What's the importance of customer retention in financial marketing?
If there’s anything that the housing crisis of 2008 and the COVID-19 pandemic of 2020 have taught us, it’s that the economy is anything but predictable. The prevailing sentiment of economists and financial analysts is that recessions are an unavoidable part of a capitalist economy. There are numerous theories to explain why recessions occur.
Some explanations turn to psychological factors and suggest that consumers may succumb to sentiments like optimism or pessimism, which can cause market bubbles to burst. Others view recessions in purely financial terms and focus on the influences of central banking and monetary policy. Finally, even others center on the concept of economic shocks. As is the case with the global pandemic of 2020, these theories claim that random events such as wars or epidemics impact production, demand, and the costs of goods and commodities.
The verdict may still be out on whether recessions are logically inevitable. But for now, they’re a fixture of modern economics—and it’s inevitable that the economy has its ebbs and flows. Without leaning too hard into doom-and-gloom prophesying, evidence shows that recessions occur every decade or so. And while contractions follow periods of strong growth, evidence shows that the economy bounces back and also exhibits growth following recessions.
What does this mean for your financial marketing team?
Whether you’re a regional credit union or a burgeoning fintech startup, it’s important to invest in sales and marketing tactics that anticipate and account for change. Perhaps you’re familiar with the marketing adage that acquiring a new customer costs more than retaining an existing one.
It’s true that existing customers are more profitable than new ones. In addition to building your brand, loyal customers drive more margin over time.
This rings true in times of global recession. According to McKinsey, the 2020 coronavirus pandemic led to five fundamental shifts, including a blow to customer loyalty. With pressures on household income, consumers started trying new brands and channels and seeking value and convenience. In fact, 73% of US consumers changed stores, brands, or the way they shop.
As financial marketers who keep a close eye on ROI, this stat may be alarming (but perhaps not surprising). What this suggests is that customer retention may be one of the smartest marketing tactics for financial institutions to lean on, no matter the state of the economy.
Drive customer retention for your financial marketing team.
While it’s impossible to predict the future, investing in digital marketing right now can help you ensure that your financial brand is on top when spending is high—and safe when spending is low. This guide discusses how investing in digital marketing can help:
- Build trust with current and prospective customers
- Keep your brand top of mind during times of uncertainty
- Meet new customers when they’re ready to begin shopping again
It’s true that you cannot sway public trends. And the economy is always subject to fluctuations. But there are measures you can take to ensure you’re primed for the future. To stay competitive, marketers can educate consumers, build brand awareness, and nurture existing relationships.
Stay competitive with digital marketing.
This guide will teach you which tactics help your financial organization stay competitive—no matter the state of the economy. Learn how to improve customer retention today.