By Tom Murray, Head of Product Strategy, Exaxe
In 21st century society, online social networks are where the family & friends circle and the Internet collide. The optimal way of penetrating the mass market is to try to leverage social networking to engage with the market in a way that reinforces their tendency to trust the circles they are within.
This is a whole new strategy for providers, most of whom have minimalist social media presences at the moment. Most corporate social networking strategies are primarily focused on mass marketing campaigns and brand protection.
However, social media remains a key way to engage with consumers and to leverage their social interactions to gain trust in the solution. In order to achieve this, new strategies are required which enable direct contact with the consumer via social networks and mobile platforms; the way that a majority of the new market prefer to communicate. Any company with a strong social network strategy will be able to leverage the consumers’ trust of their peer network to establish credibility with the target market.
Anytime / Anywhere
Use of mobile technology has now spread far further than was originally imagined. Across all age groups, usage of mobile phones has increased and the arrival of tablets has transformed the market dynamically. In 2011, 45% of British adults who accessed the Internet over a three-month period did it on their mobile phone. In particular, the key age group of 25-34 hit a usage rate of 65%. Although statistics are yet available for tablet usage in the UK, the sales growth seen globally in 2011 has been over 200% and the UK will almost certainly have followed that worldwide trend.
With the rapid expansion of usage across the age group who will benefit most for the auto-enrolment process, the opportunity to utilise these platforms to reach the mass market has become a real one. If this audience is to become interested in their own financial future, it is through modern media that it will be achieved.
Young people no longer have a concept of booking appointments weeks in advance and turning up to someone’s office to spend two hours engaged in conversation over a desk. When they want information to support a decision, they expect to have it immediately, even though this is unreasonable at times. However, this is the way that technology is taking them and it isn’t going to change.
So fulfilling the needs of the ‘right now’ generation is going to require an ability to engage with them across all platforms, particularly mobile. On the plus side for providers, while it means a new range of technologies, these are more cost effective and are probably the only way that this market can be profitably serviced, as face to face strategies are prohibitively expensive. So without this level of automation, strategies to build on the auto-enrolment process will undoubtedly fail.
Cross-selling opportunities
The goal of all auto-enrolment strategies is to build and maintain the customer base and cross-sell, this being the only way to cost-effectively service this market. Associated items such as ISAs and protection products have great possibilities for this market once they are engaged with a provider.
The ability to push messages across social media and to allow anytime / anywhere access to information and sales systems will be an essential part of bringing products to this market and raising the amount of financial cover held by the general population of the UK.
A marriage of social media and mobile technology will give vast access across cheaper media to this pool of potential purchasers and will be a big driver, not only in keeping the cost of sale down but, more importantly for the long term, keeping the cost of service low as well.
It also allows providers to leverage the trust that consumers have in the financial choices made by their friends and family and allows a rapid, virtual ‘word-of-mouth’ approach to succeed.
Given the rapidity of development for the mobile market, dynamic up to date apps can be produced at relatively low cost and upgraded regularly – an approach expected by the clientele and one which will allow rapid response to market and technology changes.
Conclusion
Auto-enrolment provides major challenges for providers and yet it is a tantalising new market ready to be sold financial products for the first time. Reaching this market requires a completely new strategy than before, which must embrace new technologies and new messages that will resonate with the ‘social’ generation.
Investment in the key technologies for socialising the long-term investment message will provide companies with a key differentiator in reaching this market. Without new strategies based on the social networks that people use and the new technologies they use, providers will unable to reach this market effectively.
Social networks and mobile technologies are rapidly changing the way people live in the UK, and all businesses need to adapt in order to survive in this new world. Those who ignore the changing social climate in the UK may well be left out in the cold.
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