Rise of Online Finance Killing Off Loyalty
Online financial consumers are more empowered and less loyal to specific providers, according to a survey from Yahoo! and OgilvyOne.
The migration of financial services to the Web has empowered consumers to a degree that marketers should alter their acquisition strategies. That’s the key finding of a survey commissioned by Yahoo and OgilvyOne Worldwide and conducted by Forrester Research and Flamingo International. Yahoo presents the research today at a summit for financial marketers in New York.
The increased ease with which people can manage their money online has created “additional pressure to address a potentially more knowledgeable consumer, one who will demand a greater burden of proof before making a purchase decision,” said Andy Jones, senior partner and head of planning for OgilvyOne New York, in a statement.
As with many segments, the rapid migration to self-managed online financial services has led to a drop in loyalty to specific providers, according to the study.
“As marketers, we need to demonstrate superior understanding of our target consumers’ needs and sharpen the message if we are to drive incremental behavior,” Jones said.
The survey was conducted in April 2005. The quantitative portion polled 2,700 online adults, and the qualitative portion quizzed 10 couples and eight individuals.
Among the study’s findings is that the Web’s strong role in consumers’ financial decisions is making younger segments more lucrative targets for financial marketers. It found online consumers under 40 pose the biggest opportunity to financial marketers, since these individuals continually add products throughout the later stages of their lives.
An increasing number of consumers are using the Web to monitor accounts, make stock trades and research financial products. Activities still undertaken in person include larger items like loan application and the purchase of insurance policies. “People still have questions,” said Richard Kosinski, Yahoo’s category development officer for business and finance. “They want to feel comfortable, and handle things live or over the telephone.”
He added security fears affect some online activity with financial institutions, but that these issues “do not keep people from accessing their accounts online, especially with the under-40 segment.”
