Debunking Four Common Myths for Financial Services Marketers
In the ever-evolving world of financial services marketing, several misconceptions have taken root. Today, we aim to debunk four of the most common myths (as outlined by Gartner) that often misguide strategy and decision-making.
Myth #1: Personalization is Too Demanding
Personalization is touted as the holy grail for marketers. In fact, research fielded earlier this year in conjunction with Marketing Dive, told us that 99% of marketers are planning to tailor their marketing strategy through hyper-personalization over the next 12 months to 5 years.
So, marketers want to do it…
But personalization is also often perceived as requiring massive upfront investment and being somewhat unachievable. Why? Because acquiring and properly using customer data can be a huge logistical and strategic hurdle.
It’s not enough to just collect personal data. It needs to be complete, accurate, and accessible so it can be used in ways that can actually inform and drive sophisticated journeys. For most financial services organizations, that’s no easy feat. Data is stuck in siloed sources for each line of business and a highly regulated consumer privacy landscape means even if that data can be accessed, there are limits on how it can be used.
Exacerbating this data challenge is the fact that customers have mixed feelings about personalization. 55% of consumers said they would stop doing business with a brand if their communications were perceived as invasive or “creepy” and 59% would go as far as to actually block the brand. In an industry characterized by little product and brand differentiation, too little personalization isn’t enough and too much can have an immensely negative impact. Talk about a tight rope!
So, is they myth justified? It’s true that getting personalization right isn’t easy. But if you right size your approach to use customer data in ways that unlock additional business value, it can be a key competitive differentiator. Financial services organizations should consider using personalization to provide customized intervention during self-guided buying journeys or use game thinking to create intrinsic motivation on self-guided journeys to expertise.
Myth #2: The Best Experience is a Frictionless One
The prevailing belief amongst marketers is that an optimal customer experience is a seamless one.
However, customers actually value two types of learning experiences: 1) New information related to purchase decisions; and 2) Realizing something new about their own needs or goals.
The second type of learning – one that causes the consumer to pause and think – often involves some degree of friction, yet it has been shown to have a 1.73x increase in the likelihood of buying. Surely not every experience or piece of content can be about reflection though, right?! That’s true. The trick is to introduce the right friction at the right time.
For example, offering a quiz where customers repeatedly choose between two attractive goals with a time limit. The quiz includes friction, but the pay-off for the consumer is a personalized recommendation based on their individual priorities and initiatives.
So, is the myth justified? The answer is sort of. While consumers do want most experiences to be easy, adding situational friction that prompts customer reflection at the right time can actually improve the overall experience.
Myth #3: Digital Channels are Commodities
There is a common certainty amongst marketers in financial services that digital channels and content do not provide any competitive advantage.
According to recent research from Gartner, 60% of marketing leaders expect their digital strategy to only have low to moderate impact on business outcomes. Yet, 90% are prioritizing digital experiences initiatives and investments.
Hmm…something doesn’t add up. Marketers feel like they must invest to keep up, yet they’re expecting little to no return on investment.
However, the rising influence of Gen Z on purchasing behavior cannot be understated, as this digitally-native generation is reshaping market dynamics with their unique values, preferences, and heightened expectations for digital experiences. In fact, 77% of younger consumers agree that the quality of digital financial tools is a significant factor in determining which provider to choose.
Customers are more likely to engage and buy from us if we can provide an experience that helps them feel more in control, capable, and confident to make decisions themselves. Simply put, they don’t care that they choose you. They want to choose well for themselves. The more you can help them do this, the better.
So, are digital channels commodities? Not so much. Digital channels can in fact provide powerful differentiation opportunities if designed to offer practical, non-brand centric help that empowers customers to make decisions.
Myth #4: Generative AI is the Future
Generative AI (Gen AI) is being lauded as the future of marketing, with top experts encouraging businesses to place all their marketing bets on it.
Look at Adobe, for instance. They’ve been making major investments in Gen AI for more than a decade. They believe when “done right, Gen AI can amplify creativity and intelligence without replacing the beauty and power of the human imagination.”
Here at LeapPoint we agree.
However, given the rapid pace at which Gen AI is evolving, we recommend moving forward with proven use cases and being calculating with the risks you’re willing to take. Some of the use cases we see as ideal starting points are integrating tools like Adobe Workfront and OpenAI to streamline content creation, image generation, video transcription, and more.
Gen AI certainly holds promise, but marketers don’t need to rush the pace.
So, Myth or Bust?
In conclusion, these myths, when addressed properly, can pave the way for more effective strategies and improved outcomes. The key is to keep the customer at the center of it all, focusing on their needs, their experiences, and their perspectives. This customer-centric approach is what truly drives success in financial services marketing.
Interested in exploring one of these topics further? Let’s chat!