Catalyst

How to keep your smart buyer faithful

Puneet Nanda | Updated on November 27, 2014 Published on November 27, 2014

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The customer for financial services is changing. Are marketers keeping pace?



Meet Vikram, a 42-year-old family man who is doing well. Two decades ago, when Vikram started earning, he opened a bank account and got a cheque book. Within a year, he had started a fixed deposit, bought a life insurance policy through a distant relative and opened a PPF account with his bank. For most of these, he went through physical documentation and made choices based on the limited information available. Enter 2014.

Today, Vikram’s relationship with his money has changed substantially. His banking is mostly online, with only a few visits to the ATM. He has converted all his insurance policies to electronic form. He directly buys his mutual funds and keeps track of the portfolio movement online. He frequently uses his credit card for his purchases. The rules of the game have changed.

The modern consumer is information-seeking, time-poor, tech-savvy and ‘socially’ active.

While such aware and smart customers are a delight to the marketer of BFSI (banking, financial services and insurance), it is a huge challenge to keep them engaged with the brand and drive purchase preference. Let us see how.

Hunger for information

Vikram today is a smart buyer. While planning his vacation he chooses his hotels carefully.

Other than looking at just the best room rates, he also looks for the feedback given by previous guests at a popular travel site.

Similarly, before buying any financial instrument, he loves to get more information through blogs, websites and social media such as Facebook.

Providing relevant information is not so simple. While dealing with financial products, customers often want to see the complete picture but are daunted by too much information. The whole list of terms and conditions is important but it is difficult to go through all of it. The challenge is to balance simplicity and relevance.

Reputation in the open

To give the relevant information to Vikram, the brand marketer will have to carefully plan the brand presence across the new media. Well-managed brand engagement with the customer on non-traditional media can lead to lower acquisition cost and solve the ROI challenge for the marketer.

Today financial brands need to manage their reputation in social media. Prospective customers get influenced by what other people say. Financial services are known to get a higher share of negative comments as it is much more difficult to maintain a consistent customer experience than in the case of manufactured-product brands. The challenge is not only to minimise the actual negative experience but also make sure that a balanced view is presented in social forums so that the reputation is maintained.

Time is money

Vikram is also a busy person and values his time. He hates to stand in queues and is used to the convenience of buying movie tickets, books and even groceries online. This behaviour affects his financial transactions as well.

So while he wants to buy an insurance plan for his family’s future well-being, he is keen to not spend his time on paperwork and medical tests.

The marketing challenge here is to make sure that the purchase and delivery is fast and hassle-free.

A purchase process that eliminates paperwork and gets completed in minutes will be instrumental in making Vikram the brand customer.

The future looks promising

The good news is that marketers are matching customer expectations with innovative offerings.

Today, it is possible to buy insurance in a few minutes with only a single document, quite often without medical tests, and store the policy electronically.

Today it is possible to do banking through Facebook and on your phone. The entire brand interaction mechanism is changing to suit the new customer. While the new customer behaviour presents marketers of banking, financial services and insurance with a lot of challenges, it also opens new doors of differentiation.

A tablet-based transparent and quick insurance buying solution is setting apart some insurance players from others. A social media-integrated saving mechanism can make a financial brand more differentiated.

Customers like Vikram are likely to favour brands that give them complete information in a simple way. The life of a BFSI marketer is indeed challenging and exciting at the same time.



Puneet Nanda is Executive Director, ICICI Prudential Life Insurance Company Ltd

Published on November 27, 2014
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