Your online marketing and website don’t work…

There’s generally a very poor understanding of the dynamics of the role of the website in retail financial services interactions today. There is an acceptance that ‘some’ customers use the web, when deciding on a new financial services relationship, but not of the critical nature of the web in that choice. Let me explain how things are different from a behavioral perspective.

The inertia assumptions

Historically the majority of acquisition in the financial services space was either from brand marketing and/or campaign activity that drove a potential customer to purchase or apply for a Retail FS product/service.  There is an assumption that the web, social media, mobile and other e-channels support that goal as marketing channels where we can extend the brand and campaign paradigm. That is, we can broadcast more messages, perhaps with a tighter demographic or psychographic focus, to an audience that is more diverse in their message consumption.

The problem is that the Internet has been responsible for a significant process shift in buying behavior, namely that the dynamics of buyer response has significantly flattened. In the past marketing stimuli was used to create first awareness, then interest that led to the buyer mentally listing your ‘brand’ on a sort of short-list of providers, and then finally based on further marketing stimuli (promotion, pricing, location, features) the consumer engages with your brand for your product or service. This approach to marketing is all based on the premise that consumer behavior is latent or responds to a marketing message over a defined period of time.

Now with digital interactions being what they are, a consumer can go straight from research to purchase or need to application instantly. So the ‘stimuli’ works differently today, it needs to be a ‘live’ interaction strategy, not a message strategy that waits for a latent response. The loser in this context is the traditional marketing campaign mechanism, because a campaign is a latent stimuli tool, not an interaction tool.

The new engagement model

So in this new world, buying behavior is very different. Assume a customer needs a retail financial services product like a mortgage, a new bank account, a credit card or a personal loan – what does he or she do?

The overwhelming behavior today is to think about how they will apply for that product or service, with the least fuss. They will probably be largely ambivalent to their choice of financial services provider, in that, the fact that they have a bank account with you does not automatically mean they’ll come to you for another product necessarily. What the majority of customers will do is start by looking at their options – and for that they use Google (or perhaps YouTube) as their starting point.

This research phase is critical, because it is the empowerment of the customer. Them matching your product to their needs set. What’s critical in this stage is not the features of the product generally, but the utility of the product. Take a mortgage – how quickly can they buy their house, how much do they need to pay each month and how quickly will they own their  home? They don’t start by asking what are the early pay out fees, what’s the rate, and can they change their payment terms or habits midstream.

The concept that this research needs to happen at ‘your bank’ is a holdover from our traditional branch approach to FI product sales. In fact, we build our Internet banking sites just like a branch – assuming that you’ll come, ask some questions and then apply for a product. Most of the time, we won’t let you apply for a product seamlessly through our Internet branch, and we’re aiming to push you to a ‘real’ branch. This is inertia talking and it is counter-intuitive based on behavior today.

The easiest thing to do is simply shift me straight from research to a buying action once I have you online, but the more complex that is, the more chance that I’ll simply leave your Internet branch and go looking online for a faster path to the solution. What won’t happen is that I’ll suddenly be inspired to walk into your branch and start talking to a person after reading your website.

What the new web looks like

The new web we need to build right now is a set of tools to empower customers and help them complete the buying task they are looking for as seamlessly and as frictionlessly as possible. In that environment, the rolling promotions and offers we see dominating many retail FI websites today will be largely gone, relegated to simple landing pages connected to those dying campaigns.

The new website will be rich in imagery and process workflow for the engagement process, heavily personalized around what I already know about you, either through cookies, login or something like your facebook connected profile.

Additionally, the new website will be built from the ground up to be browser agnostic. It will work on a tablet, on a mobile phone, on a laptop with a whole range of resolutions and screen sizes – seamlessly. You won’t build buttons that require a mouse click, you can use your finger. You won’t populate with lots of text or links, when big images or stories will accomplish the same stimuli to an engagement.

Apple's website works as well on Tablet and Mobile, as it does online

Coming out of all of this will be a fundamental shift in marketing budgets and team structures. In just 3 years, 30% of your website visitors will be using a non-PC screen. Social media will represent 25% of your marketing budget driving brand advocacy and participation, and 50% will be on engagement and journeys, and the rest on a supporting framework of traditional media to build broader brand awareness.

Comments

  1. Ron Shevlin says:

    While I don’t necessarily disagree with the overall conclusion that FIs’ online marketing and sites aren’t working (well, not working as effectively as they can be), I do take issue with how you got there.

    First off, I really don’t think consumers in the market for a financial product start by asking themselves which channel will be the most convenient channel to apply in.

    It varies by product, but many consumers go into the process not even thinking about the application process — they’re first thinking about selecting a provider (if they don’t already have one).

    And to try to boil down this “research” process down to one predominant behavior, like “using Google” is oversimplifying things.

    Rather than try to argue how consumers use the online channel to make financial product decisions regarding providers and application channels, let me offer my rationale for why your bottom line conclusion (regarding the ineffectiveness of online marketing) is correct:

    FIs’ predominant approach to online marketing is rooted in “old” marketing thinking. Namely, the belief that the job of marketing is to persuade someone that they need the marketer’s product, and that they need that product from the marketer, and no one else. Another word for this is “persuasion.”

    The term “engagement banking” gets tossed around a lot in our circles, but quite frankly, I still haven’t heard a really good definition for this.

    Maybe it’s like porn — maybe you know it when you see it.

    So maybe the opposite of “persuasion” is “engagement.” And in this context, online marketing, when following the engagement model, isn’t about persuading prospects, but about helping them make a smart decision about their product needs: 1) Whether they need that product right now or not, and 2) Whether the marketer at hand is the right provider for them or not.

    The adoption rates of mobile devices, and the split between the “larger” screen and “smaller” screen is simply not relevant until the underlying philosophy driving the ineffectiveness of FI’s online marketing changes.

  2. Stacy Litke says:

    I’m with Brett. So many web sites, from all lines of business, not just banks, use their web sites as stagnant marketing where they simply try and “persuade” me that there company is the one to choose and then the action steps are up to me (pick up the phone, stop by a brick and mortar, etc.).

    What I want is a business to “engage” me. Take it to the next level, help me seal the deal while I’m here and focused on the task at hand. Provide me a simple way to complete the transaction I am seeking. If you make it easy for me, I’ll be back. If not, I’ll go somewhere else.

    And yes, for me that starts by typing in what I’m looking for in a google search.

  3. brettking says:

    Ron,

    I will cop your call that saying they start with Google/YouTube is an oversimplification. My bad.

    But I like your thinking around the shift from persuasion to engagement. I think what we’re really seeing is the instant gratification age, where I can reduce my workload as a marketer by simply allowing you to engage as quickly and as easily as possible when you have the intent to buy – that is the engagement or the journey.

    Right now after you’ve demonstrated the intent I make it far too complex (at least in financial services) to engage. Thus, I’m doing more work than I really need to trying to continually persuade you when all I really need to do is make it really, really simple to fulfill.

    I will say that my argument about stimuli versus engagement is really the core here. My attachment to the ‘engagement’ will increasingly become event, location or contextually based. As such, I need to engage you when and where you need the utility of a bank, not stimulate you to buy a product you might need some day.

    Brett King
    Bank 2.0

  4. brettking says:

    Stacy,

    Can I ask, do you feel your behavior is special or representative of your contemporaries?

    BK

  5. Jim Marous says:

    While the majority of financial institution in the states don’t do this, I think there is a way to connect engagement with persuasion. I think both Progressive and Geico Insurance do this perfectly by beginning with a shopping service where you can compare rates. The ‘selling’ process doesn’t feel like it begins until the comparison process ends even though they are able to collect a great deal of insight from me during the process. This shared value exchange gets me engaged early and by the time the shopping process is over, I actually ‘want’ the sale to take place since I have too much time invested.

    USAA also provides a number of their services from a convenience (engagement) perspective before the selling begins. Their auto loan iPhone app provides me insight into the value of the car and how much can be loaned way before they try to convince me to get the loan from them.

    Is it any wonder that these firms are so successful and their new customer process is so seamless?

    Banks need to provide value before asking potential customers for their business. I agree with all of the above who say that banks have a long ways to go and that the buying process is made more difficult by ‘marketing’ too soon.

  6. Rob Findlay says:

    There is something coming to mind here about the adjacency of standard banking products next to the marketing and channel experiences you describe.

    Whilst the way we search for and choose products is changing from ‘persuasion’ to ‘engagement’, it’s the products themselves that still seem to pigeon hole the way we interact with them not just the reasons why we choose them. Features allow for the customer to buy certain things of value, like redraw on a mortgage, or reward points on a credit card, and these need pre and post sales interaction to take advantage of.

    I wonder if the future of products is far more fluid, where instead there being either a range of products you can choose from, or a deck of products you can combine into a bundle, more that my distinct profile creates a simple ‘pool’ of products (or just money) that I dip into, and out comes what’s right for me.

    The commodisation of products that we talk about so much is now so discarded as a discussion topic that I fear innovation in this space may be left to regulators alone to oversee.

    Do product perameters (not) always determine usage permaters?

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