FSI customer relationships suffer from irrelevance
As the UK emerges from recession, most financial service providers will need to improve their marketing and communication strategies to take advantage of opportunities in the investment sector, which remain strong despite continued economic turbulence, according to a survey by database marketing specialist Knaulage DB (KDB).
The survey found that the marketplace is ripe for firms that are marketing investment products and services, with 71% of consumers saying they invest either directly themselves or through a financial advisor. Some 65% of those who said they invest also said they were increasing the amount they invest during the coming 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+ age 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% saying they were actively investing. And more than half of the 18-24 age group said they were investors.
However, financial firms are generally doing a poor job of marketing their products and services to prospective and existing customers, as 70% of consumers said 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 direct mail they receive from such companies is of interest.
A breakdown of the findings indicated, however, that financial firms were doing better in certain markets - particularly in 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 mail to be irrelevant.
But the demographic groups with the greatest earning power and likelihood to invest - those aged 45 and up - appear to be the very groups that these firms are doing the worst job of reaching with their marketing messages. In fact, the survey found that 77% of these consumers said the majority of the direct mail they receive from financial companies is irrelevant to them. Only 9% of 45 to 55-year-olds and 11% of the 55+ age group felt that a significant portion of the printed communications sent to them from financial firms was of interest.
According to Matt Boot, chief analyst for KDB, "At a time when marketing and communications are vitally important for firms focusing on investment products and services, these findings do not bode well for most companies in this arena, but it also means that there are huge opportunities for those that get their messaging and their approach to customers right."