For the last 20 years or so, financial marketing has been all about data. Companies have devoted huge time and resources to gathering information about their clients and prospects, and, for most firms, marketing operations have come to revolve around the CRM and regular mailshots.
There’s nothing wrong with mailshots. They can be very effective. But, increasingly, my guess is that firms will start to rely on them less and less — and no, not just because email and snail mail continue to fall down the pecking order of preferred channels of communication.
Perhaps an even bigger catalyst for change will be the introduction, from 25th May this year, of General Data Protection Regulation, or GDPR — a new set of EU standards designed to strengthen the control that individuals have over their personal data. GDPR will replace all existing UK data laws, and Brexit will make no difference as the new standards will be subsumed in the Great Repeal Bill.
In a nutshell, firms will require consent for storing people’s data for marketing purposes. Consumers will have to “opt in” (pre-ticked bones will not be sufficient); firms will need to be specific about what they will do with the data; and the tracking of consent will be mandatory. Crucially, consumers will have “the right to be forgotten”, in other words, to have their data deleted.
So, what does all this mean for marketing departments? First, companies will be required to appoint a data protection officer, with responsibility for ensuring compliance. Assuming they haven’t done so already, they will also, clearly, need to change their processes and train their staff accordingly.
But more interesting for me, is how GDPR will change the way that financial firms market their products and services. I expect it to have four main consequences.
1. There will be less of a focus on mailshots
There will always be a place for direct marketing, whether via post or email, but the new data protection requirements placed on firms will add to their workload. Doubtless, too, many consumers will exercise their right not to be contacted or not to have their details on your database at all. As a result, I suspect, marketers will place less of an emphasis on mailshots than they have until now.
2. Mailshots will become more targeted
GDPR requires firms to have consent for each different type of communication. So, for instance, if someone enters their email details to download a white paper from your website, you can’t just add their information to your general email marketing list. This is, in fact, a positive move — for marketers as well as consumers — in that it forces firms to find out exactly what the people they want to communicate with are actually interested in. Mailshots, then, should become more targeted, useful and relevant.
3. Content will take centre stage
If you want people to opt in to having you store their data and contact them, you will need to give them a reason for doing so. That means one thing: you need to demonstrate that your content — whether that’s videos, podcasts, articles, infographics, competitions or whatever — is content that they genuinely want to receive and share. In short, the bar for content is about to be raised; so if it isn’t good, original, creative, interesting, helpful, funny, or a combination of all of those, you might as well not bother. Sure, data will continue to be important, but content, more than ever, will be king. Content is the new data.
4. Social marketing will become more important
If content is king, distribution is queen. There’s no point in having the best contact the financial sector has ever produced if you can’t get it in front of sufficient numbers of people within your target audience. As the reliance on a mailshots wanes, I expect social media to become an ever more important distribution channel. It amazes that so many big financial firms, particularly asset management companies, have still barely dipped their toes in social media, if indeed at all. The arrival of GDPR only serves to underline what they should have acknowledged some time ago — that they simply have no choice but to take social marketing more seriously.
Conclusion: Threat or opportunity?
GDPR hasn’t exactly been welcomed by marketing departments with open arms. It does create work — both initially, to prepare for its introduction, and on an on-going basis once it comes into force. But I do see it as more of an opportunity than a threat. Good marketers who build their strategy on carefully-targeted, high-quality content will undoubtedly benefit.
And one more thing. The financial industry, as all of us know, has an issue with trust and transparency. What better way to foster both of those things than by demonstrating to your clients and prospects, over the next few months, that you take their data and their privacy seriously?