Today in 2022, power has undoubtedly shifted from the seller to the consumer.
Financial services firms can no longer hope to simply market a product or service and expect people to simply buy it. Rather, consumers research online before making big decisions about who to invest their money with.
Moreover, rather than asking to speak with your sales representatives in the early stages of their customer journey, consumers are more likely to first read reviews, seek referrals and take time reading your thought leadership (e.g. blog posts on your website).
Is your financial firm meeting customers where they are at, in light of this changed consumer behaviour? Have you taken time to thoroughly research who your prospective clients are, what impacts their decisions and how they can be targeted?
In this guide, we suggest ways that financial firms can engage in this kind of market research in 2022. We hope you find this content useful and inspiring. Please get in touch if you’d like to discuss your own financial marketing project with us.
What is market research?
In financial marketing, market research is primarily concerned with gathering key information about your “buyer personas”.
A buyer persona is a description of your target client. This often includes a placeholder name at the top of the document (e.g. John Adams), and should detail important information about the target client’s demographics and psychographics.
Demographics include descriptive information such as income, age, gender, marital status and profession. Psychographics include details such as common pain points, dreams, fears, values and motivators.
Market research helps you uncover this important data so that you can wield it more effectively in your marketing strategy.
Why engage in market research?
Today’s digital world is full of noise. There are many potential customers who all face millions of websites, blogs, adverts and other voices demanding their attention. To get noticed, therefore, you need to focus on the right people and cut through this noise.
Market research reveals who you should target in the midst of this massive crowd, first of all. This helps you concentrate your efforts rather than wasting time and marketing budget going after people who aren’t right for your business.
Moreover, market research helps you discover which messages, marketing channels and times of day/week may be best to engage them (so they eventually become a client). A lot of helpful information can be uncovered during the research process, including:
- Whereabouts online your target clients do their research about firms like yours (e.g. other financial services blogs, or review sites).
- Which competitors/rivals are currently attracting your audience’s attention, and how.
- What questions, concerns and pain points your prospects are looking to address during their own research process.
- How large your target market is and how much opportunity this presents to you.
- Which factors can influence the prospect’s decision-making along their customer journey.
Primary & secondary research
There are different ways to research your buyer personas. Broadly, however, you can do this in two ways.
Primary research involves approaching your target client directly to gather information from them. This might involve running a survey or online poll, to get their opinions. It could also involve running focus groups and interviews.
Secondary research is often easier to do (although sometimes less illuminating), since you can do it without leaving your desktop. Here, you find solid research published by other people/organisations about your target audience. Examples might be:
- The Office for National Statistics (ONS).
- Companies House.
- The BBC
- The House of Commons Library.
- Think tanks.
- Data providers.
How to do market research
There are many ways to do market research for financial services. However, one good place to start can be your competitors.
Here, you need to think carefully about the landscape your business operates in. For instance, as a small financial planning firm, your competitors might mainly comprise other firms similar to yours.
However, if your primary product is an investment platform offered to retail customers, then you might not be competing with other companies – but with other divisions/departments.
For instance, Apple competes directly with Microsoft over personal computers. However, it competes with Spotify for online music.
Here, you can do competition research through direct investigation (e.g. combing over rivals’ websites, social media accounts and company filings on Companies House). However, you might also benefit from accessing a dedicated industry report to get a bigger picture.
You should also bear in mind that your marketing competitors are not always the same as your business competitors. For instance, you might compete with other financial planning firms in your area for market share. However, perhaps in the search engines your SEO competition is mostly online forums and newspaper articles.
Wherever you start your market research (i.e. starting with the customer also makes sense), it is important to summarise your findings in a clear, digestible manner and to explain their significance.
How can you lay out your market research findings as a financial firm? Are any useful templates which can help?
Here, there are a range of different resources and frameworks that can be helpful. The one(s) you pick will depend heavily on your type of business, your goals and marketing strategy. Here are some useful ones to consider:
- SWOT analysis (strengths, weaknesses, opportunities and strengths).
- Porter’s 5 Forces (Competitive Rivalry; Threat of New Entrants; Buyer Power; Substitution Threat; Supplier Power).
- Source of Competitive Advantage (Cost Leadership; Differentiation; Cost Focus; Differentiation Focus).
- Ansoff’s 4 Strategies (Market Penetration; Market Development; Product Development; Diversification).