By Todd Hoover
Financial brands have slashed volumes during the COVID-19 pandemic, but that doesn’t mean they have stopped marketing, says Equifax partner Comperemedia Omni, which shared insights during a recent MarketPulse webinar. By thoughtfully shifting messaging, marketers can continue to engage with clients and drive positive business outcomes presently and in the long term.
Across all sectors, credit card marketing has seen the largest impact, with email, native and Facebook volumes down more than 125% since early March, according to Comperemedia.
Home loan acquisition volume dropped year-over-year from April, although personal loan marketing is up. Meanwhile, deposits marketing volume is stable and challenger banks are outspending notable players. For example, investment firms consistently increased March media to support investors during turbulent market shifts.
Regardless of spend, almost all brands are adjusting their messaging strategy and mix to accommodate customers in this new landscape—and you should, too.
The best approach is to message in a way that fuels trust and meets the changed needs and priorities of consumers, using the appropriate channels.
Laura Ziemer, Director of Insights, Digital Media at Comperemedia, offers this advice:
Fine-tune existing services
No doubt, many consumers are struggling during the pandemic. The unemployment rate was 13.3% in May, with a total of 21 million Americans reporting job losses, according to the Bureau of Labor Statistics. COVID-19 related unemployment has generally hit the youngest adults, least-educated and lowest-earning workers the hardest. As a result, lenders continue to report more possible loan accommodations.
In the first week of May, the sharpest increase came from first-mortgage and auto loans. And, credit card issuers reported a higher number of new revolving accounts since March among subprime (<620) consumers. However, revolving balances are declining and savings are going up due to the effects of COVID-driven closures and shelter-in-place orders. In April, personal savings skyrocketed to 33%, the U.S. Bureau of Economic Analysis said, the highest since the department started tracking in the 1960s.
You can retain your newly frugal customers by adapting with them and offering limited-time changes that reflect job losses and reduced spending. For instance, credit card issuers are offering eligible new cardholders an extended time period to earn their welcome bonus. They’re also motivating customers to spend on local restaurants with bonus points or cash back for ordering delivery.
Lenders are leaning heavily into debt consolidation, mortgage refinancing, and payment assistance in their messaging, using a mix of channels to broaden awareness of loan use cases and market available terms. Investment firms are appealing to customers with incentives, giveaways and expert advice. One firm gave away bonus shares during a 10-minute window, while another offered deep fee discounts for managed portfolios.
Reward new spending habits
You need to understand where customers are prioritizing spend now, and think about how you can reward them. According to Comperemedia, nearly 60% of adults say groceries are a higher spending priority right now than before the pandemic. They then gave cardholders limited-time credits for streaming and wireless services and increased earn on U.S. supermarket purchases.
Another issuer gave cardholders the ability to earn up to a 5x return on groceries on all of their fee-based travel cards in May and June. Optimizing benefits on travel and entertainment cards is a smart strategy, as consumers forgo international trips for local comforts. Consumers are also cooking and entertaining at home more, so consider partnering with B2C brands on dining and other experiences; like one issuer who sponsored a live demo on social media with a food network.
Emphasize customer support
During COVID-19, the messaging emphasis among financial brands has shifted from acquisition to marketing that supports and reassures existing customers. You should continue working to ensure your consumers know you are present during the pandemic and that help is available. Banks have increased communications around remote account access, stimulus payments and customer support as shelter in place guidelines were extended through May.
One financial institution’s recent Facebook ad stated that they have “provided 1.6 million deferrals of mortgage, credit card and auto loans” during COVID-19. Another bank waived in-app, check-cashing fees after the initial round of stimulus checks were distributed and promoted its cash-back credit card “for times like these.” And it’s not just brands—it’s their representatives. They are guiding customers through sometimes complex processes, such as online banking and getting PPP loans.
Now is a good time for you to tap relevant platforms to engage consumers. One issuer’s social campaign featured their employees working from home to safely support their customers. Another example is TikTok partnering with a bank to encourage 2020 graduates to make and share videos.
Change your channel mix
With consumers at home, they are spending more time on digital media like streaming, smartphones and Internet content, according to an Advertiser Perceptions’ survey of U.S. marketers in March. You may want to adjust and consolidate channels. Comperemedia reported that in April, credit card marketers reintroduced channels with high activity during social distancing: display and online video channels. Lenders are using social media to broaden outreach of loan use cases.
Banks are continuing their close relationship with paid Facebook to provide agile updates. The top-spending investment firms reported more than 500% increases in TV, print and Facebook, based on Comperemedia data. Paid social is a budget-friendly way for you to keep your brand front and center and promote your digital offerings. And channels like Facebook provide higher CPMs than display and will be worth the price of conversion.
Plan to get back to business
The initial shock of COVID-19 has been challenging for every marketer. However, there’s reason to be optimistic. More than half of advertisers expect the ad-spending recovery to begin in the third quarter, according to an Advertiser Perceptions report1.
Comperemedia expects some sectors will go back to normal faster than others. Some advice:
- Lenders will likely want to prioritize cross-sell offers to their most credit-worthy customers. You should use email and direct mail to convey exclusivity.
- Challenger banks should stay loud as consumers shift their emphasis towards saving. Bonus offers may increase as the space gets more competitive.
- Investment marketers should continue to inspire and motivate customers to stay the course, with an emphasis on long-term strategy in ad copy with incentives to activate.
- Credit card marketers: Keep tweaking rewards to existing customers and closely monitor consumer spending habits. Now is also the time for issuers to promote contactless payment features.
In this changed world, consumers want to know that you’re paying attention to how COVID-19 is impacting them on a personal level. Stay relevant, appropriate and empathetic as you shift your message to them. Keep in mind that how your company responds when your customers need you the most is how they’ll remember you. Give your customers a positive experience now, and you’ll build a firm foundation for the future.
While marketing ROI might be lower now, brands who get this right will gain long-lasting loyalty. Remember the adage: It’s less expensive to retain a customer than acquire one. For more information about how we can help your company, please visit our COVID-19 resources or learn how financing insights can fuel your marketing.