Question

1. Identify and review some of the strategies which the company uses to deal with the difficulties presented by the specific features of financial services marketing.

Answer 1

1. Building Trust with Customers

Trust building is the most important challenge that a Financial service provide faces. It takes lot of effort to win the trust of Customer and give them confidence that their finances are safe and sound with a Service provider.

Strategy to overcome this challenge

Transparency should be maintained in conveying the cost of such services. There should not be any hidden charges.

Realistic estimate of Return on investment- The services provider should provide a real estimate of return and the time period over which the same is being estimated

Empathy – The services provider should empathize with the customer and treat funds of customer as if he/she would do for his funds  

2. Complex Communications

Financial language is not a cup of tea for everyone. Customers at large are not aware of the technical aspects of investment or financial service.

Strategy to overcome this challenge

Communication to the customer should be kept as simple as possible and free of technical jargons. The expectation / outcome of customer should be conveyed in simple terms which is of interest to him /her. For e.g. Regular communication of in terms of Total investment done, Returns accumulated and time period elapsed

3. Frequent Changes & Costly Innovation

Change is only the permanent things. The speed with which regulations and dynamics of the business changes require significant updation of knowledge and IT systems.

Strategy to overcome

Timely updation of IT systems and communication methods with customer would help overcome this challenge quickly. For e.g. With smart phones, a easy to manage Mobile App can help overcome this challenge

4. Marketing & Promotion of Financial services

Todays business environment is overloaded with numerous financial products. The customer does not know which product to buy hence is afraid of making investment.

Strategy to overcome

Financial providers should have a bouquet of simple products which are easy to understand for the customer. They should create their marketing programs around such simple products only

5. Lack Customer awareness

Todays customer is not financially sound. They do not know the importance of financial planning. Safety is paramount for them rather than return. Due to this they tend to ignore higher returns financial products, for e.g. Mutual Funds

Strategy to overcome

The Financial service provider needs to have personal touch with each of its customer by appointing a relationship manager, who can help build a financial portfolio for the customer as per his requirements and Goals