Relevance of financial direct mail has gone down, not up
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Investment product providers are failing to engage consumers who intend to invest, especially those most likely to have the wealth to buy their products.
Seventy per cent of consumers say that the majority of mailings they receive from this sector are irrelevant. Only 13 per cent said that most of the items are of interest.
Research carried out among 1,000 consumers by consumer insight company KDB found that 71 per cent do invest, either directly or through a financial adviser. Two thirds are also planning to increase the amount they invest this year.
But the direct mail being sent to potential investors is not aligned to their needs. Among those aged over 45, the proportion saying direct mail was irrelevant rose to 77 per cent, while those who were engaged by mailshots fell to 9 per cent of 44 to 55-year-olds and 11 per cent of those over 55.
Matt Boot, chief analyst at KDB, says: “At a time when marketing and communications could be vitally important for firms focusing on investment products and services, the findings do not bode well for the mass of players in this area. But it also means that there can be huge opportunities for those that get their messaging and their approach to the marketplace right.”
Readers' comments (2)
Steve Abbott | Thu, 10 Jun 2010 7:45 pm
The total number of people who received marketing communications for Savings and Investment products was 19.2% so far in 2010. Data from The British Marketing Survey. This compares with 36% for Credit Cards and 43% for Insurance. The interesting thig is that when asked about the acceptability of such material 14.7% said that Savings and Investment was acceptable compared with 14.7 for Credit Cards and 19% for Insurance. This may suggest that S&I marketing is better targeted than Credit Cards or Insurance. More detail can be obtained from www.thebps.co.uk/bms
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Richard Higginbotham, marketing head, Transactis | Fri, 11 Jun 2010 10:22 am
KDB's research highlights the huge misuse – or lack of use – of customer and prospect data that is all too prevalent in many businesses.
Many organisations hold enormous amounts of data on their customers that can provide valuable insights into these consumers’ purchasing patterns, preferences and behaviour. However, for many organisations, such data is collected but never used to deliver effectively targeted and personalised marketing communications. It is a phenomenon we’ve dubbed ‘data wastage’ at our firm.
Our own research shows that 65% of consumers say companies have sent them offers for products they would never buy – even though they have previously handed their personal details and preferences to these firms.
Not only are many companies wasting spend on poorly targeted and sometimes redundant offers but consumers are taking note, which is no good for the long-term health of a brand. This is clearly a big problem in the financial services sector.
In order to eliminate data wastage and start to hit the mark with their communications, financial firms clearly need start to pulling their customer and prospect data together and then analysing it in order to more effectively target and tailor their communications.
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