Tag: Financial Services
With the long-term effects to the economy unknown, many consumers are feeling the financial impact, while others are looking for opportunities, resulting in a transformational shift in spending. Some brands are experiencing decreased or paused marketing budgets, and you may be trepidatious about making the right decisions in your efforts to grow share of wallet. Recent events have been an impetus for change and we’re seeing brands make modifications to traditional marketing strategies. Some are developing innovative technologies and utilizing new sources of data and analytics. As we look at how these changes impact marketing results, we see the gap grow between those brands who are equipped to pivot and implement new strategies quickly, versus those who are not. So what steps can your organization implement now to make the smartest choices for both your customers and your business to secure more share of wallet? Here are four ideas to accelerate the success of your next financial marketing campaign: 1. Meet your customers wherever they are: Digital-first strategies have never been more relevant than they are right now. While consumers have fully embraced online engagement, marketers are even more focused on reaching high-value segments in the channels they utilize. By using an informed, data-driven strategy that includes preferred marketing communication channels and decision-making styles, engagement increases across those channels your target audience frequents the most. For example, are they heavy social media users? Do they prefer streaming TV? Or do they tend to rely on financial advice vs. performing their own research? To drive take rates, your audience must be exposed to a tailored message, in the right channel, and possibly multiple times. 2. Use messaging that resonates: As consumers refocus priorities, their expectations of brands with whom they do business are ever-increasing. Reflecting an understanding of the current needs and interests of your customers and prospects is an undertone that can only help strengthen their view of your brand. Consumer behavior has changed and is unlikely to revert to what was, so you want to be relevant, but you also do not want to be seen as ‘tone deaf’. As a result, consider revising your segmentation strategy to leverage predictive insights, such as household economic indicators, financial behaviors, lifestyle propensities and interests to help shape your message into one that truly makes an impact. 3. Prove the worth of your campaign: New consumer journeys are being formulated and showing ROI is imperative as your marketing budget is scrutinized. Having the right industry-relevant metrics and reports to analyze and share with leadership are key. Demonstrate that your campaigns are contributing to bottom-line success—and justify future campaigns—by using data-driven measurement insights collected across multiple reads and countless touchpoints. Marketing budgets are being scrutinized now more than ever, so showing ROI is critical. Having the right metrics and reports to analyze and share with leadership are key. 4. Follow government regulations—leverage Fair Lending-friendly audiences: Whether you’re cross-selling or prospecting, now is the time to identify the right audiences with rich data insights to not only execute impactful campaigns but adhere to government regulations that protect consumers and your organization. Trusting that the data you are activating follows Fair Lending Laws, including the Equal Credit Opportunity Act (“ECOA”) and the Fair Housing Act (“FHA”) is crucial. The Federal ECOA prohibits creditors from discriminating against credit applicants on the basis of several prohibited factors. Developing people-based segments that are not derived using these factors positions you to follow these regulations. Check out our previous blog post about Fair Lending-friendly audiences here. As you transition to new operating models, access to current and accurate consumer data can provide confidence in campaign potential, help you avoid business risk, enable you to respond to market changes and make better decisions. Experian can help you implement these strategies and put your brand unique position for growth. From start to finish, we provide the marketing solutions you need to plan, build and execute successful, Fair Lending-friendly campaigns to cross-sell to existing customers and acquire new customers. Learn more about Experian’s financial services marketing solutions here. *Experian Fair Lending-friendly audiences do not constitute legal advice or otherwise assure compliance with the FHA, ECOA, or any other applicable laws. It’s recommended to seek legal advice with respect to the use of data in connection with lending decisions or application and compliance with applicable laws.
Major financial institutions such as American Express, Bank of America, Chase and Citi offer credit cards to hundreds of millions of consumers in the U.S. alone. However, the work doesn’t stop once a customer opens up an account. Millennials have an average of 2.5 credit cards each, and Baby Boomers average 3.5 each. With an average of three cards to pick against (Bycer, 2020)i, these institutions need to find ways to incentivize customers to use their card offerings. Rewards programs have become the most attractive mechanism to promote loyalty but how can credit card issuers maximize their share of wallet in this wave of consumerism? Currently, financial institutions acquire new customers using traditional digital marketing modeling techniques. This can be very effective, but what about the increasing capture of data from customer interactions with all of the stores and brands they come into contact with each day? Each and every touchpoint in customers’ journey creates a wealth of information including search and purchase patterns, as well as which stores and brands they support. In the past, traditional reporting on these data sources could only provide a look back at what happened. However, the incorporation of analytics will unlock not only what happened, but also why and what to do as a result. These actionable insights can guide savvy financial institutions to strategically create the right incentives and rewards programs for their customers and promote brand loyalty for themselves. Leveraging multidimensional data sources and experimentation models, financial institutions can make informed decisions about the right channels to best reach their customers and the evaluation of merchant partnerships. The availability of rapid iterations can enable the right offering for each customer much quicker while minimizing the risks posed under conventional annual planning models. The challenge then becomes how these activities are measured. Today’s consumers are interacting with brands through a multitude of touchpoints, from their websites and mobile apps to physical in-store visits. Despite the increase in digital interactions that consumers have with brands, this is only a part of the equation. Gaining a full understanding of the customer, and their interests, it requires connecting their digital and offline identities. Using machine-learning algorithms and advanced data analytics, financial institutions can connect the disparate data sources to determine which customers are interacting with brands online and in-store. Furthering the availability to understand the interplay of customers’ digital and offline interactions is the ability to create seamless experiences on mobile apps that merge the two. For example, customers may make an in-app purchase, and then pick-up their order in-store. By keeping customers engaged within the app, brands can see how customers interact with the brand throughout the entire purchasing process. One of the key goals for any brand is to identify high yield customers. But simply identifying these customers isn’t enough for a brand’s success. Identifying high yield customers, combined with an understanding of where and how often they visit stores will move the needle. This creates a path to optimal marketing campaigns for rewards and loyalty programs through the appropriate delivery channels. These insights, cross-referenced against a brand’s foot traffic and social trends, are what will give businesses the greatest potential to reach their target customers in a way that truly resonates. A total of eighty-one percent of consumers agree loyalty programs make them more likely to continue doing business with a brand (Autry, 2017)ii. If brands and financial institutions can pinpoint which loyalty programs will meet consumers’ needs, they’ll be gaining not only customers but brand loyalty as well. Sources: i https://www.forbes.com/advisor/credit-cards/best-credit-cards/ ii https://blog.accessdevelopment.com/customer-loyalty-statistics-2017-edition
When looking at who to target as potential customers, financial institutions will usually rely on general segments such as younger borrowers, active checking account users, prime credit, middle income and homeowners. However, in today’s data-focused and customer-driven world, these broad segments no longer cut it. Consumers expect highly tailored advertisements made specifically for them, and they will not pay attention to these ads that are too general or too broad. This, in turn, makes these general segments obsolete and ineffective at bringing in new consumers. In order to compete, marketers must adapt and understand who they are reaching on a much deeper level. Broad categorizations of consumers do not reveal the ideal customer, leading to wasteful spending and ineffective marketing campaigns. They must break down the consumer to their core and segment them into groups based on various factors, including geography, demographics, financials, behavior psychographics and social values. Experian’s Mosaic® does just that, classifying all U.S. households and neighborhoods into dozens of unique types and overarching groups. This groundbreaking platform provides a full view of the consumer beyond the outdated broad categories. It gives marketers a look into their personal lifestyle, giving them a glimpse at the nuanced differences that drive their purchasing decisions. Take “homeowners” as an example. Most banks, credit unions and lenders would list “homeowners” as desired members. However, as Mosaic shows, the group of “homeowners” is not as clear cut as its title suggests. America has many types of homeowners with different spending patterns, social values and geographic considerations. The “Bourgeois Melting Pot” are middle-aged, blue-collar workers living in Suburban neighborhoods across the West and the Northeast. Most have high school diplomas and college experience, but few actually received a degree from a higher education institution. They shop at well-known department stores and rarely purchase products from the Internet. At this point in their lives, most are empty nesters. Perhaps most importantly, they are responsive to TV advertisements and still rely on television as their primary source of information and entertainment. Compare that with “Flourishing Families.” Almost all these married couples are in their 30s and 40s attended college and hold lucrative white-collar jobs. They are scattered across the suburbs of big cities like New York and San Francisco, with most raising children between the ages of pre-school and post-graduate. These families have the money to spend on name brands, but are looking for bargains at major retail stores as well. They are average fans of TV and do most of their shopping and newsgathering on the Internet. Both these Mosaic types are considered “homeowners,” but their lifestyles could not be more different. One group settles down in big cities; the other is not afraid to venture further into the suburbs. One holds predominantly blue-collar jobs; the other enters the fields of law, public policy and science. One is heavily invested in TV; the other relies almost entirely on the Internet. These are significant differences impacting each type’s (specific or unique) loan needs, lifestyle priorities and preferences for engaging with a marketing offer. The same marketing strategies and loan offers will not fit each group’s preferences. Mosaic helps inform financial institutions of these differences so they can adjust their campaigns based on each group’s preferences. This is why segmentation is so important and why Mosaic is an essential tool for any successful marketer. With competition coming from FinTech companies including Avant and SoFi, financial institutions must take any advantage they can to stand out from the rest of this crowded industry. They are already relying on data analytics and consumer segmentation to reach and engage a well-defined, ideal consumer. It’s time you do as well. If you don’t win your ideal member, somebody else will.
In today’s consumer lending environment, financial services institutions are seeing increasingly intense competition during a favorable economic climate. For example, it is common for many lenders to have similar credit approval criteria such that the same consumer may receive multiple pre-approved solicitations for credit from different lenders. Mintel Comperemedia estimated that 391 million direct mail pieces soliciting a credit card were sent to US consumers in November 2018, an increase of over 32% from June of that year. However, during that same period, credit card applications declined 21% (Streeter, 2019). With this increasingly competitive environment, it is critical that financial institutions find ways to reach an emerging group of consumers that have a need for access to credit, but do not have established credit history and are not typically found using standard prescreen criteria. In an Invitation to Apply (or “ITA”) campaign, consumers are targeted using relevant selection techniques and sent a communication encouraging them to apply for a specific lending product. There is no obligation for the institution to extend credit; the consumer completes a credit application, and the financial institution reviews the credit of the consumer to determine whether they meet the lender’s threshold for approval. The benefit of reaching these emerging consumers is significant, as the lender can establish a new consumer relationship, generate new sources of fee income, grow balances and extend other lending products as the consumer moves through different life stages. There are several challenges for a financial institution to succeed in this space: Leveraging data to identify a targeted audience. In a heavily regulated environment, identifying data elements and attributes that are both compliant and predictive can be difficult. Achieving approval rates to justify marketing costs. In the ITA environment, response rates may be higher than similar prescreen campaigns because the communication is reaching a consumer not actively pursued through prescreen campaigns but could be offset by a lower approval rate since the consumer may not meet the campaign’s criteria. Choosing the right marketing channel. In the past, financial institutions relied heavily on direct mail marketing, where the individual receiving the communication has a high likelihood of reaching the specific individual. However, in a multi-channel world where consumers increasingly prefer online or digital communication, communicating effectively to the right consumer through the preferred channel at the right time requires profiling with unique data sources. Experian has helped lenders overcome these many challenges. Through our deep industry expertise, rigorous analytical process, advanced model development techniques, and unique data assets, we have helped industry-leading brands achieve successful ITA campaigns by focusing on these areas throughout the end-to-end engagement process. Develop two-stage predictive models to predict response and approval. Ultimately, lenders are trying to attract new applicants that have the likelihood of being approved. Look-alike models have historically been developed by taking a sample of current customers and using statistical modeling to identify a set of prospects that look like those consumers. However, this may skew the audiences towards a set of consumers that have previously been selected and reached by many lenders. Developing a look-alike model that identifies individuals to respond to an application may generate a target audience more likely to apply, but not necessarily be approved. Experian recommends using a two-stage model, where we develop a consumer’s propensity to respond, and their propensity to be approved given a response. Then, both models are used together to identify those consumers more likely to respond AND be approved. The figure at the right shows how Experian applies these models. In this example, response model tiers A-C, and approval model tiers A-F were used to create the target audience for the ITA campaign and generated higher response and a 10% increase in approval rate for the campaign. Reach your consumer with the most effective communication. In the current multi-channel marketing environment, consumers have definite preferences on how they obtain information and their decision-making styles. Financial Services consumers are no different. During 2018, 50% of all credit card solicitations were made digitally, and 73% of applications were received digitally (Streeter, 2019). Knowing the preferred media channel for engagement, and the decision-making styles of your ideal consumers, can greatly improve your marketing effectiveness. Experian profiles your target consumers using TrueTouchSM to determine the following: Consumer engagement channels. TrueTouchSM Engagement Channels attribute your audience’s preferred communication channels (e.g., direct mail, email, mobile display, etc.) to help build a cross-channel strategy and improve advertising placement. This helps you reach consumers in channels where they are personally more receptive to learn about brands, to build brand reputation and foster and customer relationships. Consumer decision making styles. TrueTouchSM Decision Making Styles are 10 unique personas with different communication references that help identify the optimal motivational messaging style for your audience. This informs and validates your message development to make highly personalized offers that stimulate interest in your products and services and deliver profitable responses. ITA campaigns can successfully enable portfolio growth from emerging consumers through proactive and strategic targeting, but only if it overcomes some of the challenges unique to this space. By employing processes as we have outlined, you’ll know what data assets are used for identifying consumers, and you can use data and predictive modeling techniques to create a targeted audience that is optimized both on likelihood to respond and likelihood to be approved, to satisfy your cost per enrollment criteria. Finally, you can determine what engagement channel and decision-making style your targeted consumers prefer so that you can communicate the right offer to the right consumer in the right media channel. Source: https://thefinancialbrand.com/80322/credit-card-marketing-trends/
It’s no longer an option for brands to understand their audiences. Given the advances in ad tech over the past few years, any brand who wants to thrive in today’s economy understands that there is an expectation among consumers that all communications they receive are relevant and customized to them. This holds true for all advertisers, including financial institutions. Sending irrelevant loan offers or other products can cause frustration and detachment. Financial marketers, like all marketers, have to be able reach the right customers, at the right time, on the right device, with the right messaging. The challenge facing the financial industry today is how can they continue to provide customized advertising to potential clients while also respecting anti-discriminatory regulations? There are a number of government regulations, including the Fair Housing Act (FHA) and The Equal Credit Opportunity Act (ECOA), which are designed to protect consumers from discriminatory marketing practices. As a result, financial marketers need to ensure the demographic information they use to better understand their target audiences and inform their campaigns is not seen, abused or used in an unfair manner. For most third-party data companies, building audiences that exclude regulatory definitions of discriminatory can be challenging. These audiences tend to be so broad and thus ineffective in targeting the right future customer. Experian has the solution with our Fair Lending Act (FLA) friendly audiences. Given our expertise in both financial regulations and consumer data, putting together highly effective FLA friendly audiences was a no-brainer. To help you reach the right audience, Experian leverages its full ConsumerViewSM file that has information on over 300 million consumers in the US. With information on who they are, how to reach them, and what they do, the ConsumerView file goes beyond basic demographic information, enabling Experian to help financial marketers send customized advertising that is also FLA friendly. As a leader in the financial space for more than 100 years, Experian understands the importance of compliance and that clients want to feel confident that the audiences they have access to are not created through a biased or inappropriate process. Experian will work with both its data partners and its clients to provide transparency on what goes into Fair Lending Act friendly audiences.* Marketers can feel confident knowing that our FLA friendly audience data was built with regulatory compliance in mind. Getting the right audience in place is one of the quickest ways to get the sale and increase lifetime customers. However, there are many variables that need to be considered, including seasons and holidays, brand alignment, and compliance. One of the ways to take some of the pressure off is to work with audience data that is already FLA friendly. Learn more about Experian Audiences here, or contact us today at audiences@experian.com to get started and request FLA friendly audiences for your campaigns. *Experian FLA audiences do not constitute legal advice or otherwise assure compliance with the FHA, ECOA, or any other applicable laws. It’s recommended to seek legal advice with respect to the use of data in connection with lending decisions or application and compliance with applicable laws.
There are more choices than ever when it comes to banking and lending. In fact, according to the FDIC, there are nearly 5,000 banks in the United States and more than 5,000 credit unions. This complex landscape has made it harder for institutions to be competitive and retain members. Credit unions need to ensure members know that they are valued and that their needs are being met. Scenario #1: A young couple is planning to move into a new home. This couple happens to be searching for potential houses and condominiums in the community where a credit union is located. With data-driven marketing, a credit union can get access to a New Mover list to target this duo and make them an offer for a personal loan, letting them know that their big move isn’t a pipe dream, and that they are a new welcome member of the community. Data-driven marketing is a process by which strategies are built on insights pulled from the analysis of member interactions and engagements to form predictions about future behaviors. It has become a necessary tactic for credit unions to pursue. Credit unions have access to a plethora of information about consumers. They have the transactional data that members provide when they open accounts and apply for various loans and products. This first-party data is a great place to start. Then credit unions can then layer on third-party data from a trusted resource such as Experian to fill in the gaps. Together, the data will give credit unions a more holistic understanding of their member’s needs, wants, lifestyle and what motivates them. Scenario #2: Grandparents who are part of the local community are looking to potentially open a certificate of deposit as a gift for their grandchildren. Credit unions in the area can apply data-driven marketing to run a targeted campaign focused on potential members who might have grandchildren and provide them a targeted invitation to apply for a certificate of deposit. This would provide grandparents with an opportunity to provide a wonderful gift for their growing family. As you can see, by using data-driven marketing, credit unions will know what approach to take when targeting both existing and potential members. By leveraging the vital information that data-driven marketing provides, credit unions can strategically plan their marketing campaigns, better service distribution channels and acquire new members while keeping the existing ones. This type of marketing will bring personalized messaging down to an individual member level. Credit unions will be able to better market relevant offers to potential members who are looking to buy a new house or open a certificate of deposit for their family. Analytics in some cases can even predict the future; credit unions can now know when a member is ready to take out a loan for things such as college tuition, home improvement or a vacation. Get more out of existing data Experian’s Customer Data Engine can help credit unions securely managing first and third-party data, create a single view of customers, better target customers, manage marketing campaigns, and measure campaign effectiveness. Leveraging the right tools and data can help credit unions make better decisions to reach both customers and prospects more effectively and ensure they set themselves apart from the ever-growing competition. Up your deposit game Experian’s Deposits offering powered by ConsumerView® can help community-based financial institutions compete in the data-driven landscape and stretch their resources further. Winning deposits in the face of extreme odds means relying on the strategic application of your data. Depth of insight and rich coverage is crucial to your institution’s future, helping you define your most ideal prospects and customize a message that will resonate with them. Community banks and credit unions are indispensable members of their local community. Their firsthand knowledge of the community allows them to customize financial products for their customers, create local jobs, and reinvest in the local community. Experian’s solutions can help them grow and become more effective in the changing financial services landscape.
For decades, financial institutions relied on direct mail marketing and mass media for credit card offers and invitations to apply (ITA) for loans. Today however, credit marketing is going digital. In fact, according to Statista, financial services ranks 3rd in total digital ad spend this year. Lenders need to deliver relevant credit offers to consumers in the spaces and platforms where they interact. Below are three best practices to help financial services marketers make the most of their digital budgets and strategies. 1. Test new acquisition channels Consumers are no longer just in one place. They are constantly moving around and business strategies need to encompass that. Today’s consumers have multiple devices – a mobile phone, a TV, a laptop, a smartwatch, etc. and each of these devices uses a different tactic to attract consumers. Marketers need to reach their audience across all the channels with which they are engaging. To maximize performance and profitability, lenders need to leverage multiple channels to target and re-target their intended audience. They need to expand the reach of tailored prescreen ad campaigns by adding email, digital display ads, or other online channels to the traditional direct mail channel. This will help increase response rates, decrease length of time to conversation, and provide insight on consumer behaviors and preferences that cannot be achieved with a direct mail offer alone. 2. Target an audience that is right for you. Through a streamlined credit criteria selection process, and Experian’s expertise in audience creation, you now have the power to target the best consumers for your business needs in a fully customized approach. Financial services marketers should isolate appropriate populations – enabling you to make unique offers for different consumer segments and target them in the channels they leverage. In addition, you need to ensure your data is accurate and compliant. Fresh, accurate data enables you to pre-select the best prospects for your business need—right when they are most motivated to respond—and avoid making preapproved offers to nonqualified consumers. Also critical is that while we are able to use regulated data sets to reach consumers, we need to do so with extra caution while meeting FCRA guidelines. It is imperative to honor consumer opt-outs across all channels and ensure you have audit rights with media publishers. The Experian Ascend Technology Platform gives financial institutions the power to integrate client data, industry-specific data feeds and the power of Experian’s unique capabilities in data, analytics, machine learning and advanced AI to deliver enhanced opportunities throughout the customer lifecycle, including lending offers to acquire new customers and cross-sell to existing ones. 3. Test and adjust your campaigns Before the world of digital, it was difficult for financial institutions to track campaign impact on audiences. By employing online promotions, lenders can see how much interaction consumers are having with their promotional media. Financial services marketers should take processes and campaigns that have worked in the past and perform small, iterative tests using different channels. We believe that by adding a digital touch to a client's direct mail prescreen campaign, there is the potential to experience a lift above direct mail response rates; decreased length of time to conversion, and we can provide insight on consumer behaviors and preferences that cannot be achieved with a direct mail offer alone. It is important to test and optimize accordingly. Experian is also at the forefront of the digital credit revolution with Amplified Prospecting™. Experian’s Amplified Prospecting empowers lenders to deliver relevant firm offers of credit to prescreened consumers via multiple digital channels, including email, online display advertising and social media. Simply put, it allows you to timely engage the most desirable consumers where they’re increasingly consuming information and media today – improving your response rates and return on marketing investment. Experian is a leader in the credit revolution, offering more ways for consumers to secure credit including the industry-first Text for Credit™, which allows users to initiate and complete the credit application process within minutes with a simple text message. In addition, Experian recently introduced Experian Boost, a revolutionary new online tool that can instantly improve your credit scores and help the 100 million Americans that don't have access to credit today, either because their credit scores are too low, or because they don't have enough credit history. With faster, more efficient data integration and processing you can more accurately target leads, achieve better response rates, and optimize your marketing spend. To learn more about Experian’s Financial Services solutions, contact us at (877) 902-4849 or experianmarketingsolutions@experian.com to learn more!
Brian Hovis of Citi talks Financial Services marketing challenges – all require data, organizational shifts and strong technology to solve.