, they were heralded as the future of wealth management, a democratizing blow for the industry, and a mortal assault on traditional financial advice. Any who have seen the hype machine movie before won’t be surprised that none of those things turned out to be true. In the real world, the biggest “robos” in terms of assets are those of Vanguard and Schwab that operate as hybrids while the “pure play” B2C robos have struggled to accumulate assets and breakeven on customer acquisition costs.
The reason for this discrepancy between reality and hype is simple: Irrational as it may sometimes be, most people want humans involved in their financial planning. A 2016 survey conducted by EMI and Boston Research Technologies showed not only that most want human involvement, but also that those who were more open to algorithm-driven investing didn’t neatly map to pre-conceived demographic categories. The bottom line is that you can’t will customers and prospects into following your vision for a service offering. Moreover, making assumptions about their behavior based on intuition and truism doesn’t create a strong foundation for success.
The truth is that the majority of customers want a hybrid model. Many of the leading wealth managers understand this and have implemented or will implement various forms of hybrid offerings. In fact, as I mentioned earlier, the largest robos are actually those launched by existing wealth managers Vanguard and Schwab.
But any business heading down the hybrid path needs to recognize that their old models of and assumptions about client management and messaging will likely need to change. Specifically:
If portfolio management is outsourced to machines, it becomes a commodity and value must be defined in terms of relationships and communication—an idea that has been around for some time but which has not gained universal acceptance because it is hard to execute.
If you are advocating for clients to use your automated platform, you need to recognize that you are now responsible for their adoption of and satisfaction with the investment management software. Firms and their advisors need to be ready to assist clients onboard, answer their questions, and help them realize the full value of the software.
Pushing the wrong clients towards a robo solution is a lose-lose situation that will cost time and assets. Firms and their advisors need to have ways of identifying where clients are likely to fall on the spectrum of interest in and comfort with automated portfolio management, recognizing that age and net worth will likely not be great proxies.