Study: Financial Firms Targeting the Rich Need Brick-and-Click Combo

Although many financial services firms have revamped their marketing campaigns around “fear-inducing” messages, in an effort to attract and retain clients, a study released Wednesday by Forrester Research finds that these companies need to take a markedly different approach when dealing with affluent investors, including fully integrating their online and offline offerings.

While the current round of economic volatility has caused average consumers to scale back their investing plans and trading habits, Forrester said consumers who have investable assets of at least US$1 million are confident about the state of the economy and the markets, secure in their wealth, and optimistic about technology.

As a result, the Cambridge, Massachusetts-based research firm said companies stand to gain market share by promoting a cohesive, multichannel brand experience, now that affluent investors have a greater affinity for using the Internet to manage their finances.

Web Currency

In Forrester’s survey of over 2,500 affluent U.S. and Canadian households, 44 percent of the respondents visit their financial providers’ Web sites. By comparison, one-quarter of those with fewer investable assets do so.

Among the primary drivers of online activity are accessibility to information and customer service, Forrester said. Offering relevant, customized advice on subjects ranging from stock selection to tax planning also aids customer retention, the research firm said.

According to the study, however, millionaires expect this advice to be offered viamultiple channels, with 84 percent of those surveyed reporting that they expect online and offline guidance to supplement each other.

Loyalty Plan

Another key component of gaining market share is promoting consumer loyalty. To increase loyalty, companies must go back to basics and work to understand their customers’ experiences, said Forrester.

To this end, the study found that rather than gauging a firm’s performanceacross individual channels, customers mesh all of their experiences –ranging from online statements to branch visits — into an overall impressionof the financial institution.

“The bottom line is that retaining customers costs less than acquisition,and loyal customers buy more frequently and spend more,” said Forrestersenior analyst Ekaterina O. Walsh. “Moreover, loyal customers are a firm’sbest acquisition vehicle.”

Forrester found that affluent customers whose financial providers have multichannel integration of two or more services are 25 percent more likely to recommend the firm to others and 24 percent less likely to leave.

Great Expectations

“Financial firms will succeed by focusing on the unique benefits of their services and integrating their delivery based on their target market’s expectations,” said the study.

Despite the fact that customers evaluate a firm based on its overalloperations, Forrester said customers do have expectations for each interaction.

“Understanding these experiences will enable financial providers to promotethe unique benefit of each type of customer experience — from theconvenience of online statements to the privacy offered in branches –through a unified message,” Forrester said.

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