The Dragon’s Den will show you that it is a tall order to come up with a profitable, new idea. It is almost always costly to make it work, and it can be wholly unnecessary. A more successful route to marketing innovation can be to think differently about things you already do.
Recently, a brothel in Cologne offered free drinks and free entry for life to anyone willing to have its name tattooed on their arm. Apparently their tattooist is now working double shifts! It has proven more popular, and more costly, than another recent campaign, offering half-price afternoon sex to pensioners. In this article, we will look at some examples of innovation a bit closer to home in the UK financial services industry.
For advisers, innovation can mean diversifying into areas new to you. At a Sesame roadshow earlier this year, we met an adviser who had found a way to use a utilities agency as a lead generation tool for mortgage leads. Having successfully obtained an agency agreement, the adviser decided to write to his client base to announce his new service. The response was fantastic, but not in relation to his new utilities proposition. What he found was that his clients got back in touch about their mortgage needs. Not only that, but they also started referring friends and family. A great example of how marketing action can produce unexpected results.
New entrants and new sectors are often interesting to watch. Some ‘newbies’ lack awareness of regulatory requirements imposed not only by the FSA, ASA and OFT, but also those specific to different marketing disciplines. Whether it is small print requirements on printed adverts, list management in email campaigns, or control mechanisms to monitor campaign success, there are pitfalls and opportunities, awareness of which is important.
Previously, marketing innovation in our industry was perhaps best showcased at
Mortgage Business Expos, particularly with intermediary-focused firms without branch networks investing heavily to appear significant. Exhibition stands got bigger and braver year after year; five-figure prizes were given away and the alcohol flowed freely.
But we have sobered up since then. If anything, we are nursing the hangover.
Most firms of all sizes have had to scale back marketing activities, as with all ‘luxuries’.
Also, ‘unique selling propositions’ are less easily defined when cautious underwriting slows down application to completion time, and when risk averse policies make products less accessible, for example. There is less for providers to boast about to advisers, and in turn for advisers to offer their clients.
The target market has changed too, with consumers now less trusting of the financial sector. Whether the costly rebrands of major institutions represent changes of substance, or merely a lick of paint to shed the negative associations and mistrust of old, only time will tell. So the target market and the messages are different, there is less money being spent on marketing and fewer marketing personnel in the organisation, as they are among the first to go in a recession.
Technology can help: it is a key driver of innovation. Thankfully, this is alive and well, offering opportunities to providers, advisers and consumers alike.
With sourcing systems now exposed to the client, and adviser systems advancing rapidly, the sourcing system market is more interesting now than throughout the boom years, where the duopoly of Trigold and Mortgage Brain dominated. Though that duopoly remains, the pace of change, and quality of competition can only be good for advisers. Orbiter and Edge are cases in point, as new, user-friendly, technically advanced sourcing systems available free of charge. Evaluate offers an alternative model that involves paying a fee, but enables advisers to effectively have their own direct to consumer sourcing system. Your very own moneysupermarket? Who would have thought that possible a few years ago?
Equally, the collapse of many networks created an opportunity seized by new entrant
Adviser Matrix, which helps advisers compare networks – ideal for those whose networks have collapsed, or directly authorised advisers looking for a new home. A simple solution for a common problem, this free service is yet another example of innovation in the current climate.
Marketing Innovation Forum, which was launched earlier this year, lets advisers communicate the many, varied ways in which they are meeting today’s challenges. There have been some amazing success stories shared in the forums. One claims to have harnessed technology to enable an individual adviser to handle 100 enquiries a week. Amazing if true.
Lead generation is probably the most hotly debated topic on our discussion forums. One creative approach relates to leads that do not convert. First-time buyer leads have been nigh on impossible to convert in the current market, which made their price drop dramatically. Most advisers have shunned these leads, but some have been taking a longer-term view, buying them up and building their client database for the future. It is a brave and uncertain strategy that involves up-front investment, but it may prove a masterstroke. Innovation is about bravery as well as creative thinking.
It is refreshing to hear of successes and an education to hear of failures in the current climate. Innovation can take many forms, and a little imagination goes a long way.
Julian Wells and Derek McGuire are founders and directors of Marketing Innovation Forum