The insights and recommendations that originate from market research can help companies like banks and credit unions create marketing strategies that nurture customers and improve the bottom line. Any business can increase its ROI through its efforts. You can use your own team, but you may also decide to outsource the process to a third-party firm.
There are lots of different ways to carry out market research, including but not limited to surveys, focus groups, product testing, and customer observation, and while traditional methods are still widely used, digital ones can reach larger and more diverse audiences.
A great market research plan starts with a strong objective that’s focused, measurable, and, last but not least, effective. In practical terms, there can be more than one objective, but too many are bad for productivity, and so are too few objectives – what matters is that you have a manageable number of market research objectives that aren’t mutually exclusive.
Objectives are the actions you and your team take to achieve your big-picture business goals, allowing you to move from collecting to using data about your target market. The following are a few examples of goals you can use in your endeavor:
Get Your Head Around Consumer Behavior and Preferences
When buying a financial product or service, people can be influenced by a plethora of factors: simple necessity, social/peer influence, or well-crafted marketing campaigns. Understanding consumer behavior is, therefore, a crucial step in the marketing process since it can help grow your business customer base and increase the frequency, loyalty, and dollar amount of the sales of current customers.
If you have different consumer groups within the target audience, take the time to learn about their specific traits and characteristics. Closely study consumer behavior to have an advantage over the competition by predicting when things are about to change rather than guessing using historical consumer trends and current market data.
Now, let’s talk about consumer preferences. As you might already know, people have subjective tastes, likes and dislikes, and predispositions, so when crafting or marketing a financial product to your target audience, bear in mind their preferences to secure the best possible results.
Financial institutions must leverage data analytics to understand consumer preferences that can help them provide relevant and timely offers. All companies, especially banks, should say yes to the technologies once considered niche that are helpful for learning what customers want and mitigating possible issues that could lead to dissatisfaction, continuing to survive in the industry.
Investigate The Nature of The Shifting Market Environment
Competitive analysis is one of the most pivotal aspects of market research, and it calls for investigating your competitors to find out what they’re up to and what their plans for tomorrow are. To rephrase, it helps you understand other companies’ position in the market, determine their strengths and weaknesses (compared to you, of course), and see what customer needs are currently unfulfilled/undeserved.
You’ll want to know certain things about your competition – price, quality, location, convenience, product range, and customer service, to name a few. The facts are best understood in the context of a story, and the story provides structure to your point of view.
Make Sense of Digital Banking Adoption and Perceptions Among Gen Z Consumers
More and more financial institutions offer new, innovative digital tools that promise simplicity and convenience when it comes to budgeting, checking credit scores, or creating savings goals. The rise of digital banks – or neobanks, if you prefer – follows on from the decline in the presence of traditional banks, which aren’t strong enough and might soon become extinct because customers’ needs aren’t met with efficiency or personalization.
Digital banks use cloud computing to manage high volumes of transactions without difficulty, take advantage of AI to create a seamless digital journey, and incorporate multiple cybersecurity measures, including end-to-end encryption.
The attitudes of Gen Zers towards money and finances are strikingly different from those of older generations: they know what they want and will only do business with organizations that deliver it. People born between 1997 and 2012 grew up in the presence of digital technology (or the Information Age), and while they’re not unique in history, they represent a challenge to banks, which must think more strategically and adapt their offerings to this growing market.
The new generation must be evaluated from a different credit perspective to understand the bigger picture. Social media listening, online and mobile research, and focus groups are just some of the specific ways of deriving actionable insights that’ll shape your go-to approach, so you won’t be missing out on the chance to reach this highly valuable consumer group.
Maintain And Strengthen Customer Trust
People must be able to trust financial institutions to keep their money safe, protect their personal data, and deliver much-needed services to help them take control of their finances. Unfortunately, organizations struggle to earn high levels of trust, meaning they can’t attract or retain customers or even meet the credit needs of the communities they serve, and they do not put enough effort into understanding customers’ needs or acting in their best interests.
Most consumers are somewhat or very concerned about how financial institutions protect the safety of their holdings – money is a big deal, and people aren’t going to settle for any bank they stumble on. Other reasons why consumers are losing faith in the industry are greed and irresponsible lending practices, IT failures, PPI mis-selling, high borrowing rates, and the tiny, tiny, small print.
So, how do you convince people to answer a survey? Well, market research ranks high in terms of trust, so insights can be easily extracted from consumers, whether using online panels or social media sampling, but make sure you commit to ethical data sampling to avoid jeopardizing relationships.
Wrapping It Up
Throughout their journey, entrepreneurs in the financial services sector have to wear a bunch of different hats, and it’s easy for market research to take a back seat in the day-to-day operations of the business. Still, it’s one of the most important things you can control.
