Rahul, a portfolio manager, started his own advisory firm 2 years back had a tough time scouting for new clients. After a tedious search, he managed to find few clients through friends and family. Initially, all the clients were very happy with the way Rahul managed their portfolio until demonetization happened. Rahul rejigged few of their investments for good according to the economic situation but failed to communicate the same to each of them (clients). Due to miscommunication, the clients doubted the firm’s intention and withdrew their accounts from it (firm).
Rahul was shaken. He was back to square one, his plans of expanding his business through these client referrals looked like a far-fetched dream now.
Matters become sensitive where money is involved. The relationship between a client and financial advisor or bank is based on trust. One misunderstanding can be extremely damaging to a business. Could Rahul have prevented these? Could he win back his clients? Could things have been different if he involved Digital Marketing in managing his relationship with them?
Yes, it would have!
It is important for today’s Finance professionals like bankers, CFPs and Relationship Managers need to know the nuances of Digital Marketing. Today, major Retail banking, Financial advisory firms, Wealth Managers, Insurance companies and Broking houses heavily rely on customer relationships. Traditional marketing like print or TV advertisements can only win customers however the responsibility on maintaining/sustaining this relationship lies solely on the financial institutions’ Digital Marketing strategies. Having said that, it is important for Investment banks, Asset Management companies and Equity research firms to rely more on Content Management. A chart below explains how.
(I) CUSTOMER RELATIONSHIP MANAGEMENT
Gone are the days when banks, insurance companies and asset management companies used newspapers, magazines or television to inform customers about the change in interest rates, schemes, new insurance policies, new asset classes, IPOs and NFOs etc. Today, since everybody is connected to some of the other social media platforms, it is easier for financial institutes to connect to them via these mediums, faster.
Monitoring performances on these platforms like better audience filtering and targeting are now possible through analytics and digital marketing. Today, most of the leading banks like HDFC, Axis, ICICI and Kotak have their presences on Facebook, Twitter and LinkedIn which are liked by existing customers and prospective ones too. Exposure to a vast audience, brand awareness and targeted promotion eases the customer acquisition process for the financial sector.
Relationship building and customer retention
The biggest advantage of digital media is that it is extremely interactive. Today’s customers are aware of their rights and seek every minute details/information from the banks or asset management companies about their accounts and investments. Features like prompt communication, quick redressal, educating customers about new developments and asking for their feedback through Twitter, discussion forums, hangout meetings have made interaction quite a simple task.
Since social media has made it easy for customers to have access to these financial institutes, it becomes important for them (financial institutes) to keep a constant tab on what’s happening on these public platforms. For example, if a customer becomes dissatisfied with the services and takes to social media to express his anger, the financial institution must act promptly to pacify the irate client as well as convert his experience into a positive one. Such an interaction when happens in the digital space leads to transparency and shows a company’s intention to amicably resolve the issue. This is also called Online Reputation Management or ORM.
Today public opinions spread like wildfire. Twitter, Facebook and LinkedIn all are abuzz with opinions, appreciation, criticisms etc. everybody wants to express themselves freely. Whether the experience is good or bad, it finds a voice. If someone has something positive to say about a bank or financial advisory firm or individual services by a CA, CFP or insurance advisor, it gets amplified on the social media and gives an immediate boost to the service provider’s brand image. This may also result in getting increased business or expansion through referrals.
(II) CONTENT MANAGEMENT
While Digital Marketing works on a customer-centric approach for banks, insurance advisors and professionals because of a B2C model, Investment Banking, Equity research firms and Asset Management companies have a B2B model wherein Content Management plays an important role. Today it is not enough if an investment bank only strikes lucrative deals, or an equity research company gives sound recommendations. They need to become ‘Influencers’. Influencers in the digital space are the ones who share knowledge rich thought leadership articles, E-books, whitepapers etc. and garner a huge fan following.
To achieve this is difficult. The idea is to reach out to as many people as possible and create an everlasting image. It is not uncommon to see established players like Kotak Bank, Aranca Research, PWC, KPMG so share research and data-oriented reports on the social media or through emails. The professionals employed in core finance field like Investment Banking, Equity Research or Industry research need to know about the following from Digital Marketing field-
- Search Engine Optimization
- Google Analytics
- Social Media Analytics
Digital Marketing: An indispensable part of the financial sector
Digital marketing spending in India in 2016
The above graph clearly shows that the BFSI or banking, finance and insurance sector has 15% share, third after E-commerce and Telecom, out of the total advertisement expenditure in India in 2016. The total expenditure is estimated at Rs 528.2 billion.
The financial sector, which is usually a little slow in adapting to changing trends has already realized that Digital Marketing is a crucial part of a business. Soon they will realize that it is an indispensable part of a business in times to come. As a finance professional you surely would want a competitive edge over others and what better way than to get trained in Digital Marketing.
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