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Feature... Banking on loyalty marketing

Financial marketing is a low involvement category, with little brand loyalty. But digital media is giving brands new cause for optimism.

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In the last few years, Asian financial services companies have undergone a shift in the way their products and services are branded. For many, branding is no longer considered as simple as a few catchy adverts, and managers now recognise that branding affects the entire business over the lifetime of the relationship with the consumer.

Still, marketing a financial brand can be tricky: brands are often low in engagement but high in loyalty (or, more appropriately, lethargy), operating in a low-involvement category in which a combination of lethargy and lack of interest has become a highly effective substitute for brand loyalty.

Yet some financial companies are creating engaging and effective brands by using a new media mix, offering altogether new messages to consumers and even altering their product development strategies to create true loyalty.

Although the media mix varies slightly by country and income bracket, the need for accountability and demonstration of ROI have created a massive shift to both online media and innovative outdoor media. Traditional uses of media (such as television and the press) have yielded to interactive and digital uses.
HSBC, for example, still employs a variety of media because it operates across the board - from consumer banking to corporate banking.

“However it is quite apparent that our customers are more time-starved, thus we have to be not only compelling with our offerings, but we also have to employ an integrated media mix to get their attention - let alone their interest,” says Rosanna Hon, head of brand development and management.

Digital offerings are no longer reserved for the business traveller either. As consumers themselves become more mobile, using digital and electronic media, such as mobile, internet and SMS, digital is increasingly entering the marketing lexicon of Asian financial services companies.

For example, to raise awareness of the American Express sponsorship of the Australian Open in 2006, Ogilvy & Mather Asia-Pacific introduced a promotion in which card members were encouraged to enter their predicted daily winners via SMS. Those who chose the correct winner moved on to subsequent rounds - similar to the tournament itself - and the eventual winner was awarded a trip.

MasterCard also uses an integrated marketing mix to target consumers - from public relations and advertising to direct marketing and sponsorship platforms, explains Natalie Lockwood, group head, global marketing, Asia-Pacific, Middle East and Africa, MasterCard Worldwide.

“As consumers become more discerning, there is a need to engage them with sponsorships properties that resound with them,” Lockwood explains. “We have a series of retail and sponsorship properties in the region catered to the lifestyles of our target audience, including retail sponsorships” such as the Great Singapore Sale, Malaysian Mega Sale, Taipei Great Sale and fashion properties such as the MasterCard Luxury Week Hong Kong, Australian Rosemount Fashion Week and Singapore Fashion Festival.

Internet-savvy consumers also want to be kept informed of unique offerings and experiences that can be provided quickly online, Lockwood adds. Witness the MasterCard Moments site: it’s an online repository of value-added privileges and bespoke services  for premium MasterCard cardholders to enjoy new experiences and share treasured moments with friends and family.

“Speaking directly to those consumers, the site provides specially designed packages and benefits from an assortment of leading hotels, spas, golf courses, restaurants, merchants and retailers for MasterCard cardholders,” she adds.

The new media mix allows for brand managers to efficiently target fragmented audiences. Although it is not without its challenges, some financial institutions are optimistic about the potential opportunities. Communication with consumers is more tailored than ever before as managers take advantage of that fragmentation by segmenting their audiences.

“The amount of segmentation in (the credit card) sector over the last few years has risen dramatically,” says Matthew Godfrey, CEO for Publicis Asia, the global agency for Fidelity and Citibank and regional agency for Western Union and Aviva. “Financial services is all about packaging the right products. Media fragmentation means that highly tailored products can be positioned with the right consumers in the right media to get the right results.”

American Express recently made a strategic decision to narrow its audience segmentation, focusing its efforts on a smaller but more profitable target: the affluent. As a result, its communication budget is spent more on acquiring premium products card members. So, this year, the brand’s presence increased at high-end shopping malls in Hong Kong and Australia, and it introduced an exclusive Platinum Card to potential new members of its Platinum Club in India.

“It is truly a consumer-ruled world, and marketers must pay the price to stay in the game,” Hon says.
In Asia, though, financial brand managers — recognising that a consumer’s main banking relationship (i.e. where the salary is deposited) —are carving their niche in the added value categories such as wealth management, investment products and personal lines of credit. It is in those segments that consumers are expected to engage in multiple relationships with different financial brands.

“It’s not uncommon in Asia for a person to carry 15 to 20 credit cards, for example,” Godfrey says. “Therefore managing customer relationships and attracting share of wallet is a constant challenge. This is consistent across Asia, where there is tremendous optimism for the future, and consumers re looking for financial brands to help accelerate their needs.”

Yet acquiring customers is one thing; keeping them is another - and some media channels have proven more effective than others in building loyalty. Brand managers agree that digital media offer the best returns on loyalty-based programmes. Everything from phone to online banking to personalised email is helping keep the customers. “Those are the critical touch points where loyalty is won or lost,” Godfrey acknowledges. “Other media channels may be more effective for driving awareness, usage or acquisition, but for loyalty positive, ongoing engagement is the key.”

Ninety-seven per cent of Asians agree that financial security is very important to them, according to Grey Global Group’s ‘Eye on Asia’ study, a 12-country study released last year that surveyed 4,400 Asian adults. Yet savvy consumers still want their financial brands to be trustworthy and credible, and any breach in that relationship, which is increasingly becoming more intimate and personalised, could affect the loyalty consumers feel for their brands.

With increased access to information via the internet and mobile phones, Asian consumers from Japan to Singapore are demanding more transparency and accountability from the brands they interact with.
As a result, marketers need to be prudent in quenching consumers’ thirst for information that will help them make the best choices for themselves. In return, brand mangers contend, consumer loyalty is solidly established.

As the media mix changes, so does the message. Financial brand messages have changed - matured, even - as consumers themselves have become savvier in the last decade.

A host of macroeconomic issues since the late 1990s have helped shape the Asian consumer of today: the explosion of the middle class in China and India, the economic meltdown, the dotcom bubble and the proliferation of world-class financial products and services.

As a result, “consumers are far more aware of money and their risks than they were before,” Godfrey explains.

Therefore as consumers have changed, so have the financial brand messages targeted at them. Branding has increased, but it also has become more sophisticated, flexible and responsive to the changing consumer landscape.

“When MasterCard surveyed the marketplace in 1997, we knew the brand was in need of a repositioning,” Lockwood admits. “It lacked a distinct brand image that would capture the hearts and minds of consumers.”
That gave rise to the highly successful ‘Priceless’ campaign, whose research results showed that during the late 1980s and early 1990s, consumers had radically revised their definition of success - the splashy cars, designer clothes and indulgent vacations. This new definition of success “was less outer-directed, and much more inner-directed - less about appearances, and more about meaningful experiences,” says Lockwood, who says MasterCard’s success with the campaign is based on its recognition that today’s consumers value time, freedom, and comfort and are willing to pay for the tools that help them experience those.

The MasterCard Priceless campaign now reaches consumers in 109 countries and in 50 different languages.
Product development strategies are shifting as well to a more tailored approach. As the industry becomes globalised, local banks are expanding their geographic reach, and the major players are expanding their offerings. Some financial institutions, which have begun to add complexity to their products, are now stripping away that complexity, allowing for simpler choices.

“We have seen this trend in many categories before, and we will see a surge of customisation. Whether this proposition is sustainable is a big question mark, simply because the financial markets are highly regulated, and rightly so,” Hon admits. “There’s only so much liberty in terms of being creative in the offering.”

No matter, financial brands still face a bright future in regard to the media on offer to get their messages across and to build loyalty. Consumers on the whole don’t want their products and services to be complicated, brand managers say.

Loyalty is built on customisation, yes, but it is maintained by focusing on simplicity. “Make it clear and simple for consumers to get engaged with the brand and the products,” Godfrey says. Hon agrees. “If the marketing is customer-oriented, effective messages will see the light again,” she says.

This article was first published on Media Asia

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