Get in the local loop
Shun the corporate approach and offer community forums with real content. Jason Ross in Money Marketing, January 31st 2002. Money
I suggested in Money Marketing last October that IFAs were ideally
placed to take advantage of customer confusion and apathy in the UK financial
services market. Since raising the issue, MM's editor has thrown
down the gauntlet for me of explaining how.
This is a brash attempt to do just that and one that ignores all the usual
consultant caveats - "need specifics of each individual case" and so on.
If you do not want to be assaulted with generalisations and opinion, stop
Let me start by summarising the current climate. Big financial
services providers are worried because the business models they have been
practicing for decades are losing their relevance, based as they are on
providing mass-produced products and targeting these at a mass market with
The response to the pressure of increasing competition is to use the same
tools but turn up the intensity, a process that sows the seeds of eventual
failure. The tools are well known - product development and marketing, which
largely consist of making slightly better stuff and telling more people
Or, to put it another way: "Banks, brokers, insurers and other
financial services firms are steadily encroaching on one another's territory,
forcing customers to sift through a mounting collection of product choices."
(Jupiter Media Metrix 2001: Integrated Finance). Too many choices, too much
From a business perspective, the diminishing customer returns are matched
with mounting marketing costs. Or, in today's world, increasing technology
spend, IT being a convenient budget for marketing to plunder, especially
with the board running scared about "this whole CRM/ e-commerce thing".
The IFA position is equally confused. Faced with too much choice, customers
want to turn to a trusted source. They are becoming increasingly sceptical
of the intensifying marketing hype and yearn for the kind of human conversation
where they will get real advice that has direct relevance to them.
At this point, they should turn to their advisers but the ambiguous position
of the IFAs, halfway between trusted professional and used car salesman,
severely limits the numbers who will do this.
One way out of this conundrum is to shift the emphasis of IFA
positioning from independence to advice in the context of a long-term trusting
There are structural ways of developing this positioning, notably, fee-paying
or flat-rate commission, none of which I am going to rehearse here.
What we are now addressing is the place people go to get information, not
flannel, where they go to get opinion, not hype, and where they go to find
out what other people like them are saying about this or that company or
product. We are talking about the internet.
The last three years have been a cycle of over-hype to over-pessimism but
we are at last starting to get an idea of what the web is all about.
As an anthropologist, I was brought up to believe that most research methodologies
only substantiate what you already know. To find out what people are really
up to, you have to get into the trenches with them and today that can be
an enlightening experience.
Point number one is that the Internet was not invented as a marketing channel.
In direct contrast to TV, with its advertiser-funded business model, the
net started as a forum for conversation, not e-commerce, streaming content
The killer application of the Internet is email and email is the net talking.
As you may have noticed, the language of email is very different from the
language of TV straplines or pension brochures. The Internet resonates with
the voices of real people.
You may also have noticed that when people get to control their media, what
they do is communicate with each other. Take the 1.2 billion text messages
sent in October and the 2.5 hours a month users spend talking over Internet
relay chat (ICQ).
OK, sermon over. So, how do we mobilise this insight in marketing IFAs to
customers? The simple answer is that we don't. As Fast Company put
it in August 2000: "Consumers have built up antibodies that resist traditional
marketing. We need to stop marketing at people and start creating an environment
where consumers can market to one another."
In this scenario, marketing plays second fiddle to the creation of market
Look at the places where people go to talk about money. You will not find
them on allied dunbar.co.uk, they are far to busy on motleyfool.co.uk, and,
to be honest, who can blame them?
When I click Zurich Advice Network on allieddunbar. co.uk, I get a sterile
statement explaining: "Zurich has a track record of success". In stark contrast,
Motley Fool tells me that an Isa is "a bit like a fortress that even the
Chancellor of the Exchequer can't invade".
Corporate track records of success do not interest your customers unless
they translate directly as a benefit.
The questions that clients want answering are of basic self-interest. Ask
yourself,how many times do your clients open their conversation by asking
what the track record of success of Allied Dunbar is? Zero. They want to
know: "How I get a mortgage in Kingston when the starter homes are four
times my salary?" and "What is really the best Isa to have when everyone
claims to have the top-performing funds?"
If your customers want corporate rhetoric, they can get it perfectly well
without an IFA.
But don't take my word for it, ask Accenture. Its August 2001 report on
e-business in financial services says customers want "a proven brand and/or
local presence" and "the option to engage in live two-way communication".
Better still, check it out online.
The question then becomes, how can IFAs facilitate conversations about matters
that engage their clients and turn a profit (given that the idea is to create
value in the IFA proposition, not erode it further)? Well, starting with
the right question is always the foundation of a good strategy but here
are some tactical pointers.
First of all, create a network of regional sites as local loops where customers
can share relevant stories and comment, why not www.kingstonifa.net.
Then have content provided by registered users and moderated by authoritative
IFAs, perhaps holding weekly clinics. Content would be linked nationally
and collaboratively filtered so that the most popular topics are dynamically
Make sure that product companies invest in this to support their IFA networks
but they should do this at arm's length to preserve the critical quality
Marketing support could be directed at alerting people to the
presence of these communities. IFAs then become experts who host discussions
as the true authorities on local money matters. They help knowledge-sharing
and this would support the revenue model shifting to a fee-based or hourly
Cold-calling and email spamming get relegated to the dump as
customers ask for advice, pulling the content when and where they need it.
Yes, this is a radical approach and, yes, it goes hand in hand with a repositioning
of the IFA proposition and the IFA revenue model.
But who can honestly say this is not happening already? As I started out
saying, the balance of power in financial services is shifting.
A gap in the market is opening up between institutions and customers and
the trick is to position IFAs to open this new conversation.
Copyright © 2002 by Money
Marketing. All rights reserved.