Behavioural Targeting Marketing And The Finance Sector

In the age of the internet, it’s easier than ever for companies to collect information about consumers. From search engines to supermarkets, almost all major industries analyse usage statistics and monitor customer behaviour to attract customers and sell products.

With the new EU laws on the use of cookies, consumers have to consent to websites gathering information about internet users but, generally, it is easy for companies to gather information about consumers. This type of marketing strategy, known as audience targeting, is known to be successful in many industries, but how well does it translate into the finance sector?

The financial products and services industry is a competitive sector. Covering a range of companies from insurance companies and stock brokers to banks and credit card providers, financial service providers are constantly vying for our custom. Behavioural targeting marketing works in a variety of ways, via the internet, through postal advertising or through in-branch sales, offering relevant services to potential customers.

Behavioural targeting marketing can be an effective strategy for increasing sales of financial products. Indeed, in recent years, a number of major banks and credit card companies have employed consumer tracking systems such as Omniture Touch Clarity to analyse and match customer needs, giving them a competitive advantage.

This type of marketing works because it targets consumers who are likely to use certain products, drawing their attention to services which are likely to be relevant to them.

Ultimately, behavioural targeting is simply an alternative marketing strategy, which works by focusing on captivating possible consumers, rather than taking a blanket approach in the hope that a widespread marketing scheme will attract a small percentage of consumers.

A joint research project of 2011 led by scholars at Norwich Business School in the UK and KellinWell-HK Electronics and Computing Ltd studied the impact of behavioural marketing on UK university students. The research demonstrated that young people are more easily influenced by internet-based target marketing than older consumers.

Banks and other financial service providers have always been interested in attracting younger customers, aiming to build lifelong relationships with these consumers. The findings of this report suggest that using the web to conduct behavioural targeting marketing strategies may be a way of establishing a young and loyal client base in the financial services sector.*

Although young people are prime targets for online behavioural marketing, on a more general level audience appropriate marketing schemes seem to be at their most effective when they target customers in-store or in-branch. For example, if you have a customer who regularly shops in supermarkets or buys online, a cashback credit card might be a suitable and useful product for them. While sending targeted postal marketing or email correspondence, unsolicited mailings from banks and credit card companies is likely to be dismissed by consumers as junk mail, customer service representatives and bank managers offering products and services in store can use collected data to convince consumers that a product would benefit them.

Customers like a personal service, so using targeted face-to-face marketing alongside analysis of consumer behaviour can be a persuasive strategy for offering individual products and services. In a report of 2010, Ernst and Young revealed that 56% of UK customers report losing faith in their bank as a result of the economic downturn; behavioural targeting allows companies offering financial products and services to work closely to restore consumer confidence in their enterprise.**

Targeted marketing can also be a lucrative means of attracting potential customers in the insurance industry. Using web-based advertising to reach consumers who require certain products is more likely to produce tangible sales results than a widespread strategy. The effects of this approach can be seen clearly by looking at strategies employed by car insurance providers; by analysing consumer behaviour, companies can ascertain whether a consumer is a car owner or driver, and therefore a worthwhile target for online or postal advertising. It may also be possible to see when a person’s policy is due for renewal, giving companies an opportunity to contact the consumer outlining their best offer in a bid to beat the competition. While such strategies may be more expensive and time consuming from a marketing perspective, the benefits of this approach would seem to outweigh the costs of implementing behaviour targeting schemes.

*http://www.emeraldinsight.com/journals.htm?articleid=1839422&show=abstract

**(http://www.ey.com/Publication/vwLUAssets/Understanding_customer_behavior_in_retail_banking_-_February_2010/$FILE/EY_Understanding_customer_behavior_in_retail_banking_-_February_2010.pdf)