Financial firms should grasp opportunity to boost marketing

Monday, 07 June 2010 13:42

Editorial - External sources

New research from customer insight and database marketing specialist KDB reveals that, as the UK emerges from recession, most financial firms need to raise their marketing and communications game to take advantage of opportunities – particularly in the investment sector, which the survey shows remains strong despite continued economic turbulence.

The results of KDB’s survey of 1,000 consumers across the UK suggest that the marketplace is ripe for firms marketing investment products and services, with 71% of respondents saying they invest either directly themselves or through a financial advisor. The research also revealed that 65% of those respondents who said they invest also said they were increasing the amount they invest this year.

The survey, which was balanced by gender, region, social class and age, found that the older the person, the more likely they are to be investing. The 55+ group – those most likely to be considering their pensions as they near retirement age – led the way in terms of making their savings work for them, with 84% declaring that they were actively investing. But even more than half of the respondents in the 18 to 24 age bracket said they were investors.

The survey also indicated, however, that financial firms are doing an insufficient job of marketing their products and services to prospective and existing customers, as 70% of all respondents found that the majority of direct mail they received from these companies is irrelevant to them while only 13% said that a substantial proportion of the post they receive from these companies is of interest to them.

A breakdown of the findings indicated, however, that financial firms were doing better in certain markets, particularly London where 19% of respondents said they found that a significant portion of this type of direct mail was of interest to them and only 64% found the majority of this post to be irrelevant.

What financial firms selling investment products and services should find particularly worrying though is that the demographic groups with the greatest earning power and likelihood to invest – those age 45 and up – appear to be the consumers these firms are doing the poorest job of reaching with their marketing. The survey found that 77% of these consumers said the majority of the direct mail they receive from these companies is irrelevant. Only 9% of 45 to 55-year-olds and 11% of the 55+ age group found that a significant portion of the print communications sent to them from financial firms was of interest.

Summary of main survey results

The survey also showed that men are slightly more likely to be investors with 72% saying they put money into some kind of investment vehicle versus 69% of women. Regionally, the North East offered firms the fewest opportunities for targeting investors with only 55% of the respondents in this region saying they are investors. The South West, on the other hand, appears to be a hotbed of investment with 82% of those surveyed there saying they invest.

Matt Boot, chief analyst at KDB, said: “At a time when marketing and communications could be vitally important for firms focusing on investment products and services, the findings do not bode well for the mass of players in this area – but it also means that there can be huge opportunities for those that get their messaging and their approach to the marketplace right.

“The results clearly show that, at its heart, the UK is a nation of investors and that people are investing even more as confidence in the economy grows.

“But we can also see from the research that, in general, financial firms are falling down when it comes to understanding who their prospective and existing customers are and what information these people want to receive. Overall, companies in this sector need to become more savvy in their marketing, using client data and other information to target and tailor communications far more effectively than they have thus far.

“As the economy continues to recover and consumers look at how to place their savings and investments, most financial firms need to do a better job of contacting these people about what products and services they provide and how these can benefit investors. Knowing the marketplace and getting the communications right is essential for firms that hope to take advantage of the opportunities already out there and seek to position themselves to gain market share and higher profits as the economy strengthens.”

For further information please contact Naomi Bloomer at naomib@lindsellmarketing.com or call her at 020 7402 0510.

About KDB
KDB is a data and database marketing consultancy whose services include analysis for campaigns, insight into customer patterns and behaviour, database hosting, and campaign management. KDB is retained by household name organisations in the retail, financial services, travel and utilities sectors. http://www.kdbltd.co.uk/