Financial products are commoditizing faster than ever. At the same time, margins are quickly disappearing in a quest for short term volumes. It is in this environment that the shrewdest marketers are managing the opposite.
They ask for high margins and carve a niche so deep that clients will jump through hoops to get the chance to become a client. *Almost* no selling required.
So how do they do this?
In essence the answer is simple; don’t be all things to all people.
In the online FX trading space Etoro is a great example. In a market of ever more complicated platforms and serious players, Etoro realized that there is a segment of unsophisticated traders that is driven by the thrill of trading. They built a user interface that is wildly different from anything in other platforms, making trading more like gaming. Of course they have a big following, and command higher margins.
But a radically different product is not a pre-condition. In FMCG, companies like P&G use different brands for each product category. They are number one to three in most markets they are in because they analyse the market and find a profitable gap in the competition’s communication. Their products are not radically different than any of the other players – the brand and its communication is.
As implied in above example, an important rule in differentiation is specialization. P&G would not be where it is today if it was all things to all people; in practice that means they haven’t used one brand for all their target audiences.
Financial brands can utilize these principles also. Many insurance players do it, mortgage players do it – but why not the major retail bank, the broker or the boutique hedge fund?
Think ‘divide and conquer’. Analyze & specialize. In an ever fragmenting world this is the only way to efficiently and sustainably attract clients.
MGL can help. As a niche agency specialized in financial services marketing we can help you do the research & develop a brand and communication program that will deliver the sustainable competitive advantage needed in todays environment. Go to MediaGroupLondon.com for more information.