By Rob Smith, Growth Director at digital marketing group Incubeta
The fragility of the economy, and its impact on personal finances, has left consumer confidence at an all-time low. Many people are having to adjust their approach to their daily lives to make money stretch further. That’s why 67% of UK consumers point to rising prices as being their top concern, while 70% have changed their shopping behaviours to account for inflation.
With the UK also on its way toward a lengthy period of recession, changing consumer behaviours are also going to have a significant impact on brands – having not just to cope with reduced sales, but the possibility of decreasing stock availability and supply chain issues. But where some brands struggle, others have the opportunity to thrive.
The opportunity for banking and fintech
Consumers are desperately looking to brands that can offer them support during these trying times. They’re seeking out advice and guidance on how they cope with the rising cost of groceries, energy, and petrol, but also looking for businesses to offer them real solutions to the problems they’re faced with.
This has opened up a major opportunity for banking and fintech brands in particular. The current economic climate presents the chance for them to engage more customers, promote products that can help these customers, and ultimately prove value beyond day to day operations.
So, what steps can banking and fintech brands take to prove their value to consumers during this cost-of-living crisis?
Putting the customer first
The first factor to instilling confidence in consumers is ensuring that they’re being put at the heart of the business, and that all actions are carried out with their best interests in mind. A marketing strategy should always aim to combine data with the human touch to ensure the campaign responds appropriately to a consumers’ context. Programmatic ad tech solutions will help the finance industry to analyse huge volumes of data, but there is a fundamental flaw to this in that machines lack the human understanding. Simply put, they have no ‘heart’, empathy or lived experience.
Financial brands who demonstrate empathy and understanding will enable them to break through the competition and engage with customers needs at the moments the consumer needs them to be. It’s about understanding and knowing when those needs may arise, then offering up a solution that solves whatever their problem may be.
Failing to put the customer first, or failing to identify any problems that may arise for them, particularly during the current economic climate, will put an end to any hopes of being able to win over consumers.
Ensuring privacy and security
One of the big talking points in recent years has been the topic of data privacy which is directly linked to consumer confidence. In the finance category, it’s perhaps more important than anywhere else, because of the nature of the customer data that is being managed.
Financial brands have to ensure they are a trusted digital partner for customers, and are completely transparent about the way they utilise customer data, proving they do so responsibly and securely.
As the finance industry is the third most targeted by hackers, offering advanced tools such as biometric tracking and verification checks within any products or services are crucial to giving customers peace of mind.
Build consumer confidence through brand visibility
Building on the foundations of customer centricity, privacy and security, brands can begin to instil confidence in both their existing customers and potential new ones by continuing to invest in advertising to promoting relevant, reliable, and effective products and services that are suitable to the current environment, and can be viewed by the consumer as valuable additions to their day-to-day lives.
In times of economic downturns, the instinct of many brands is to pull back significantly on marketing spend. However, this is likely to do a lot of damage to the brand in the long run. For example, in 2020, a leading beverage company cut its budget by £1.6bn, due to the pandemic, leading to a net revenue loss of 11%. In the same period, a leading competitor increased its ad spend and secured a 5% growth for the year. Brands that continue to invest in advertising and marketing during tough economic periods come out best on the other side, and improve their standing versus their competitors.
In the short-term, a brand may see return-on-investment take a hit. But they will reap the benefits in the long-term. Thinking about marketing investment purely in the short-term will lead to long-term profitability taking a hit as well and ultimately negatively impact customer experience.
Automating the experience
In digital marketing today, the use of data and automated technology has become table stakes. Brands should be partnering with specialists that can automate key differentiators in marketing such as bidding and measurement.
Ultimately, artificial intelligence and machine learning can help the brand to reach the right consumers, in the right place, at the right time, and ensure they are delivering on the needs of those consumers. For example, a new parent reading baby blogs might also be interested in investing in a lifetime ISA for their child. This technology doesn’t just help to drive business performance in the areas that matter most, but also improves operational efficiency by making it easier for employees to fulfil their roles and increasing productivity.
Winning over the consumer
Though the cost-of-living crisis may prove damaging to consumers and brands alike, there are several steps that banking and fintech businesses can take to prove to consumers that they are there to help during these trying times.
Consumers are actively looking for ways to reduce their spending, and seeking advice and support from brands. The window of opportunity for financial companies to provide what these consumers are looking for is clear, and it’s time to start winning them over.