Financial Services Communication Strategy

Trust and clarity are essential to realizing results.

Money. Although the word stands alone, it has a different meaning to different people and ubiquitously evokes strong emotions. Financial Services are unique in every aspect of business operation, including marketing communication. Trust and clarity in an otherwise complex environment make the challenges of selling financial services distinctive. So do the regulations that govern how these services can be marketed.

Trust

Trust is vital when dealing with financial services communication. A significant challenge for digital marketing is the record number of cybersecurity attacks experienced by consumers and businesses. According to the Insurance Bureau of Canada, cyber-attacks have increased by 89% in the past 12 months, with 91% of all cyber-attacks beginning with a phishing e-mail to an unsuspecting victim. Since cyber-attacks aim to steal consumer data and money, consumers are rightfully skeptical of digital marketing, especially relating to financial services. On the other hand, the consumer trust rate for direct mail is high, with 76% of people saying they trust the ads they receive in the mail. This is why direct mail is the channel most financial services institutions favour for targeted campaigns.

Consumer data protection is vital to maintaining trust:  Nothing is more important to your relationship with consumers than protecting the personal data they entrust you with. Compromise their data, and you can permanently lose their trust and, along with it, their business. The Information Security Management System (ISMS) a supplier has in place is critical to ensuring they can be trusted with your confidential consumer data. It also ensures that you maintain regulatory compliance. A vendor that is ISO 27001 Certified provides assurances that they take the responsibility of managing your confidential data seriously. “The rigorous nature of passing an ISO 27001 Certification by a licenced third party helps to verify that the appropriate ISMS is in place.”, says John Leonard, V.P. Sales and Marketing, Cover-All Business Communication Management.

These standards safeguard the security of assets such as financial information, intellectual property, employee details or personal information in a way that can be trusted to keep your proprietary data safe. When you turn over your consumer data to a supplier, brand trust should be top of mind. You will also quickly discover that suppliers with an ISMS certified to ISO 27001 are far easier to work with and provide peace of mind that they have built data security into your programs.

Personalization is key to building trust: Research has shown that 91% of consumers say they are more likely to shop with brands that provide offers and recommendations that are relevant to them, and 70% of consumers say direct mail is more personal than online interactions. Variable imaging helps financial institutions provide consumers with highly personalized messages. When the data is available, speaking to consumers as individuals with personalized data merged with standardized messages can create a higher level of trust and increase response rates.

When individual data is not available beyond contact name, market segmentation is an excellent place to add variable imaging, including demographics (age, gender, and income), psychographics (attitude, activities, and values), geographics (area, country, region), and behaviour (purchase pattern, product usage, product knowledge).

Emotional appeals help develop relationships: Consumers’ finances are profoundly personal, and messaging that assists them in attaining their basic physiological and esteem needs is a vital communication component. For some, financial security and stability are common emotional appeals, including the ability to afford a home, pay your bills, and put food on the table. For others, esteem appeals relating to lifestyle are employed, including the ability to retire early, travel, or buy that sports car you always wanted. The use of variable imaging to focus on different messages or the use of different stock images can help create a meaningful emotional connection with your audience that builds trust.

Clarity and Simplicity

Several federal and provincial regulations make financial services communication the trickiest to navigate. Too many to go into here. However, the Financial Consumer Agency of Canada (FCAC) has outlined clear language and presentation principles and guidelines for the industry, including:

  • Know your audience.
  • Make your material understandable by planning your text.
  • Write clearly.
  • Use the visual presentation to enhance your text.
  • Test your material.

The requirement that communication must be clear includes readability. It must be understandable to a general audience. The Gunning Fog Index (GFI)  and the Flesch Kincaid Calculator are tools used by marketers to determine the complexity of the text.  The GFI is often used in the banking and financial services industry to ensure that the text employed has a GFI of 8 or lower, meaning at a grade 8 reading level or lower. This is because most Canadians comfortably read at this level.

Direct mail is an ideal medium for laying out these simplified messages that often utilize accompanying graphics and charts. Direct mail is easier to understand and more memorable than digital media, requiring 21% less cognitive effort to process and eliciting much higher brand recall. This is important because making it easier for consumers to understand the messaging can help them to feel more secure in taking the next steps. Consumers can also hold onto the materials and review them later. In a Canada Post study, participants spent 118% more time with direct mail than with digital advertising.

Strategic use of direct mail formats improves clarity: The most effective way to generate a consumer response when dealing with financial services is by sending a letter with an accompanying flyer. Letters are perceived as more formal and essential and receive up to a 90% open rate. They allow ample space and formatting to help ensure regulatory compliance and provide consumers with enough information to make an informed decision, including copy, special offers, images, illustrations, graphs, charts, legal fine print, and QR codes that link to your website.

If letters are outside your budget, a cost-effective way to increase awareness and drive people back to your website for special offer details is through a personalized postcard. Although postcards require additional effort from the consumer to get all the details, adding a QR code can make this easy and interactive. Postcards are also beneficial when reaching existing customers throughout their lifecycle with trigger-based marketing. Trigger-based marketing efficiently employs direct mail automation to ensure communication is sent at the right time and often promotes special incentives, personalized offers based on historical buying habits, special promotions, and rewards programs.

Results

The other factor that makes direct mail appealing to the financial services industry is results. In an industry that is numbers driven and focused on results, direct mail outperforms digital marketing in many key areas that appeal to executives. Direct mail achieves a 4% response rate, compared to 0.12% for e-mail, and direct mail has a 20% higher motivation response than digital media, making it far more persuasive. In addition, 66% of participants exposed to direct mail campaigns had a higher brand recall and offered recall among those exposed to direct mail was also strong, at 57%.

As financial services companies capitalize on channels such as direct mail to build trust and clarity, they will want to ensure they partner suppliers with the Information Security Management System to safeguard consumer data and protect long-term relationships and their brand reputation.

John Leonard is V.P., Sales & Marketing for Cover-All Business Communication Management. He works with his team and clients to develop relevant and effective communications by using data and technology. Contact Cover-All Business Communication Management to find out more at (416)752-8100.

Related Posts

Five Compelling Reasons to Invest in Direct Mail in 2024

Five Compelling Reasons to Invest in Direct Mail in 2024

The Secret to Fundraising Success

The Secret to Fundraising Success

Consumer Data Protection is Vital to Brand Reputation

Consumer Data Protection is Vital to Brand Reputation

The Mail Automation Advantage

The Mail Automation Advantage