A 2016 outlook from C.E.K. & Partners
What are the key marketing trends that card issuers and financial companies overall need to embrace for success?
What are the key marketing trends that card issuers and financial companies overall need to embrace for success?While financial institutions are trying out many strategies to engage and delight consumers, digital marketing is the big focus for many companies. Here are five key digital marketing trends we're monitoring.
1. Capturing revenue from millennials
Millennials are now the largest living generation, accounting for nearly 80 million Americans. As they reach their late 20s and 30s, many are starting families and businesses – depending on credit cards to finance their evolving lifestyles. Banks have gained a better understanding of the millennials' financial goals and needs. But it’s time to truly understand what offers, incentives, rewards or tools appeal to them.
The payments industry, like many other financial segments, has struggled to connect with this generation. But it is imperative that they do so – and soon – since as the baby boomers age in the coming years, issuers will find that the bulk of their cardholders are millennials, whose collective annual income will be worth trillions of dollars. According to Sarbjit Nahal of Bank of America Merrill Lynch in a CNBC interview, "by 2018 [millennials are] going to overtake the boomers. By 2025, we're looking at over $8 trillion worth of annual net income."
2. Keeping up with mobile apps
With eMarketer reporting there are 190 million U.S. smartphone users, representing 73 percent of all Internet users, it's no surprise that mobile-first responsive Web design is essential for any business. This is in conjunction with mobile apps, which flourished in 2015, and will continue to do so this year.
The payments industry, like many other financial segments,
has struggled to connect with this generation.
Mobile apps used to be just one of many channels customers could choose, but are now poised to become the preferred channel. While consumer brands like Realtor.com or Uber invest in creating the best mobile experiences, banks must catch up or risk losing consumers' attention to competitors or even alternate payments companies such as PayPal's Venmo.
Banks' apps must offer basic transactions – like the ability to check account balances, complete transfers and make mobile deposits. The apps must evolve to fully integrate other features like spending trackers or budgeting tools, photo-enabled bill pay and smartwatch compatibility. Today it's assumed that banks will offer an app – and now it's about making sure those apps are on par with consumers' expectations.
3. Creating highly interactive content
Brands have increasingly become publishers, creating entertaining and informational online and offline content to engage consumers. In 2016, companies will spend more of their marketing budgets on interactive content, and financial institutions should follow suit.
Mobile apps used to be just one of many channels customers
could choose, but are now poised to become the preferred channel.
Banks must accompany content-rich articles with interactive elements, including easily digestible video clips or tutorials, calculators, polls or quizzes and interactive infographics. Leveraging these digital and interactive features will enable FIs to personalize content and help deepen customers’ engagement with their brand.
4. Listening and engaging with social platforms
Whether posting culinary delights from a trendy new restaurant on Yelp or vacation photos on Instagram, consumers continue to share their preferences and opinions on social media. Some banks are taking notice – and starting to use social media to improve their marketing and better engage customers. A consumer banking study by Accenture found that "28% of consumers use information from social media when evaluating retail banking services."
Social listening tools can help financial companies better understand their customers and prospects. Following customers' "pins" on Pinterest, for example, might reveal aspirations such as home ownership or marriage. Companies can use this information to develop content and marketing messages for consumers who use these sites. Developing engaging social content that is searchable, specialized and shareable should be a top priority.
5. Getting more personal with big data
While the topic of big data is by no means new, more companies and brands are using both structured and unstructured data to create more personalized marketing initiatives. Most often, companies use data to target marketing campaigns at sizable customer segments. More marketers are realizing the power of data to target consumers on a highly personalized level – sometimes down to the individual.
Developing engaging social content that is searchable, specialized
and shareable should be a top priority.
Banks have access to unprecedented amounts of data along with high levels of customer trust. This means that they hold the unique ability to present the right offers to the right customers at the most opportune times. For example, a card issuer can single out cardholders and present real-time location offers for sweets at a nearby retailer after a cardholder uses their mobile wallet to purchase a coffee. Such an offer will be noticed and perceived at a higher value due to its relevance and timeliness – more so than offering a discount at the nearby dental office, which may lead to customers opting out of communication.
Will 2016 be a digital tipping point?
These are just some of the trends we are monitoring, but we believe issuers catering to today's digitally engaged customer will reach new heights in 2016. Whether it’s consumers' rapidly growing adoption of new technologies like wearable devices or simply increased dependence on mobile tech in general for everyday interactions, the payments industry must catch up. Consumers expect credit card companies to stay abreast of the latest technology trends, and those issuers that respond to these changing dynamics will find an enviable market advantage.
This article originally appeared in the February 2016 issue of n>genuity.