Customers are individual � we don't need to be told that. What works for the poor probably won't work for the rich. Now, a new report confirms not only this, but that many financial services firms are ignoring the fact and, as a result, getting their marketing to their affluent clients wrong.
It must be very tempting for financial firms, in this rather gloomy economic climate, to shape their marketing campaigns towards clients who are worried about surviving the downturn. What they mustn't forget is that many of their best customers are wealthy enough not to worry too much about the clouds on the horizon. The new Technographics(R) Report from Forrester Research, Inc. supports this view: they may be missing the mark with their most affluent customers - those with investable assets of at least $1 million.
Forrester recently surveyed 2,500 North American affluent households on the state of the economy, the market, and technology, and found them to be confident about the economy and the market, secure in their wealth, and optimistic about technology. As a result, Forrester recommends two approaches above all to help firms gain market share: breeding loyalty and promoting a cohesive, relevant brand experience.
"The bottom line is that retaining customers costs less than acquisition, and loyal customers buy more frequently and spend more," said Ekaterina O. Walsh, Ph.D., senior analyst at Forrester. "Moreover, loyal customers are a firm's best acquisition vehicle. One of the top three ways affluent investors learned about their most recently chosen financial provider was through some sort of referral."
Companies need to understand their customers in order to keep their loyalty. What makes this even more difficult is that each individual interaction with the company is combined by the customer to form one overall impression. So, while each interaction counts in its own right, and must meet the customer's expectations for that interaction, the sum of the impressions formed is even more important. The impressions - therefore the messages - must be uniformly good.
Focus on benefits:
With this in mind, and to better understand what the affluent expect, Forrester focused on four interlocking areas in which these consumers interact with financial institutions: advice, branches, websites, and customer service.
Advice: Timely, relevant, and customized advice, which includes everything from picking stocks to tax planning, plays a key role in retention. The affluent also expect this advice to be offered via multiple channels, with 84% of millionaires expecting online and off-line advice to complement each other.
Branch visits: Not surprisingly, what the affluent value most in branch visits are quality service and privacy. These lead to loyalty: clients who report that their firm offers a private setting are more likely to recommend that firm and less likely to move to another company, not even for lower fees and cheaper credit.
Online needs: Almost twice as many affluent consumers visit financial providers' websites as their non-affluent peers. What they want from the websites is accessible information and self-service.
Customer Service: And of course customer service is the fourth component to a firm's total experience.
Budgets are tight, and every cost-effective way of raising levels of customer service without it costing too much should be considered. For example, financial firms should offer cross-channel service and rapid responses to client email.
"Affluent clients whose primary financial providers successfully integrate two or more desired services are 25% more likely to recommend the firm and 24% less likely to leave," added Walsh. "And since the affluent are seven times more likely to list credit referrals than ads as the way they heard about their current provider, firms can't ignore the power of loyalty."
For the Report Winning The Affluent In A Downturn Forrester surveyed 2,505 US and Canadian members of NFO's and Canadian Facts' panel of households with investable assets of $1 million or more.