Marketing financial services can be tough. People might be willing to risk trying a new toothpaste or a new pair of sneakers, but a new financial advisor? That’s a much harder sell.
Money represents hopes and dreams to consumers – not to mention their livelihood – and that’s something people don’t part with easily.
So, how do you get consumers to trust you when the stakes are so high? You’ve got to go the extra mile to get on a potential customer’s radar with strategies like social proof and reciprocity. These strategies work to create personal connections and build trust in your products for new customers.
We’re sharing four proven psychological tactics to help you earn consumers’ confidence and turn them into ambassadors for your brand.
Tip #1: Build Trust With Your Community
Here’s some food for thought: 60% of consumers rank trustworthiness and transparency as crucial factors in their purchasing decisions. At the same time, 71% of consumers are unlikely to do business with brands they don’t trust, and 73% will not recommend them to their family and friends.
Even more compelling, a recent survey by Mastercard found that only 55% of modern consumers trust their banks, and the trust score is significantly lower for fintech, with just 32% expressing confidence in their services.
Risk-averse consumers aren’t willing to take a chance on new services or unfamiliar brands. Traditional advertising methods only increase suspicions because many people don’t really trust ads either.
Clearly, trust needs to be at the top of every financial services marketing team’s mind.
How To Build Trust in Your Financial Services
Build trust with potential customers by using the network effect. The network effect posits that the more people who use a service, the more valuable it becomes.
In marketing terms: The more people who use your product, the more desirable and trustworthy it looks to consumers.
It’s rare that someone is changing their bank or signing up for a new credit card because of the excellent marketing of financial services – not even for quirky TikToks or slick YouTube videos. But a heartfelt recommendation from a friend might win them over.
Leverage your existing customer base by encouraging them to share their affiliation with your company on their personal platforms. Offer discounts or other incentives to customers that share information about you on their social networks.
You can also make sharing super simple by offering up pre-written posts they can use. Ask users to personally invite their friends to join through a refer-a-friend program that offers rewards for new sign-ups.
Source: Coinbase.com
Coinbase offers an affiliate program to customers to help make bitcoin and cryptocurrency more accessible to everyday consumers. For every friend or family member who signs up for Coinbase using your affiliate code, you earn a percentage of the commission. This tactic works to retain existing customers and brings in new, highly actionable ones.
Tip #2: Use Social Proof To Boost Brand Awareness
Social proof is the idea that customers are heavily influenced by watching what other people do. It’s a tactic that’s useful in both B2B and D2C industries – but in the financial services industry, it’s essential.
That’s because, unlike most consumer goods, financial products are mostly invisible. Plus, for the average person, finance is confusing. This abstraction makes it difficult for consumers to evaluate potential services because they can’t see or understand the features and selling points. Instead, they get overwhelmed and do nothing.
Focusing on social proof in your digital marketing strategy can help potential customers pick your company over competitors because they’ve gotten reliable recommendations from folks they trust.
How To Add Social Proof to Your Financial Services Marketing
Marketing trends around financial services companies frequently involve selling intangible ideas like “security,” “financial freedom,” and “growth.” Bring these concepts back down to earth by showcasing real customer success stories. Think testimonials and positive reviews on your website.
You can also use social media to highlight real customer stories and services that illustrate your brand message. Connecting the dots between your product and customer happiness will help your potential customers see themselves as satisfied with your brand.
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Source: Instagram.com/Klarna
Online payment company Klarna puts its existing customers at the forefront of its social media strategy, with user-generated content (UGC) to prove that consumers not only use its service but also enjoy using it.
The company also uses these posts as micro case studies that show off trendy clothing and positive customer experiences. This gives potential customers the impression that the brand is also trendy, to entice them to go to its website to shop for deals.
Expand Your Finserv Customer Base With Referral Marketing
The Finserv market is growing at a furious pace. Leverage your advocates to capture new clients and drive more growth.
Tip #3: Connect With Late Tech Adopters
Financial services institutions are becoming increasingly reliant on digital experiences and technology. That growth has mostly been driven by younger generations that embrace the convenience of online services like buying a car or refinancing your home loan, all from a mobile device.
Yet older generations of consumers, i.e., baby boomers, remain hesitant to trust new technologies. Privacy concerns, fears about the unknown, and a general lack of understanding of the services available have prevented many financial services providers from getting a foothold with this age bracket. But boomers are shifting their habits.
In fact, 88% of baby boomers are willing to adapt and embrace digital technology and social media if it makes their lives easier. This is a golden opportunity to reach out to seniors for a vast range of financial services, from investment tools to estate planning services to real estate apps.
Plus, a whopping 73% of adults over the age of 50 use the internet from a smart device, and most already bank online, so the market’s potential is strong.
How To Market Fintech to Seniors
The best way to reach late tech adopters is to lean into the psychology of the familiarity effect. The familiarity effect, or mere exposure effect, refers to the fact that people tend to develop positive associations or preferences for things only by being exposed to them. For example, the more a consumer hears about the benefits of online estate planning, the more favorable they will feel toward the concept.
Social media is an excellent avenue for building trust and brand recognition with seniors. There are 33.8 million monthly active users on Facebook that fall into the baby boomer category.
You could pump a ton of money into Facebook ads, but word-of-mouth marketing tactics are a far more reliable method.
Social media campaigns that feature brand ambassadors, user-created content, or testimonials are great ways to get your brand in front of seniors’ eyes and increase your brand’s visibility.
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Source: Instagram.com/Everplans
Everplans, a financial brand designed to centralize your most important documents, does an excellent job of using its social media platforms to reach its target audience of late tech adopters.
The company’s content marketing strategy focuses on educational content. Each post has a strong brand identity and often features the brand’s CEO and founder sharing tips to build trust and increase brand exposure among seniors.
Everplans created a social media marketing effort built around highly shareable and informative graphics and videos. These digital marketing campaigns help to inform followers of its many services, including end-of-life and estate planning.
Tip #4: Drive Loyalty With Social Reciprocity
While people used to be loyal to the same bank their entire lives, an influx of new choices and offers make it much easier for consumers to shop around – which reduces customer loyalty to a brand.
These days, financial consumers have an average of 5.3 bank accounts across different banking institutions. On a surface level, this metric might suggest younger generations of consumers don’t have high brand loyalty – for example, only about 37% of Gen Z consumers identify as loyal to a brand.
Dig a little deeper, and you’ll see Gen Z does have a capacity for loyalty; they just approach it in a different way than past generations. Younger consumers are more likely to stick with a brand that’s aligned with their values and has good digital features, like a user-friendly app.
That’s where social reciprocity comes in – or the “you scratch my back, and I’ll scratch yours” maxim. Offer millennials a deal they can’t refuse, and they will not only stay loyal, but they’ll also invite their friends.
How To Apply Social Reciprocity to Your Marketing
If you’re marketing financial products to new customers, it’s critical to include referral programs in your campaigns. Robust rewards programs that offer incentives, deals, and special perks to loyal users are a significant selling point for money-conscious millennials.
Structure your program to reward long-term customers, and hype these perks in your branding materials. Why? Because 80% of an enterprise’s future profits are brought in from 20% of its current customers.
The most impressive bit? Referred customers are better customers.
According to a well-established study from The Wharton School, the lifetime value (LTV) of referred customers is 16% higher than that of non-referred customers, and they exhibit an 18% lower churn rate as well. Today’s consumers are also willing to spend more with your brand over a competitor if they have an incentive to stay loyal.
Bolster your referral program with cash incentives and rewards for both the referrer and the referee. A dual-sided program makes the referral more than just a self-serving act for the referrer; it’s a gift they’re giving their friends and family.
Source: AmericanExpress.com
Even highly trustworthy financial institutions use referrals to drive their growth. In fact, American Express is famous for its referral program. Credit card users who sign up friends receive points that they can redeem on goods and services, like concert tickets, restaurants, and special shopping rewards.
The person they refer also gets a special friends-and-family-only deal. It’s a win-win that grows its customer base and keeps users loyal.
Marketing Financial Services Is About Connecting With People
These marketing strategies boil down to the same central theme: creating a lasting connection with customers built on trust. That trust is essential, not just for convincing customers to take a chance on your service but also to turn them into loyal customers who stick with you long term.
If you want to see your audience base grow, invest in a growth marketing tool, like Extole, that can help you better connect with customers. Schedule a demo to see our platform in action.
