Financial Services Marketing Strategies

Marketing Financial Services - Topic 7: Advertising and Communication

• Financial services faced two initial challenges: customers struggled to differentiate between services, and many services were unfamiliar.

• Advertising's role is crucial in overcoming these issues by building brand awareness and promoting financial services.

• Advertising strategies evolved through three stages:

  • Initial Stage: Focused on the bank's name, strength, and security.
  • Second Stage: Highlighted new services, aiming for differentiation through exclusive features.
  • Current Stage: Emphasizes humanizing the firm, addressing intangible service aspects and the similarity of offerings.

• The primary mission of advertising is two-fold:

  • Inform and persuade customers about the value of services.
  • Alert potential users to services that address their needs.

• Advertising and communication in financial services utilize various channels:

  • Above-the-line: Mass communication channels (e.g., TV, radio, newspapers, posters, magazines, cinema).
  • Below-the-line: Targeted, direct marketing channels (e.g., leaflets, direct mail).

• Types of advertising in financial services are categorized based on objectives:

  • Institutional advertising builds long-term brand recognition for companies (e.g., banks).
  • Brand advertising focuses on building brand recognition and awareness for specific products (e.g., insurance).
  • Classified advertising provides information about special offers, services, or events.

• Institutional advertising aims to promote the overall image of the firm, as well as specific products. It emphasizes the image of the firm through its various products.

• Brand advertising aims to communicate the benefits associated with particular financial products to create positive brand awareness for particular products.

• Advertising strategies must consider organizational objectives and customer needs.

  • Organizational objectives include revenue targets, brand awareness, and market positioning.
  • Customer needs include preferences, pain points, and behavioral patterns, all identified through market research.

• Considerations in choosing advertising are:

  • Budget: Costs must align with organizational benefits and support action within budget constraints.
  • Target audience: Effective identification (e.g., women) to ensure resonance with motivations and characteristics.
  • Message: Tailoring content for desired responses and appropriately highlighting benefits.

• Key channels for advertising include:

  • Magazines: In-depth articles and advertisements.
  • Posters: Visual advertisements in public spaces.
  • Newspapers: News and advertisements.
  • Television: Broadcasts visual content to a wide audience.
  • Radio: Reaches listeners through sound waves.

• Television advertising combines sound, picture, color, and movement, stimulating quicker responses and raising awareness, although high cost and short message lengths are limitations.

• Radio and cinema are less selective but effective in localized areas.

• Posters offer repeated messages to the same audience with a focus on reinforcement, but limited by visual appeal and environmental dependence.

• Newspapers include targeted advertising efforts and eye-catching design to enhance effectiveness.

• Below-the-line ads include leaflets, pamphlets, etc., that are cost-effective and easy to produce, but less effective at attracting new customers. They depend on personal selling for effectiveness.

• Sales promotions aim at overcoming buyer inertia, but overuse can create doubts about service reliability or pricing. Effectiveness relies on appropriate use alongside advertising, ensuring relevance, usefulness, and cost-effectiveness.

• The objectives of promotions aim to:

  • Attract new customers.
  • Increase deposit and savings market share.
  • Reduce customer acquisition costs and avoid price competition.
  • Increase market share in specific segments.

• Effective promotion in financial services involves various steps, such as attracting new prospects and enhancing customer loyalty.

• Personal selling involves direct engagement with potential customers to create trust, build relationships, and satisfy customer needs. It requires training personnel on services, customer needs, selling techniques, and upholding company image.

• Maintaining relationships with existing customers is also important. Personalized service improves their satisfaction and builds long-term relationships.

• Publicity is a less controllable element of the promotion mix; media determine its content. Its objectives are to secure editorial space and enhance public relations—assisting in achieving sales goals. It is also cost-effective, credible, and memorable.

• Sponsorship in financial services can build brand awareness and corporate image, but its effectiveness is limited and requires marketing of the event to gain attention.

• Advertising and communication in financial services significantly affect brand awareness, visibility, and establishment of brand identity through consistent messaging. Skilled personnel, tailored messaging, and engaging content attract potential customers.