Cash in on their emotions

Financial services communications are largely ignored by consumers, who find the marketing dull and uninteresting. But how can banks make their products more appealing?

A pop video featuring bank staff singing the praises of their products doesn’t sound promising. But, as we all know, Halifax’s “staff-as-stars” campaign was a hit, boosting the bank’s market share and turning Howard Brown, the bespectacled Brummie who starred in the commercials, into a minor celebrity.

Most financial services communications do not carry the appeal of the Halifax campaign. In fact, according to a recent survey commissioned by financial services specialists CCHM:Ping, the vast majority of consumers consider the advertising, websites and direct marketing efforts of financial services companies to be dull and uninteresting.

That is a huge indictment of an industry that spends almost as much on advertising as the food and drinks sectors combined. It is also, or at least should be, a matter of real concern to the politicians urging us to save more for our old age. Clearly a lot needs to change in the world of financial services marketing, but is it simply a matter of communicating in a more engaging way, or do financial services providers need to rethink their understanding of how consumers relate to money?

Making financial products sound interesting is one of the toughest challenges in marketing. Consumers pay lip-service in surveys to the importance of managing money effectively, but, when given the choice, most of us prefer a little retail therapy to dissecting the fine print of savings and investment plans.

Keep it simple, stupid

To do the job properly, financial companies must have the knack of turning complicated subject matter into something that even the least financially literate consumer can understand. Added to this are the regulations, imposed by the Financial Services Authority, governing what companies can and cannot say in advertising. “Communicating a simple, strong message is extremely challenging when there are so many caveats that have to go in,” says Purple Market Research director Stephen Bairfelt.

Some financial services providers negotiate the complexities more nimbly than others. Among the better performers are the supermarket banks, such as Tesco and Sainsbury’s, which have taken a conscious decision to make their financial branding consistent with the values and inclusive spirit of their stores. “We start on the assumption that we’re here to demystify financial services. We use simple language and keep to a style that fits our brand,” says Sainsbury’s Bank director of customer insights Tom Kerr.

A conversational style and an unstuffy culture are good for targeting the mass market, but for retail banks and providers of specialist investment products, which serve a mix of high net worth investors and financial novices, achieving the right tone of voice can be tricky. “There’s a danger of appearing too similar to other high street outfits” warns Terry Tyrrell, European chairman of brand design consultancy Enterprise IG.

Even so, offering reliable information in clear, simple English is never a bad goal to aim for. In this respect, most commentators concede that the traditional providers have something to learn from the newer entrants. “The financial services sector can be quite insular. The instincts and the vocabulary of the people who work in it are often quite unlike the way people think and talk about finance in the wider world,” says Abi Bray, client director at marketing insight company Added Value.

Less jargon and a more contemporary tone of voice might make people feel more comfortable with the business of researching and applying for financial products, but to get to this point, potential investors must be motivated to take the first crucial step of finding out what is on offer. Focusing advertising on the emotional goods that money can bring could offer the solution to this problem.

Some market research agencies are exploring the human side of money. Added Value, for example, gets people to describe their relationship with their finances by building a scrap book of images. Other techniques include asking people to keep video diaries of the things that matter most to them.

The 32 stages of man

Understanding how individuals differ in their knowledge of finance and their attitudes to money is also crucial to developing communications that engage people. The traditional approach is to use segmentation techniques that seek to categorise different types of consumers. NOP, for instance, offers a tool that divides the market into nine major segments and 32 sub-segments, each associated with a memorable descriptor, such as “pink fizz”, “golden boys” and “silver foxes”.

Segmentation models have their limitations, however. One obvious problem is their reliance on highly simplified stereotypes. Added to this is the traditional assumption that people pass through different life stages in a predictable, almost linear fashion. Yet for many people life is a great deal messier.

Tugging on the heartstrings

But focusing on the twists and turns of modern living is more complicated than traditional life-stage analysis. But it might also offer a way into the problem of how money management can appeal to people’s hearts. “It’s often when we are confronted by a life-changing event that we become interested in finance for the first time,” says NOP World Financial managing director Europe Nick Watkins.

Of course, there are risks to marketing financial products on the back of an emotional appeal. According to research published by Mintel in December, over a quarter of all adults feel they have a poor understanding of financial products. Unless this issue is adequately addressed, there is a strong chance that people will end up making bad financial choices.

To avert this situation, says Crawford Hollingworth, chief executive of qualitative research and strategy consultants Headlightvision, financial services providers need to find ways of supporting consumers in their search for trustworthy advice. Among the possible avenues to explore, he suggests, are greater involvement in schools, the creation of information exchanges on the internet and sponsoring a financial information service.

The most powerful advertising appeals to our hearts as well as our heads. This is as true for unit trusts and ISAs as it is for baked beans and washing powder. However, unless financial services providers can rise to the challenge of combining a strong emotional appeal with information that genuinely helps people to make better decisions, the industry will end up sullying its image further.

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