Differentiating themselves from their competitors is a key challenge for nearly two thirds of our respondents, although some sectors find it more of an issue than others. As Chart 3 shows, Private Banking and Wealth Management, Mortgages, General Insurance, Corporate and Investment Banking, and Asset Management were the most affected, while less than half of Fintech, Retail Banking and Life and Pensions cited it as their key issue.
When we compare this result by budget, there is a definite correlation between the size of budget, and the degree to which creating differentiation is a challenge. In other words, the more money marketers have, the easier they find it to differentiate.
We asked our panel of experts their view on differentiation and how it can be achieved. Their discussion centred on the fact that marketing itself cannot achieve true differentiation - it must come from the heart of the business.
Businesses need a clearer mandate with a focus on differentiation within the proposition and business culture, like Co-operative Bank’s stance on ethical values, Nationwide’s unwavering commitment to Members, and First Direct’s excellence in service. This must come from the top down, involving all areas of the business, not just marketing. Businesses should be single-minded about what makes them different, and then live those values every day, and throughout the organisation.
Our panel of experts also agree that the Executive Board should move away from short-term thinking and the need for instant results, which is largely driven by their own remuneration structure, and focus on risk and compliance. Their tendency to be conservative is getting in the way of creativity, and genuine differentiation needs time, and it needs budget. Marketers must be given the freedom to take creative risks, and the permission to fail.
Three in five respondents (60%) said that achieving and proving campaign effectiveness remained a key challenge. Interestingly, respondents with less budget seemed to find it less of a challenge than respondents with higher budgets, as Chart 5 shows.
When asked which channels best demonstrated ROI, digital advertising came out top with social media also scoring well. Print advertising and PR were harder to justify, and 55% of respondents said they couldn’t demonstrate ROI on content.
Proving that campaigns are effective has long been a key challenge for marketers, so we asked our panel of experts what they thought:
The need to prove ROI is undoubtedly important, but it can get in the way of testing new strategies and investing in longer-term brand initiatives. Linked to the short-term culture within financial services businesses, marketers are finding it harder to justify running campaigns that take two to three years (or more) to mature, in favour of running tactical campaigns that are deemed to be measurable and produce instant results.
It’s important that marketers make the case for campaigns that are new and innovative, or that have a slower burn and may only be measurable through longer-term brand metrics. But caution must also be exercised, especially where new technologies are concerned. Every campaign must be relevant and useful to the customer.
The shift in technology and use of data should make for exciting times for businesses and marketers. But with 57% of respondents citing it as an issue for the business, and 48% finding that adapting to technology is a challenge for marketing, there’s progress to be made in harnessing the opportunity.
As Chart 7 shows, most aspects of technological change are yet to have a large impact on marketing. More than half of respondents say that artificial intelligence and machine learning will have no impact on their marketing plans this year, and a third state that mobile marketing and programmatic marketing will have little bearing.
Chart 8 shows these results broken down by sector. Data analytics and marketing automation look set to have the biggest impact, although these mostly only impact between a third and a half of respondents.
Over 40% of respondents said their relationship with IT is either poor or just okay, so we asked our panel of experts to discuss whether this is important, and what more marketing could do to improve their relationship with the ‘techies’.
It was felt that IT can still have a very inward-looking mandate. Their focus tends to be on large budget transformation projects and simply keeping the wheels turning day-to-day. Product, marketing and servicing teams should be thinking creatively about the role data and technology can play in making life easier for the customer. But they need access to technical expertise to support that. Bringing IT closer to the customer-facing parts of the business should be encouraged from the top down through shared objectives and KPIs. And businesses could make it easier for people to collaborate on new ideas.
If financial services firms want to be able to make the most of technological advancements, there needs to be a change of mindset. There should be investment in young and innovative IT experts (who are naturally drawn to start-ups), and marketers must invest in training and development to ensure their skills keep up with the trends.
