COVID-19 has upended numerous industries—travel is nowhere near previous levels of activity, restaurants had to completely rethink their business models and the same goes for retail stores.
Similarly, financial services brands found their normal processes turned upside down. The closing of locations and limiting of in-person interactions created a sudden and overwhelming demand for digital—an abrupt change few were sufficiently prepared for. Financial services brands needed to be sensitive and relevant to consumer needs, quickly, including proactively addressing consumers’ shifting financial behaviors.
One key trend during COVID is that consumers are spending less and saving more. According to new research from Epsilon, consumers are making shifts in how they manage their finances:
- 35% are saving more.
- 17% are putting fewer expenses on credit cards.
- 17% are focusing on paying down loans or credit card debt.
Only 31% of consumers are not making any changes; which means that 69% are shifting their finances in some capacity.
Saving is certainly up, and with so much economic uncertainty, it’s not surprising that people are holding on to their money a bit more. In fact, the US experienced similar behaviors during the 2008 recession, when we saw households cut spending, shed outstanding debt and increase their rate of personal savings in response to reductions in income.
What can financial marketers learn from understanding consumer attitudes right now? And more importantly, how can they use that information to influence marketing decisions during the pandemic and into recovery?
Here, we look at key insights from the report and provide actionable takeaways for financial marketers reevaluating their digital marketing strategies:
Be the partner your customers turn to for advice
Financial partners can play an important role in helping customers make smart financial decisions during this time. But to do that, they need to be seen as trusted advice-givers, which seems to be the bigger problem:
According to the survey:
- 34% of consumers turn to their spouse for financial advice.
- Only 16% indicated they ask for financial advice from their stockbroker or investment representative. An even smaller percentage (11%) talk to their banking representatives for advice.
- 28% say they don’t have anyone to turn to for financial advice.
Based on these findings, financial institutions have opportunities to ensure they’re seen as a trusted partner during these uncertain times. With so many respondents saying they don’t have anyone to turn to for financial advice, financial institutions should fill that void as a trusted advisor. Firms can do this by delivering personalized, relevant messaging that includes informative content that guides smart decisions and reinforces the bank’s value to the community.
And, when we break out the data across generations, we see that Gen Z consumers are twice as likely to consult a bank representative for advice compared to other generations. This group is also saving more: Gen Z (45%) and millennials (49%) were the largest groups indicating they were spending more. This is a great opportunity to guide them through the process of saving and investing wisely, and set the groundwork toward building a lifetime of financial loyalty.
Build trust through customer-first messaging
The right message can mean continuous engagement with a client or prospect while the wrong message—or a poorly timed message—can limit interest from an individual.
So what are consumers looking for? With email having a renaissance as the primary source of communication during COVID, how can your messaging help and resonate?
What consumers are looking for from financial brands:
- 28% want information on smart ways to make more from your savings
- 21% want to see how financial institutions are helping the community (e.g. healthcare providers, seniors, etc.)
- 17% want to see how their financial partners are supporting employees during this time
- 39% of respondents don’t want to see any messages from their financial institutions.
From this, there are a few takeaways for financial brands to consider as they continue communicating with customers throughout the pandemic:
Align content to customer goals. Smart savings is generally a top priority for financial customers on an ongoing basis, but looking at the broader data on what consumers want in messaging, it’s clear that every message needs to be tailored to each individual’s unique situation. Simply sending a broad message on “saving smarter” isn’t nearly as effective as sending more tailored messaging to address unique situations such as decreasing their debt or ideas for what to do with extra money (e.g. higher yield savings, apply to your IRA, send to college fund). The individual’s unique situation can and should play a critical role in how you talk to them.
Show you care. Content aligned to the individual’s goal always comes first, but showing your financial institution cares about what is going on in the world comes second. There are numerous ways to do this—through highlighting efforts to support employees as many juggle kids in virtual schooling and working from home to simple acknowledgements of support your organization is providing to healthcare institutions, small businesses or nonprofits during this time. Don’t be afraid to show how you’re helping and make sure it’s an authentic representation of your brand’s values.
Acknowledge the elephant in the room. Not all customers want to hear from you right now—dig into understanding why that is. Have you had poor communications in the past? Are finances just not something a certain audience wants to discuss right now? Are you missing the client’s financial goal in some way? Take a moment to acknowledge what the problem actually is and determine the right follow-up strategy that will add value to your conversation again.
Knowing your audience is more important than ever
The one larger takeaway from seeing all of this data is that understanding your customers—both how they’re viewing finances right now and understanding their relationship to and needs from your business—is critical right now when they need support more than ever. It’s time to get to know your customers’ needs by connecting with them across their many devices, rather than in person. Even though customers won’t be relegated to the home forever, the financial shift to digital is one that isn’t likely to revert.
The problem is that many financial brands struggle with knowing their customers online; according to Forrester research, only 40% of financial brands are confident that their customer profiles are complete and accurate.
To position your brand as a valued partner, you need to have a holistic view of the customer. This helps you to identify emerging needs as they arise—whether it’s help with savings, navigating the home-buying process for the first time or making their retirement savings last longer.
With a more complete view, you can understand each individual’s behavior and goals, and then tailor messaging and offers to reflect their needs across marketing channels.