Can't Such a Profitable Industry Do Better?
The financial services industry is unfortunately addicted to a product-focused orientation such that sales are minimized. It may seem at first that the firm that does a hard push on their product through brokers and agents may be wisely marketing their financial product or service. But in fact, the product focus leaves the financial services firm at the following disadvantage:
- their product is commoditized with every other similar financial product (e.g there's nothing different about one mutual fund vs the other)
- as a result of commoditization, they are constantly fighting for shelf space vs their competitors
- they are continuously pushing on the weakest link in their distribution--the broker's inability to market himself
So the typical financial services marketing activities conducted by product firms look like:
- taking brokers to lunch and schmoozing them because they know their product is the same as others. Thus, they compete on a beauty-queen basis, hoping to look better than their competitors
- coming up with all types of sales tools--scripts,storyboards and illustration software (the more colors, the better)
- offering trips and incentives when regulations allow, again attempting to look better than their competitors
Stop Confusing Marketing and Sales
But what if the financial product firms, say the mutual fund company or the insurance company, decided that focusing on the sale of their product was not the best way to maximize sales. What if they actually employed financial services MARKETING and did not confuse marketing with sales? Their tactics would then look different. The first questions would be "what is most important to the brokers who distribute our product?" And the quickly realized answer is that brokers certainly do not need another me-too product. What the broker needs is more clients.
So smart financial services marketing is helping the brokers, the distribution channel, to fill their pipeline. Notice, for example, that Intel sells more chips not by attempting to sell you, the end user, their chips, but by having you request their product from their distributors (is it Intel inside?). The zen paradox of so many activities is that the best results (in this case, maximizing financial product sales) are often achieved when you do not focus on the end result you desire. In this case, focusing on the distributors to gain clients will bring the most sales:
- teaching them how to get more referrals, use direct mail more effectively, write better copy for ads, give more effective seminars. Teaching brokers how to get clients must be devoid of the product pitch. As hard as it may be for the insurance company NOT to hand out slides to the seminar "Why Annuities are the Best Source for Retirement Income," the insurance company will fair better if it teaches the broker how to get better attendance at his seminar.
- this product-less education on how to be more successful can be delivered via webinars, maybe a weekly e-newsletter "referral tips" or in-person classes by given their wholesalers.
Financial services marketing can result in a lot more product sales when it is actually about marketing rather than products or sales pitches.