The first section of this book has made three main points:

1. The retail financial services industry has been very successful over many years without the need for a great deal of marketing.
2. As a result, on the whole the industry isn't very good at it.
3. Things are changing, and the industry is going to have to improve if it's going to continue to succeed into the future.

The second and longer section will go on to paint a picture of what this improved marketing might look like. In this chapter, we briefly introduce the key components as we see them. But first, a summary of the current position as perceived by the respondents in our Financial Services Forum quantitative research.

The first part of the study asked some questions about the respondents as individuals, and particularly about their experience and expertise. Reflecting the make-up of the Financial Services Forum membership, they were a senior and experienced bunch: just over half had worked in financial services for over 20 years. We were impressed, too (and if truth be told, a little surprised) by the extent of their academic qualifications in marketing. Again a little over half told us that they had been educated to degree level (23%) or to postgraduate level (31%) in marketing. An even higher proportion, over 60%, told us that they had other university qualifications in business, 31% to degree level and 31% as postgraduates. We should emphasise that these findings reflect the profile of Forum members rather than the financial services marketing community as a whole, but certainly they suggest that there's no shortage of academic firepower in the industry.

It's also important to note, before we explore the views of respondents on the quality of their efforts, that the large majority work in businesses that target end consumers, either wholly (12%) or in part (63%). Only a quarter work for firms that don't target end consumers at all, mainly because they rely on employers or intermediaries to reach their customers on their behalf.

In Chapter 2, we looked in some detail at respondents' perceptions of the role of marketing, both in theory and in practice, in their current firms. Using the familiar Seven Ps as a way to define the territory, we said that there was no consistent view on the theoretical scope of the role that marketing should play – but there was a somewhat more consistent (and disappointing) perception that in real life, at present, the only one of the seven areas that clearly falls within the remit of the marketing department is ‘promotion’ – in other words, marketing communications.

This very narrow view was reflected again in respondents' reactions to one of a number of attitude statements that we explored in the research. We asked them to what extent they agreed with the statement ‘People in financial companies understand that marketing means much more than just communications’. Only 3% agreed strongly with this, and only 25% agreed at all. The large majority, clearly, believe that their colleagues think of marketing more or less entirely in terms of communications. That old colouring-in department stereotype is still alive and well.

This was part of an overall assessment at least as downbeat as anything we've covered in our earlier chapters. For example, when presented with the statement ‘Very few financial services providers are really committed to marketing’, 60% agreed and only 20% disagreed (and of those, only one single individual disagreed strongly). And when asked for their response to the statement ‘On the whole, the quality of marketing in financial services is lower than in other service industries’, those who agreed (54%) outnumbered those who disagreed (27%) by two to one.

At least in part, respondents thought this was for the simple reason that marketing is harder in financial services than in other service industries. They agreed with a statement to this effect by 49% to 28%. And we weren't surprised to find an even more widespread belief that marketing is harder in financial services than it is in fast-moving consumer goods (FMCG) – almost exactly half agreed with this, with only 22% disagreeing. (On the contrary, the figure that surprised us was the 22%. In our view, marketing in financial services is a very great deal harder, for all sorts of reasons, than marketing for products that you can eat, drink, drive, wear or apply to make you smell nice.)

But all in all, our financial services marketing respondents were remarkably critical of the status of financial services marketing, and this view played out consistently in other findings from the research.

Elsewhere in the study, we asked a question about our sample's perceptions of ‘financial services providers in general.’ To what extent, we wanted to know, did respondents agree that firms are ‘close to their customers and understand them well’? Not to any very great extent, came the answer. Only 15% agreed (and of those, only 3% agreed strongly): at 61%, those disagreeing outnumbered them by four to one. Of all the findings in the research, this one seemed to us the most self-critical from the point of view of people in marketing departments: after all, whose job is it to ensure that firms are ‘close to their customers and understand them well’?

The finding can only mean one or both of two things: either marketers are failing to do the work to achieve that kind of closeness and understanding, or they're doing the work but failing to share it with their colleagues. That's not brilliant either way.

In the same part of the questionnaire, we provided two more statements that generated similar responses. One proposed that firms ‘care about their customers and consistently treat them well’: 20% agreed with this, but 45% disagreed. (In hindsight, the question combined two ideas in a way that makes the responses hard to interpret – were our sample commenting on the level of care, or the consistency of treatment, or both?)

The other boldly proposed that firms ‘are positively perceived by most of their customers’. Only 11% agreed with this, and 58% disagreed. This and the previous two findings demonstrate that the industry's self-perceptions are at least as negative, and maybe even more so, than the perceptions of customers as we report in our chapter on the subject of trust, Chapter 14.

That said, we make the point in that chapter that consumers tend to feel much more positive toward their own providers than toward the industry as a whole, and the same is true of our sample of marketing professionals. As we said above, only 15% believe that firms in general are close to their customers, and 61% think they aren't: however, when the same people are asked about their own firms, 45% think they're close to their customers and just 32% think they aren't. Similarly, nearly 60% agree that they care about their customers and consistently treat them well while only 12% disagree (compared to the industry-wide figures of 20% and 45% quoted above). And 53% think their own firms are positively perceived by most of their customers, while only 11% think the same can be said of the industry as a whole. It's hard to know what to make of these findings, but there is a well-known research effect in which respondents have much poorer opinions of those around them than they have of themselves. Other studies have found, for example, that the huge majority of respondents believe that they're much better than average drivers, much nicer than average people and so on.

Still, in our marketing professionals study, such glimmers of positivity don't do much to lighten the overall gloom. Elsewhere, we asked respondents to what extent they thought their own organisations were customer-led, and in a finding that clearly suggests one of the most crucial areas for change in the future only 36% said their firms were ‘pretty good at it’: 52% thought their firms were ‘not very good at it’.

And in another finding with obvious implications for the future, while 94% said that in their view a strong consumer brand was important for their business, very nearly half – 48% – believed that their organisation doesn't currently have a strong consumer brand. (Perhaps unkindly, we can't help raising an eyebrow at the 52% who believe their firms do currently have strong consumer brands. Unless these respondents were freakishly concentrated into a very small handful of institutions, we'd suggest there's a great deal of wishful thinking reflected in this figure.)

With 94% of respondents expressing a view that a strong consumer brand is either ‘very important’ (42%) or ‘increasingly important’ (52%) for business success, we can presumably expect to see a great deal of brand-building activity in the future.

In short, respondents in this study generally agree that on the whole, retail financial services firms don't have a strong marketing orientation, and haven't made much progress in tackling key marketing challenges like becoming consumer-led and building strong consumer brands.

Many, though, work for firms that have been consistently successful, and so help to substantiate our hypothesis that hitherto, good marketing simply hasn't been essential. If, for all the reasons we put forward in previous chapters, marketing is going to be a far more important component of future success in retail financial services, things are going to have to change.

THE NEW FINANCIAL SERVICES MARKETING

The second part of this book is made up of 12 chapters, each dealing with a key theme that we believe will characterise the new financial services marketing. We introduce each one with a question – a challenging question, asking how much progress in each area you, your team and your organisation have made.

But in providing a brief introduction to the 12 themes, there's one confession we need to make.

It would be nice if most of our themes, or maybe even all of them, came as huge surprises. We'd love it if every chapter heading raised startled eyebrows. But it isn't going to be like that. Few of our themes will be massively unexpected or unfamiliar to anyone with any current level of involvement in marketing, whether in financial services or elsewhere. Some, indeed, are often claimed to be deeply embedded in many firms already. Are we really saying, for example, that there's anything forward-looking or mould-breaking about a commitment to ‘put customers at the heart of the business’? It's hard to think of a more clichéd expression. Or similarly, in the very first of our 12 chapters, we discuss the importance of corporate purpose – the need for organisations to be able to express a clear raison d'être above and beyond making money for their shareholders. We can hardly claim that's new, either.¹

At least, talking about it isn't new. Claiming to have defined a corporate purpose, or for that matter to have made great efforts to put customers at the heart of the business, isn't new at all. We're now several years into a period in which senior managers in many firms – and not just in marketing departments – recognise that it would be kind of embarrassing not to make statements like these. These days, it would be a brave company that proudly claimed to take an entirely product-led approach, and to define its purpose exclusively in terms of the return on capital it provides to shareholders.

But of course talking and claiming are one thing (or maybe two things). Doing is quite another. At the moment, in financial services, we're in a curious kind of limbo – a halfway house where many firms publicly espouse many of the practices that go to make up good marketing, but few actually practise them.

(Actually, as we'll see in a moment, some of these practices are more espoused that others, but the general point stands.)

What are we to make of this state of affairs? An optimist would say that we're already halfway to our goal. If senior financial services people with backgrounds in accounting, actuarial, compliance, IT, risk, operations and all the rest of it are happily spouting the jargon of ‘customers’, ‘purpose’, ‘mission’, ‘brand’ and so forth, then the fact that their words currently lack substance is just the next issue to tackle.

A pessimist, on the other hand, would say that this has all gone horribly and maybe even irretrievably wrong. Non-marketers spouting marketing jargon have made the classic mistake of assuming that it's all just pink fluffiness, and if it goes down well with the media and the analysts there's no real harm done, provided that no-one actually has to change anything. Certainly the next chapter, which looks at corporate purpose, finds some fairly startling disconnects between some organisations' claimed purpose and some of their actual behaviours: it certainly doesn't look as if it has occurred to a lot of people that if the stated purpose is to be achieved, some sort of effort will be required.

For our part, at risk of sounding boringly balanced about this, we feel sure that the answer lies somewhere halfway in between. There are undoubtedly a depressingly large number of deeply cynical organisations, and deeply cynical senior people within them, who are comfortable enough talking the marketing talk, but have no intention of taking even baby steps towards it.

On the other hand, there's a refreshingly and even inspiringly large number of committed idealists hugely committed to doing the right thing by the consumer, and these committed idealists aren't always the people you'd expect. At a conference recently, one of your authors sat next to a young and very idealistic delegate attending her first such event. She admitted she'd been dreading a series of dull and reactionary presentations by the speakers, all middle-aged men in suits. In fact, as chance would have it, this particular group of besuited middle-aged men all expressed far more radical and progressive points of view than the young delegate had expected. She left the event buzzing with enthusiasm for the industry.

Anyway, the point we're making is that the current phony war – the situation in which many organisations are paying lip-service to many of the big ideas in the new financial services marketing, but few are doing anything much to put them into practice – makes the next part of this book a bit tricky to write. We'll do our best to highlight the differences between pointless posturing, and the real thing.

The following chapters discuss these themes:

1. How does your firm define its purpose? We must admit that we're not massively convinced by the many modern business and management theorists who say that consumers are unwilling to engage with brands unless they see a clear sense of purpose that has meaning for them. Some consumers and some brands, maybe. But we're much more convinced that a clearly expressed over-arching purpose can play an important part internally, in recruiting, retaining and motivating people. And even more convinced that it can direct and guide marketing activity, in ways that hugely affect an organisation's ability to build and maintain a clearly differentiated position in the marketplace.

   Purpose doesn't mean much if it doesn't come from the top. When it's expressed in an empty slogan produced by the marketing team, or one of its external agencies, everyone knows it doesn't mean anything.

2. Do you have a strong and distinctive culture? Culture is a fairly close relative of purpose, but it's a bigger and broader thing that characterises the particular way that an organisation, and its people, go about doing the things they do. It's an idea that, mainly because of the regulator's focus on it, has definitely made a journey from the HR and marketing departments to the boardroom: C-suite executives may still be fairly unclear on the subject about what it is, but these days they all know that they're responsible for it.

   Our chapter makes some points about the importance of distinctiveness when it comes to culture. It seems to us that this is a dimension that can easily be overlooked even in good organisations that care a lot about their customers, and are concerned to meet their needs as best as they can. Marketers, we think, have a particular responsibility for the interface between brand and service that is central to the customer experience: does everyone in your organisation really understand how your way of doing things is supposed to be not just good, but different?

3. How much is Big Data changing the way you do business? Being halfway through a revolution is an awkward place to be. Most marketers now believe we're on the way to a future where data will be big enough, powerful enough and low enough in cost that we really will be able to run our businesses in customer-centric ways and achieve that ‘one-to-one future’ that Peppers and Rogers first told us about well over 20 years ago. To do so, we'll pretty much literally need to turn our businesses upside down and inside out.

   But only a very small handful of firms have completed this journey, and many – especially bigger, older and more complicated ones – still have a long way to go. Continuously evolving a marketing approach to keep pace with a firm's data capabilities is far from easy: it's tough enough being half-pregnant, but even harder to be in that condition for what may well be decades.

4. Do you get the real power of Behavioural Economics? That may sound like a strange or even naïve question. Some very good marketing people – especially those with direct marketing backgrounds – have a distinctly Emperor's New Clothes attitude toward BE, saying that there's very little in it that a direct marketing guru like Drayton Bird wasn't doing 40 years ago.

   At one level that's largely true, but it's completely missing the point. When Drayton said you should put a red flash on the envelope stating ‘Respond Before 18th June!’ it was just a direct marketing bloke saying so. When Daniel Kahneman says it, it's a Nobel laureate.²

   Bear in mind the well-established principle that it's not what you say, it's who you are when you're saying it that matters, and you'll realise that the behavioural economist is, potentially at least, the very best friend of the marketing department. Read David Halpern's account of his triumphant presentation to the assembled Permanent Secretaries of most of Whitehall's departments, and just imagine the kinds of budgets he could unlock if you could get him in to present to your Board.³

5. Are you any good at innovation? We think this is probably one of the book's more useful chapters, intended as a pocket guide to successful innovation, and also no less importantly as a pocket guide to avoiding unsuccessful innovation.

   It's very big on ease and simplicity, saying that the trouble with a great deal of financial services innovation is that the people responsible are far too interested in financial services and assume too much enthusiasm and stamina on the part of their target markets. It's difficult to think of any products or services that have failed because they were too simple. It's very easy to think of a great many that have failed because they were too complicated.

6. Are you really trying to ‘rebuild consumer trust’? It's not easy to say which is the most controversial proposition in this generally controversial chapter: that the loss of consumer trust in financial services is a good thing, that it would be impossibly difficult and expensive to get it back or that we can manage perfectly well without it.

   In any event, we go on to argue that the real challenge for marketers is not ‘rebuilding trust’, but the much more achievable and subtle art of ‘managing distrust’ – finding ways to engage with consumers, build relationships with them and deliver products and services that meet their needs, while recognising the fact that we'll probably never overcome their deep suspicions and one false move at any moment can lose them forever.

7. Call that a brand? As we reported earlier in this chapter, just over half the respondents (52%) in our Financial Services Forum member research believe their organisations have strong brands. We say that unless by coincidence they all work for First Direct, Hargreaves Lansdown and a handful of others, that seems unlikely.

   Anyway, for the benefit of the other 48%, we have a lot to say about the value and importance of brands, and some refreshingly straightforward and bullshit-free things to say about how you build them.

   And we also pay a lot of attention to an idea that comes up in several other places too: brand, like so many other parts of the marketing agenda, is so incredibly much easier to manage in small, young, simple organisations than in big, old, complicated ones. (Actually, we go a bit further than this and say that in big, old, complicated organisations developing a strong, single master brand is probably impossible.)

8. Whatever it is, can you make it simpler? In this short chapter, we make an appropriately simple point: that if the new financial services marketing is going to mean anything to consumers, we're going to have to keep it very, very simple. This admittedly overlaps with a key theme from our Innovation chapter (above), but it's a sufficiently important message that it's well worth saying at least twice.

   Most of us aren't used to this. Many marketers trying to adapt to the new digitally oriented, consumer-facing world after careers spent targeting intermediaries, business markets and the small niche of highly engaged hobbyists have no real understanding of just how simple their efforts have to be. This isn't just a question of communication. Often it's the underlying concepts that have to be simplified, not just the words used to express them.

   Rule of thumb: if you think you've now made it simple enough, you're probably halfway there.

9. Are you just a little bit boring? If there's one Achilles heel that most financial services marketers already recognise, it's the issue that we label in our jargon as ‘engagement’, a rather odd word little used in real life that means something like ‘capturing and keeping people's attention’. There are many words that could be said to be the opposite of engagement – confusion, anxiety, lack of interest, impatience, distrust and, perhaps most often, plain and simple boredom.

   In a chapter about as short as the previous one, but similarly heartfelt, we make a plea for financial services marketers to be less boring. People don't find money boring, but they do find us boring – almost all of us, and almost always. This is hopeless. Our new financial services marketing can't achieve anything at all if it can't capture and keep people's attention. Doing so is quite literally the first and most crucial challenge that we face.

10. Does planning your marcomms seem horribly complicated? As the punchline to the old joke (one of Woody Allen's, as we recall) would have it, only when you're doing it right. At the time of writing, out there in financial services marketing land the themes in these twelve chapters are at different stages of development, and this is already one of the furthest advanced: it's a long time since the days when the marketing communications mix for a financial services firm consisted of a TV awareness campaign, some product direct-mail packs, a suite of brochures and some trade press ads.

    As we recall, even orchestrating and integrating that little list wasn't easy, and the list is several times longer today. This chapter reviews the main components, with varying degrees of enthusiasm. (It's probably at its most sceptical on the subject of content marketing, which, it says, as currently practised, is a way of wasting remarkable quantities of time, effort and money.)

11. Yes, but can you prove it's working? Another chapter making a simple, single, central point: we still need to get a whole lot better at measuring the effects of what we do.

    At the moment, a few firms take measurement very seriously, quite a few dabble and many do little or nothing except capturing some irrelevant-but-free internet analytics. This is a situation that's symptomatic of the current status of marketing: if it isn't very important and doesn't have much effect on the business, it doesn't really matter if we measure it or not. But if marketing is now becoming very much more important, then by definition so is measurement.

    It's important for two reasons: to guide the direction of future spending and activity, but also to substantiate the role and value of the function to colleagues across the business. Colouring-in departments don't really have much use for measurement. Marketing departments do.⁴

12. Given the choice, wouldn't you prefer a Sky subscription? In this last chapter, we take a step back from the financial services world to recognise the broader context in which consumers lead their lives and make their decisions. Understanding this context better must be another hallmark of the new financial services marketing: for as long as we continue to make arrogant and self-serving assumptions like, for example, that in some kind of ill-defined objective way it's actually better to buy life assurance than a Sky TV subscription, we'll never really get close enough to our customers.

    And as a final thought, the superficially simple task of getting close enough to our customers is really what the new financial services marketing is all about.

That's the short version of what you're in for over the next couple of hundred pages. Here comes the long version.