The “marketing mix” might sound like a one-hit wonder from the 1990s. Yet it is a valuable way for financial advisers to increase their market share, create more brand awareness and gain new clients.
You might have heard of the “4 Ps” of marketing – product, price, promotion and place. What you might not know, however, is how to apply these to your financial marketing to generate more interest, engagement and conversions.
In our opinion, there is an even better framework available to financial advisers to achieve these results – called the “4 Cs”. Here, we’re going to show you how this approach is different, and how you can use it to make smarter decisions with your financial marketing.
The 4Ps and the 4Cs: A Quick Overview
The idea of a “marketing mix” was popularised by Nick Borden in his book in 1964. Later, his ideas were gathered into four higher-level categories by E. Jerome McCarthy.
Theoretically, all businesses would be able to use these four categories (product, price, promotion and place) to detail their marketing strategy:
- Product: What is the product/service you want to sell, and why would customers want it?
- Price: How much will you sell it for, and how much will customers expect to pay for it?
- Promotion: How will you get the word out about your product/service?
- Place: Where will the product be available to buy, and how will it be delivered to the customer?
This framework can be very useful for retailers and other businesses which provide a physical product at a physical shop/store, which customers visit in order to buy.
As the world has become increasingly digitised, however, it became clearer that the “4 Ps” model neede updating. By the 1990s, it was also felt that a new model was needed which focused more on the needs of the customer, rather than trying to “shoehorn” customer needs into a product.
This is where Bob Lauterborn came along with his “4 Cs” approach, which we will be recommending for your financial adviser marketing in the rest of this article:
- Customer needs: What problems do your customers want fixing, which you can address with a product or service?
- Cost to satisfy: How much time, money and effort are your customers prepared to part with in order to have that problem solved?
- Communication: How will you build a relationship with your customers so that they trust you enough to fix that problem?
- Convenience to buy: what means would they prefer to use to have that problem solved?
Let’s look at these in more detail to see how IFAs can leverage this approach in their marketing:
#1 Customer Needs
Under the 4 Ps model, a business would sit down and focus on developing a “sexy” product which they hope appeals to its customers.
Under the 4 Cs model, a financial adviser does not start by trying to devise an alluring financial product or service. Rather, he/she starts by getting into the minds of their potential clients and asking themselves: “What problems does this person have which I can help solve?”
This approach changes the way you think about your services. Rather than buying a pension transfer consultation, for instance, your client is buying peace of mind and clarity about their future.
Rather than buying an estate planning service, they are buying a reduction in stress, more free time (since you are dealing with it all) and satisfaction knowing they are leaving the best legacy possible for their family.
This is often where new products and solutions are born – by looking at the problems faced by your target market and thinking of profitable ways to solve them.
#2 Cost to satisfy
With the 4 Ps model, people typically tend to focus on price: “How much is X customer prepared to spend in order to get Y product?” Price is important, but is just one part of a product’s “cost.”
Cost does indeed involve the price of your service, but with the 4 Cs model you are encouraged to consider the cost of your potential client driving, and then parking, in order to meet you for a “free pension consultation”.
You are drawn to think about the possible costs in time and reputation it takes for them to go and see a financial adviser. What about the emotional and relational costs involved when dealing with sensitive areas like wills, inheritance and probate?
Thinking in terms of “costs” rather than “price” is a great way for financial advisers to offer value to their target market, and differentiate themselves. For instance, perhaps you cannot come down in price for a particular service, but you can make it well worth the customer’s while by reducing costs in other areas (e.g. offering free parking, or offering video consultations rather than requiring face-to-face meetings).
Decades ago, marketing used to be more about brands “talking” to customers via channels such as radio, TV and billboard advertising. It, therefore, used to fit better under the 4 P’s idea of “promotion”.
In today’s internet age, however, customers do not simply want to be spoken to by businesses. They want to engage in dialogue – commenting on company blogs, for example, or speaking to a customer service agent on a website’s “live chat” feature.
This is where financial advisers can add value through communication, rather than just focusing on promotion. Think of ways to interact with your potential clients as you nurture them towards a sale, rather than just “selling” to them.
Think about how the internet has changed people’s ideas and expectations around convenience.
Whilst you used to have to go to HMV and rent a DVD, you can now simply buy a movie online for three days and watch it instantly without leaving your home.
You used to have to physically go to a shop for a new lawnmower using cash or card. Now, you can buy one online and have it delivered straight to your door, paying for it in a wide variety of methods including PayPal, card payment, online vouchers and more.
Rather than simply thinking about “where” your customer might go in order to buy things (e.g. coming to your office), think instead about how they like to buy things generally.
Do they like to buy from a catalogue, the internet, using credit cards, over the phone etc.? Are there any ways you can increase convenience and the range of appropriate buying options for your clients?