"Lending and bond purchases by the financial sector as a whole—which includes commercial banks, credit unions, savings institutions, money market funds, and insurance and pension companies—will increase by an annual average of about 4.5% through 2011, a respectable rate of growth but half the pace of the previous five years," said Leo Abruzzese, editorial director, North America, and director, financial services, at EIU.
The sector is emerging from a period of exceptionally strong asset and profit growth, said Abruzzese, who authored EIU's forecast. However, an expected sharp slowdown in the economy in 2007 will weigh on financial institutions and their products, he said.
Still, the nation's nearly 9,000 commercial banks are in good health, having just aggregately recorded net income growth exceeding 11% in 2006, the fifth year in the last six that income has increased by double-digits, Abruzzese said. Retail and corporate financial services are in high demand, thanks to a rising population of working-age young adults, as are long-term savings products as baby boomers reach retirement age.
Getting through can be tough
Despite the opportunities for marketers to capitalize on the financial service industry's prosperity, getting through to key decision-makers will not be that easy.
"They're elusive, highly intelligent and sophisticated," said Jane Lauterback, exec VP-director of marketing at Doremus New York. "It's important to recognize that not all the C-level or other decision-making executives in this industry are the same, and meanwhile that decision influencers are an important group in the mix not to be ignored. The challenge is to reach these audiences in unique and compelling ways, with simple but powerful messages grounded in superior insights."
Richard Eldh, managing director of marketing research advisory company Sirius Decisions, said that you need to market to different executives in different ways. "CXOs in this industry typically demand high interaction, especially face-to-face sales and executive forums," he said. "Director-level decision-makers like as much information as they can put their hands on; they want white papers, webcasts and case studies. Finally, managers and users who typically play an influencer role want product and service trials and demos, either sent to them or displayed at a trade show."
Tactics and channels vary
Which tactics and channels you use to reach the market also depend on the size of the target institution, said Christine Crandell, VP-marketing at Ariba. "A one-size message doesn't work anymore," Crandell said. "How you approach a midsize bank will differ greatly from a global Fortune 500 financial institution because the business needs and audience profiles are extraordinarily different."
Lauterback strongly believes that it is especially critical to do your homework when marketing to financial services institutions. "You need a clearly defined strategy, which should be the foundation for all your marketing communications with this target audience," Lauterback said. "Financial service companies are complex organizations, and to uncover a clear and differentiated strategic view requires a deep understanding of their business and the outside forces working upon them."
Complex organizational structures and complex needs translate to complex marketing transactions, Eldh said. "We've seen sales cycles to financial services institutions increase 20% over the last three to four years," he added. "And the number of participants involved in those complex decisions has increased by three to four individuals over the same time period."