What is financial marketing?
Financial marketing can be defined as the set of marketing techniques and strategies used by financial institutions to improve communication with customers and the sale of their products.
Financial institutions that can benefit from financial marketing strategies besides from banks, include investment companies, brokerage firms, insurance companies, and mortgage companies.
This branch of marketing deals with:
- The study and positioning of financial institutions.
- The image of these entities.
- The determination of prices.
- The design of distribution channels.
- Advertising campaigns.
- The promotion of the products and services they offer.
Therefore, a good financial marketing plan must take into account all these issues and design a marketing strategy that enables the company to achieve its objectives as well as to understand the needs of its customers in order to offer financial products and services in accordance with these needs.
Effective financial marketing strategies
Depending on the needs of the environment and in accordance with the characteristics of competing banks and other financial institutions, financial entities can develop the following strategies:
Cost-based strategies
In this financial marketing strategy, the aim is to have the lowest possible costs.
The goal is to charge different categories of customers differently, depending on the level of use of the services.
Differentiation strategies
Differentiation strategies seek to improve the brand image, trying to offer an image of quality.
New technologies are a great opportunity to improve the quality of financial products and services, making it possible to broaden the financial offer and the markets in which the different institutions can operate.
Segmentation strategies
This type of financial strategy aims to adapt financial products to each segment, in other words, to a group of customers with common characteristics.
What are the functions of financial marketing?
Through financial services marketing, a financial institution can learn about its customers’ problems and find appropriate solutions tailored to their needs. If not, they will be offered by the competition.
The aim of financial marketing is to achieve a stable, long-lasting and profitable relationship with each customer.
What are the benefits of this type of relationship?
- A positive brand image is achieved among the general public and customers in particular.
- It stimulates the development of new products and services. It always seeks to provide solutions to new needs.
- Profit is maximised by creating increasingly profitable relationships.
- It is ahead of the competition. Financial marketing allows financial institutions to remain competitive in a highly complicated market.
Financial marketing plan: what factors should you take into account?
All marketing plans follow the same principles and are developed in the same way. The only difference is that it is linked to the specific characteristics of the financial or banking sector.
What should a financial marketing plan contain?
Analysis of the financial situation in the market
A financial marketing plan must be based on a study that enables the situation of the financial institution and its positioning in the market to be assessed in relation to the competition in order to draw up an effective strategy.
The analysis will have a twofold objective:
- Internal: by carrying out a study on the target public, brand image, market positioning, available and necessary resources.
- External: by carrying out a study on the current situation of the sector and the competition.
Setting objectives
One of the most important steps in the financial marketing plan is to determine the short, medium and long-term goals, which must be in line with the business objectives of the financial institution.
These objectives should be measurable, achievable, specific and time-bound.
Objectives should be set with a greater emphasis on one or the other depending on the company’s priorities.
Creating the financial marketing strategy
With the objectives of the financial marketing plan in place, the next step is to determine the strategy.
The actions to be taken, for example, will not be the same for a financial institution that is trying to enter the market as for one that is trying to diversify or launch a new product.
The financial marketing strategy should include the following points:
- Pricing based on cost analysis and the objectives being pursued.
- Developing products that solve customer problems.
- Determining the distribution channels to deliver products to customers.
- Designing the communication system with customers, including advertising campaigns and promotions.
Determining the financial marketing actions
Once the strategy has been defined, it is necessary to specify the specific actions to be taken to carry it out.
Here, you need to define the tasks, the people in charge and the deadlines for implementation.
Setting control and monitoring indicators
Any financial services marketing plan must have performance indicators that allow you to analyse its evolution and effectiveness or to correct certain actions if necessary.
These indicators will ensure that the objectives are being met and allow corrections to be made to the strategy.
In short, financial marketing is not just a part of a financial institution’s business plan. It is the tool that will allow you to gain market share in a highly competitive sector.
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