The near future, and not-so-distant past may look bleak to consumers: RRSP season is on our heels, and this month the loonie briefly sunk to the lowest value it’s been in 13 years. The stock markets and the price of oil are following the same trend. The current market slump, coupled with the fact that Canada technically entered a recession in 2015, feels like Deja Vu to consumers.
After almost a decade of prosperity, the global crisis coined as The Great Recession of 2008 bottomed out the market and chipped away at a lifetime of saving for many Canadians. The monetary losses took years to recover, but there has been a long lasting shift in how Canadians view spending and investing.
Consumer behavior changed significantly after the 2008 global recession. For many, it rebooted their risk tolerance for investment. Consumers had never been through an economic crisis of The Great Recession’s size, nor had they thought it would happen. Now, consumers are both, aware, and wary of risk. They research brands and they expect proof of results early in their path to purchase. Their financial service providers are no exception. Research indicates that there is a “trust deficit” with regards to financial services, revealing that “around half of Canadian consumers believe that financial services companies take their customers for granted, are more interested in rewarding loyalty from wealthier customers and tend to offer better deals to their new customers”*. Our research also reveals that consumers are uncertain about the market and their future:
- 19% of Canadians aged over 55 have postponed their retirement due to economic uncertainty*
- Almost half of non-retired Canadians (46%) are worried about how they will live and how they will pay for health care costs when they get older*
- Two in five non-retired Canadians over the age of 55 rate independent financial advisors as their most trusted source for retirement planning advice, falling to just 21% for banks*
So the question remains, should banks and financial advisors be advertising when the market is low and consumer confidence is fragile? The answer is yes—but financial advisors can talk to their clients in a new way. We’ve noticed some financial investment firms have adjusted their messaging to calm the nerves of their investors, with taglines such as, “Invest Calmly” (Sentry Investments) and “Confidence in a Changing World” (Mackenzie Investments) but in today’s market, investment firms need to form a media strategy that goes much deeper. In as much as the consumer has changed, so has the way in which we can effectively reach them. Banks and financial institutions should embrace this opportunity to communicate with consumers effectively during a time of vulnerability.
Communicate in Real Time. Banks and financial institutions should talk to their customers as changes happen. Messaging that may be impactful today (i.e. if the market tanked) may not resonate the same way in the next few weeks. A dynamic advertising strategy allows banks and investment firms to be proactive and to adjust their campaign to respond to fluctuating consumer concerns and their own product marketing needs. Dynamic advertising will not change the market but it will show consumers that their financial advisors are in front of the issues they are facing .
Targeted Content Marketing. While Millennials and Generation Y might be having “The Best Recession Ever“, Canada’s most prolific savers are watching their futures flash before their eyes—and they’re doing their homework. According to research, parents with 12-17-year-olds at home, specifically fathers, are more are interested in learning about financial products*. They are at an age where retirement is on the horizon and they are reviewing their options. Banks and investment firms should engage this audience in a way that is valuable to them. Our research shows that keeping consumers engaged with a strong content marketing strategy during the product discovery stage “holds the greatest potential to push them to taking action.”* During a bear market, banks and investment firms can be impactful by providing resources such as educational materials, customer reviews or updated financial information, and showing how they impact retirement products.
Create Engagement Communities. Banks and financial institutions should create spaces for interested consumers to engage directly with their brands through social networks. Research revealed that having communities for consumers to directly ask questions about products is of interest to fathers (42%) and parents with teens at home (37%)*. Parents of teens are also “more likely than average to engage with financial companies on social networks.”* The fact “that parents of teens show a desire for information during the product discovery stage suggests great gains may be mady by providing tailoring information (such as product descriptions and consultations) via social media platforms”*.
With a targeted, data driven media strategy, along with strong content marketing tactics, banks and financial investment firms can strengthen their impact and reach their audience in a much more meaningful way.
Gaggi Media has 20 years of experience with financial institutions.
*Data Source: Mintel