We are, in many ways, embroiled in an age of technological transformation — with driverless cars hitting the streets, innovative treatments offering potential cures to devastating diseases, and drones moving from the battlefield to home delivery. But two of the areas in which some of the most significant, and perhaps underrated, changes are taking place happen to be personal finance and marketing.
Strides in both segments have been driven by broader technological shifts as the combination of big-data analysis and ubiquitous Internet access have made it more efficient to buy anything — whether it be sneakers or complex fiscal derivatives — anytime, anywhere. Neither the overlaps nor the learning opportunities end there, however.
Marketing professionals can actually benefit a great deal from following trends within the financial sector and gleaning insights into the contents of people’s wallets as well as the collective consumer psyche in the aftermath of the Great Recession.
More specifically, here are five important personal finance takeaways that marketers should consider incorporating into their budget allocation and advertising strategy moving forward.
1. Consumers Are Being Encouraged to Spend, but the Party Has an Expiration Date
The financial strain of the housing market collapse seems to be in the average American consumer’s rearview mirror, despite world economies seemingly unable to kick into gear with any consistency. A variety of factors have conspired to create this flush feeling, with the most important being low gas prices borne from a global production glut, historically low interest rates that discourage saving, and the simple passage of time.
But while customers may feel free to throw cash around in the short term, marketers must understand that a tipping point waits ahead. Credit card debt trends indicate that consumers did not internalize Great Recession lessons about the dangers of overleveraging, and we are again piling on more debt than we can afford to pay back — especially if the economy takes a turn for the worse.
2. Soothe the Raw Wounds of the Consumer Psyche
The same pain and suffering that helped spawn Occupy Wall Street’s assault on the establishment are still alive in the hearts and minds of the general populace. The country’s corporate infrastructure, financial institutions in particular, has understandably been vilified for the widespread layoffs and foreclosures that resulted from runaway risk-taking and opacity.
Some might consider this reinvigorated distrust of “The Man” to be a distinct negative for marketers, impeding the internalization of carefully crafted brand messaging. However, the most creative companies will understand this viewpoint and use it as a point of differentiation between their firms and larger competitors.
Positioning your services as being the solution to the backhanded profiteering of recent years, for instance, or establishing yourself as an option of the people for the people could enable your company to cost-effectively steal market share, thus promoting inexpensive growth at a time when large publicly traded companies are reeling.
The other side of this issue is security. While payments fraud and identity theft rates are actually quite low in the grand scheme of things, falling victim to these injustices is among consumers’ largest fears. As a result, investing more in security infrastructure than traditional marketing now may enable you to avoid a very costly public-image problem later.
3. Shoppers Embrace Payment Variety and So Should You
How, where, and when people pay for things have evolved significantly in recent years. Much as horses, bayonets, and warships have been de-emphasized by the military over the years, checks and cash payments are being pushed aside by the likes of credit cards, prepaid cards, gift cards, and various mobile applications.
Rather than fight this progression, merchants should welcome it as a way to attract a new generation of consumers. That means companies should strive to accept as many different forms of payment as possible and then market this as a point of differentiation. The mobile payments space in particular is still especially fragmented, with merchant adoption and consumer awareness among the biggest impediments, and that should give you a nice opportunity to negotiate between providers.
4. Don’t Foot Apple Pay’s Marketing Bill
Despite all the discussion about the dangers of corporations that are too big to fail, new-age monopolies appear to be emerging within the personal finance space. Similar to Amazon’s quest to destroy brick-and-mortar retail, Apple and Google seem intent on dominating the logistics of spending.
So, while accepting customers who wish to check out with Apple Pay is advisable, paying to carry the service’s banner is not. Numerous banks have teamed with the tech company to create co-branded advertisements highlighting how a given institution’s products are compatible with the new mobile wallet. This is a short-sighted approach that underestimates Apple’s wide-reaching ambitions, and merchants should concertedly avoid embracing the same pitfall with either Apple Pay or Google Wallet.
5. Twitter Is Out of Favor
Once small-business marketers accept the value of Web and mobile advertising — no small feat in many cases — they often have trouble determining which outlets deserve the bulk of their budget. Well, if the stock market is any judge, it seems that Facebook is now a far safer bet than the once-red-hot Twitter.
While Facebook’s stock price has risen 58% since January 2014, Twitter’s has fallen 63% — largely due to questions of monetization borne from a problematic advertising platform. And with Facebook-owned Instagram now the preferred choice among America’s youth, it makes sense to bet on the favorite in this social media matchup rather than what could prove to be a flash in the pan.
Ultimately, the exact manner in which you act on these cross-market trends will differ based on your company’s size, sector, and short-term priorities. But these are issues that clearly cannot be ignored, especially with small-business competition swollen from years of traditional employment insecurity and our cultural infatuation with entrepreneurship.