The paradigm shift taking place in the financial services industry has advanced us from a sales to a marketing focus and, finally — it’s hoped — to mastering the art of being in business.

As we move from one paradigm to the next, we become more proficient at the previous levels. For example, in the course of defining and managing our businesses more skilfully, we develop more effective marketing strategies that lead to greater sales. Although The Financial Services Marketing Handbook is largely directed at corporate marketing departments, it can also serve as a stepping stone to the business mastery paradigm.

The book begins by asking the question:
“Are financial services services or products?” The answer is important to determining appropriate marketing strategies and tactics. Financial products, which are really ideas rather than tangible property, can be mass produced in virtually unlimited quantities and brought to market very quickly. Differentiation lasts only until a competitor decides to copy the offering.
Consequently, a marketing program that promotes the brand and purchase convenience and, perhaps, includes buying incentives may prove effective.

Financial services, on the other hand, are typically — but not always — delivered one-on-one and customized to some extent for each customer. In this case, a powerful marketing campaign may focus on the high level of personal service.

So if an investment management firm launches a new hedge fund, all subscribers are entitled to the same product features, whereas the dealer selling the fund has no guarantee that all clients will receive the same calibre of advice with respect to suitability from their advisors.

The conclusion is that financial services are both products and services, and, as such, can be successfully marketed using tools and techniques that are proven for both.

Before describing what marketing tools and techniques to use, the Handbook takes us through a strategic planning exercise that begins by segmenting target markets according to criteria that make them unique and identifiable. Those factors may be demographical, such as age, income level, net worth, occupation, geographical location, or psychographical, including values,
attitudes, beliefs, biases and preferences.
Not to be ignored are the clients you already have; research has shown that it costs five to 10 times as much to gain new clients as it does to sell additional products or services to existing clients.

An advisor’s first step is segmenting the client base into, say, A, B, C and D, with A clients those who score highest on the list of demographical and psychographical factors that make up the “ideal client” profile.

While not specifically saying so, the book separates marketing into “internal” activities, directed at existing clients and other supporting relationships, and “external” activities, designed to build brand awareness or profile and attract new prospects. Regrettably, there is much greater emphasis on the latter — which, I suppose, is not surprising, given that most of the resources (human and financial) applied to marketing in the industry have been in the form of advertising, seminars, media relations and other strategies to create brand awareness. As was noted earlier, there is a much higher payoff from leveraging existing client relationships. For that reason alone, financial services professionals should start their marketing plans by considering some “internal” strategies for retaining and expanding existing client capital.

Tactics that could be used by individual advisors recommended in The Financial Services Marketing Handbook include:

> Media advertising: Some broadcast and print media outlets are not beyond the reach of advisors and can help build brand or profile in the local community.

> Public relations: Advisors can hold their own against the corporate giants by becoming involved in their communities, fostering personal relationships with local media, networking and managing small but focused PR campaigns.

> sponsorship and event marketing: It’s a toss-up here. To be sure, individual advisors can’t afford what large companies spend sponsoring events, but they can position themselves strongly with targeted market segments by associating themselves with smaller ventures such as local performing arts groups, low-profile charities and children’s sports teams.

> The internet: For reaching an advisor’s existing client basis, however, the Web can be a great communication tool. Surveys have shown that high net-worth clients and prospects use the Internet to research financial products before they buy. They also like frequent contact with their advisors and, because business people today use e-mail at work, they are accustomed to exchanging information electronically.