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MOUDLUE 8MOUDLUE 8

Marketing Of Financial Services

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ContentsContents Attracting and retaining customers

Segmentation Positioning

Development and launching of new

products.

Behavioral profile of customers.

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AttractingandretainingcustomersAttractingandretainingcustomers Attracting Customers:

Customer acquisition:

Lead generation

Lead qualification

Account conversion

Cost of lost customers:

Surveys

Lifetime value:

Present value of the lost customer

Customer retention:

High switching barrier

High customer satisfaction

Relationship Marketing:

Looking for suspects to find prospects

Disqualified prospect:

Poor credit rating

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ContdContd Relationship marketing (cont.)

qualified prospects into first time customer

first time customers into repeat customers

repeat customers into clients

clients into advocates

advocates into partnership.

Levels of relationship: Basic,

Reactive

Accountable

Proactive

Partnership.

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SegmentationSegmentation

Segmentation is a concept in economics and

marketing. A market segment is a sub-set of a market

made up of people or organizations with one or more

characteristics that cause them to demand similarproduct and/or services based on qualities of those

products such as price or function.

Segmentation can help firms understand customers

needs, preferences, channel behavior and choices of

company or services.

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Segmentation helpstoanswerSegmentation helpstoanswer

themostimportant questionsthemostimportant questionsWho are my best customers?

Whatproducts and services do they need?

When will they need them?

How do they want to interact with us?

Why do they behave the way they do?

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Consumerscan beConsumerscan be

segmentedin fourmainwayssegmentedin fourmainways Demographics age, income, gender,

geography

Contribution revenues, costs, profit and

lifetime value

Behaviour product ownership, spend,

transaction frequency, channel use

Attitudes technology optimism, brand

loyalty, trust, financial self-direction

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NosinglewayofsegmentingNosinglewayofsegmenting

consumersisperfectconsumersisperfect Demographics are easy to gather but are rarely

the best predictors of behaviour

Contribution tells you who matters, but can onlybe measured for existing customers and doesntexplain motivation

Behaviour is relatively easy to gather, butchanges quickly and is often the very thing that

you are trying to influence

Attitudes are the hardest to measure but changeslowly and explain consumers behaviour andhow to influence it

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Segmenting financialconsumersSegmenting financialconsumers

Self-Directed Validators

Avoiders

Gatherinformation

Relyon

advisors

Ignore

advisors

DelegatorsDont gather

information

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Each group hasdifferentneedsEach group hasdifferentneeds

Self-Directed

Validators

Avoiders

Information, value, speed,

and control

Information, value, advice,reassurance, and a trusted

relationship

Simplicity

Group Financial needs

Take financial decisions

on their own; seek best

products and prices

Interested in finances;seek advice on complex

decisions

Neglect their finances;

distrust firms and

advisors; risk averse

Description

DelegatorsAdvice, good service, and a

trusted relationship

Bored or confused by

finance;want others to

take decisions for them

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Positioning

Positioning

The battle for the customers mind

The position that the product/brand has in

the mind of the customer.

How the product/brand is perceived.

The products/brands personality.

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PositioningPositioning strategiesstrategies

By attribute: Our current account offers you extra

interest

By benefit: Bank of Baroda India's International bank

By price/quality: You enjoy maximum privileges with theminimum subscription fee

By competitor: No other bank offers so much

By user: American Express: The businessmans passport

By application: Some things are priceless. For all the rest,there is Mastercard

Hybrid strategy: combination of two strategies

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1. How can we apply 4 Ps of marketing in financial services to market?

2. Explain the market mix for financial service, with an example. How do yousegment the market and position the product?

3. Difference between fund based and fee based service.

4. Scope, advantages and disadvantages of consumer finance.

5. Explain the behavioural profile of customers while valuating financial service

offering.

6. What is the consumer behaviour pertaining to financial services? How do bank

launch technology driven financial product?

7. Different source of consumer finance.