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Annalaise GibbonsMoney is an issue on everyone’s mind, with financial institutions continuing to dominate the front pages and fighting an undercurrent of public mistrust. 

We spoke to Annalaise Gibbons, from the e-marketing team at LV= (formerly Liverpool Victoria) to find out about the challenges in the financial services industry and the role of digital.

How has the recession affected the marketing budgets of financial institutions?

Without a doubt, budgets have become much leaner. For a financial organisation whose primary aim is to drive inventory, the focus has moved away from big-scale above-the-line marketing to more focused, proven, response-driven communications. All bets are now on the measurable, low acquisition marketing channels (particularly online) to deliver business goals and bottom line sustainability.

What are the biggest challenges and hurdles facing the online sector within an increasingly competitive financial services marketplace? 

The marketplace is becoming more crowded as increasing numbers of providers move into the online space, but I don’t see that as a bad thing. In fact, it drives the channel forward by stepping up the pace. As financial services start to fully focus on e-distribution, innovative refinement of websites begins, more effective creatives are developed and new channels are not only being willingly tested but sought and sometimes even created by providers. 

The biggest challenge for any financial services organisation is to keep up with the pack to ensure a unique and commercially successful online offering. Many older establishments that weren’t set up during the dot.com boom simply don’t have the lean infrastructure in place to react to change or infuse new technology with old systems. These are huge hurdles for the more established providers to jump over, and only massive investment into IT and e-commerce capability will counteract it.

You need capital and a positive attitude from all key stakeholders within the business, which is something most e-commerce teams are still fighting to obtain.  

What methods and channels do you find most effective in terms of driving a decent return on investment (ROI)? 

We try to run all of our media campaigns on a cost per acquisition (CPA) basis (as a set commission or as a target to achieve). If that CPA is met, we are guaranteed a profitable ROI, but this does mean we have very strict budgets to work with, and that’s why financial services is one of the toughest environments for marketers and media owners.

Everything is accountable, particularly at the moment, but we try to operate in every channel possible and anticipate where the customer is going to start looking next. An open outlook is the most effective tool for driving ROI. 

Do you find that offline activity compliments your online activity and do you have a fixed strategy to ensure that the two always run in synch? 

At LV= we try to synergise all marketing campaigns by ensuring we have creative ‘matching luggage’ and brand consistency, plus regular meetings with our counterparts on the offline team to share insight and make predictions based on the marketplace and trade climate. 

However, it hasn’t always been easy, and such interaction does not come without its problems. A company’s organisational structure has a huge impact, and can be counterproductive if online and offline teams are running from the same marketing budget, when both have vastly different objectives and CPA targets. Subscribing to an open working relationship with your counterparts is paramount. 

The financial sector has a reputation for being notoriously slow to accept new ideas and methods. To what extent would you agree with this? Are you finding that there’s still an internal lack of understanding about the possibilities and opportunities digital media can provide? 

The financial sector, particularly established institutions that grow incrementally rather than in freewheeling opportunism, are slow to change by nature. This is purely a result of the timescales of existing processes and mindsets. As we move into the digital era, however, even the most archaic of institutions is unable to deny the huge importance of e-commerce, and how distribution needs to move into this next phase.

Most financial organisations now have some form of online team to manage their e-offering, and this is a huge step forward from five years ago, when everyone had the basic website framework in place but provided no real customer value, and there was an air of uncertainty as to how to get customers there in the first place. 

Today, we still find getting buy-in for new online ventures a challenge, but if nothing else it educates stakeholders and raises the profile of the e-commerce team within our organisation. We treat each new business case with the same optimism and attention to detail, and hope this approach will organically change internal understanding of our cause.  

One of the buzz-words at the moment is Twitter and more broadly speaking, social media. The financial industry in the UK is often criticised for not being involved in these areas. Do you think this is fair and what plans are there, if any, to engage in the online social sphere? 

It’s easy for those who have found success with social media to glance back to the start line and wonder why everyone hasn’t caught up yet. For the financial industry, who have some of the most measured and accountable marketing budgets, social media is like a corridor with many doors. It’s perilous to storm blindly into one of those unknown rooms and expect high levels of engagement, particularly as we know consumer confidence and trust in financial services at the moment is at an all-time low.

Some brands, particular car insurers, have taken baby steps into testing this channel, but unless you have an entertaining brand personality such as Compare The Market’s Aleksandr Meerkat, it is very difficult finding an open way to interact with our customers without making them feel like we are just in it for their buck.  

Consumers buy financial products as a necessity. They don’t respond as warmly to our products as they do to coveted FMCG brands, particularly from personal data-driven targeting on social sites.

As an industry I think we are just being realistic about the opportunities in the market. Utilising expert bloggers like Martin Lewis, and taking part in the discussion with consumers using forums for peer-to-peer support, reviews and sharing past experience is what could work for us. The 2.0 avenue is the one we are most likely to take as an industry, as long as we can provide valuable products and online content for this generation to discuss.  

Who do you feel are the trail-blazers of digital marketing within the financial industry? Are there any particular companies, agencies or individuals you admire for their innovation and approach to a difficult market, especially in this current economic climate?

For website usability, I’m a big fan of Norwich Union / Aviva and Virgin Money. They have really done their research into what consumers want, and their user journeys are pioneering if only for their intuitivism. Everything a consumer (both individuals and financial advisors) could possibly want is there, and it’s all serviceable online. If everyone else follows in the top dog’s footsteps, as is often the case in this industry, it will only quicken the growing comfort in purchasing financial services products online, and that it itself makes them both industry shapers. 

For digital marketing, most competitors have grasped the concept of the mix and are utilising it well, but for sheer creativity and being a pioneer in social media for financial services, CompareTheMarket and their agency deserve kudos for creating an entertaining brand personality that has real sticking power. It’s rare to achieve that in any sector, let alone for something reputedly as unexciting as car insurance.

What do you think the future holds in terms of online strategy for the financial sector? 

For the less complicated products such as general insurance and simplified life protection, usability will become much more intuitive, and the products will become more flexible for the customer who doesn’t want to have to pick up the phone to make small changes or provide further details for policy underwriters.

For products with longer or more complex lead times, such as sickness cover, annuities or index-linked investments, the future is less straightforward. Until the direct correlation between customer knowledge and product simplicity reaches its peak, providers need to develop their e-strategies simply to provide the customer with as much information as they need to make an informed decision, focusing on the selling points that will uniquely appeal to a savvy online sub-segment. 

Jake Hird

Published 22 April, 2009 by Jake Hird

Jake Hird is Econsultancy Australia's Director of Research and Education. Follow him on Twitter and Google+, connect with him on LinkedIn or see what he's keeping an eye on via diigo

126 more posts from this author

Comments (3)

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David Reilly

Annalaise,

I like the fresh, clean imagery and navigation of the LV.com website and the use of real life short films. While I agree usability is important I also believe digital channels in the FS sector need to reinforce greater trustworthy advise and personalisation with consumers.

Good Luck with your plans

David

over 7 years ago

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Nathan King

Great Q&A and elucidates what  many e-marketers and web managers must be feeling. Adapting company structures to accommodate and put more momentum behind the online channel is a painful process and one that can easily be sidelined for another year. With this in mind it is essential for the e-marketing teams to be as visible and vocal as possible and to drag peers into the online mix by demonstrating value and opportunities within the channel, as well as career development for offline marketers.

Even if formal structure is not reviewed an organic spread of involvement online will surely precipitate step changes in the near future.

over 7 years ago

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Toby Goldblatt

Annalaise

A great article and really strong insight, especially on the difference in strategies between short term and long term financial products.

I'd suggest checking out www.rubii.co.uk, which is directly pulling together a number of the themes you are talking about (Trust, recommendation, targeting sub segments, relationships) all based in a pretty advanced CPA type model.


Please contact me if you (or anyone else in FS) wishes to discuss how this can be maximised to benefit your business

over 7 years ago

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