New Forrester Report Advises How To Win Affluent Consumers In The Economic Slump
In response to today’s volatile economy, many financial services firms are changing their marketing campaigns to fear-inducing marketing messages to attract and retain clients. According to a new Technographics® Report from Forrester Research, Inc. (Nasdaq: FORR), these efforts miss the mark with the affluent — those consumers with investable assets of at least $1 million. Forrester recently surveyed 2,500 North American affluent households on the state of the economy, the market, and technology, and found them to be confident about the economy and the market, secure in their wealth, and optimistic about technology. As a result, Forrester recommends two approaches above all to help firms gain market share: breeding loyalty and promoting a cohesive, relevant brand experience.
“The bottom line is that retaining customers costs less than acquisition, and loyal customers buy more frequently and spend more,” said Ekaterina O. Walsh, Ph.D., senior analyst at Forrester. “Moreover, loyal customers are a firm’s best acquisition vehicle. One of the top three ways affluent investors learned about their most recently chosen financial provider was through some sort of referral.”
To increase loyalty, companies must get back to basics by understanding their customers. Consumers do not separate their perception of a firm into individual channels or interactions. Instead, all their experiences, ranging from online statements to branch visits, mesh into an overall impression of the financial institution. Consumers do, however, have expectations for each interaction. Understanding these expectations will enable financial providers to promote the unique benefit of each type of customer experience — from the convenience of online statements to the privacy offered in branches — through a unified message.
Financial firms will succeed by focusing on the unique benefits of their services and integrating their delivery based on their target market’s expectations. To better understand what the affluent expect, Forrester analyzed four areas in which these consumers interact with financial institutions: advice, branches, Web sites, and customer service. Timely, relevant, and customized advice, which includes everything from picking stocks to tax planning, plays a key role in retention. The affluent also expect this advice to be offered via multiple channels, with 84% of millionaires expecting online and offline advice to complement each other.
The greatest benefits to branch visits for the affluent are high-touch service and privacy. Clients who report that their firm offers a private setting are more likely to recommend that firm and less likely to move to another company, for anything from lower fees and cheaper credit.
Affluent consumers’ affinity for technology is evident in how they use the Net to manage their finances: 44% of the wired affluent visit financial providers’ Web sites, compared with just 25% of their nonaffluent peers. They are looking for accessible information and self-service when going online. Customer service is the fourth component to a firm¿s total experience. With today’s tight budgets, financial firms should offer cross-channel service and rapid responses to client email.
“Affluent clients whose primary financial providers successfully integrate two or more desired services are 25% more likely to recommend the firm and 24% less likely to leave,” added Walsh. “And since the affluent are seven times more likely to list credit referrals than ads as the way they heard about their current provider, firms can’t ignore the power of loyalty.”
For the Report “Winning The Affluent In A Downturn” Forrester surveyed 2,505 US and Canadian members of NFO’s and Canadian Facts’ panel of households with investable assets of $1 million or more.
About Forrester’s Consumer Technographics
Using survey data collected from more than 380,000 completed surveys each year, Forrester¿s Technographics® is the industry’s most comprehensive quantitative research program on how technology impacts consumer attitudes and behavior. Since 1997, Technographics has provided a combination of continuous survey data, consumer segmentation, and technology insight that helps organizations understand and capitalize on changing consumer behavior. Technographics research is available for “Affluent,” “Devices & Access,” “Personal Finance,” “Retail & Media,” “Travel,” and “Wired Youth.”