The Promotion of Intangible Financial Services Through Event Marketing - Coursework Example

?Running Head: Marketing The Promotion of Intangible Financial Products/Services through Event Marketing s Submission Table of Contents Section Title Page Number Introduction 3 Promoting Intangible Products through Event Marketing 4 The Success of Event Marketing in Promoting Bank Products/Services 8 Building Customer Loyalty through Event Marketing 9 Discussions and Conclusions 13 References 14 Introduction It is very challenging to market concrete or tangible products, but the challenge increases twofold when intangible products/services, such as those of the financial sector, are concerned. In marketing intangible products/services, organizations should identify and understand the individual needs and behavior of customers. Nowadays, consumers are pressuring the banking sector to cater to their intangible demands at the time when they are most prepared to receive intangible services/products. Consumers are seeking for more intangible value, while the banking sector is looking for greater, more productive means to market their intangible products/services to customers. This pursuit leads the banking sector to the path of event marketing, which is a very valuable, needs-based method to satisfy customers’ intangible needs and demands. Event marketing is derived from the observation of the behavior of customers through thorough data examination. These customer patterns may embody a time of need of a customer, which, once identified in a prompt way, tenders a vast prospect to provide intangible products/services to that customer (Harrison, 2000). An increasing number of banking organizations are already generating substantial returns from investing on event marketing activities. Numerous other financial organizations perform analytic oriented targeting or also referred to as ‘triggered marketing’ and could even apply the same terms (Mayar & Uffenheimer, 2007). The capability to keep in touch or communicate with each customer promptly or relevantly entails a basis of significant information that is novel and is connected directly and routinely to service and sales channels (Mayar & Uffenheimer, 2007). This is the setting that motivates the biggest profits. The banking sector understands that their most valuable advantage is their customers. It is much profitable or gainful to strengthen the bond with present customers and prevent deficiency, in contrast to attracting new customers (Ennew & Waite, 2006). This essay will discuss the promotion of intangible products/services, such as those of the banking sector, through event marketing. Promoting Intangible Products through Event Marketing Intangible products, such as information, are a very extensive concept. Situated in the current terminology, a primary point of similarity in the marketing of tangibles and intangibles gravitate around the extent of intangibility innate in both forms (Gummesson, 2002). Marketing is focused on drawing the attention and sustaining customers. The intangibility level of product has its biggest impact in the goal of attracting customers. When it concerns keeping customers, intangible products come across quite specific setbacks (Kitchen & De Pelsmacker, 2004). However, these setbacks are minimized through event marketing. Event marketing is rooted in regularly and methodically monitoring full customer behavior and patters to determine those times where there is a chance to improve a rapport or when a customer is most prepared to reach a choice of intangible product/service purchase (Gummesson, 2002). The objective of event marketing is to facilitate communication in an appropriate and prompt way with customers and to develop services, marketing, and sales around their particular requirements. Event marketing normally makes use of the database and capably rakes through the customer folders to choose the customers with the recognized triggers (Mayar & Uffenheimer, 2007). Triggers, in marketing, are employed to routinely communicate suggestions, offers, relevant messages, or other conduct toward the individual customer at the best possible moment, founded on any number of aspects (Mayar & Uffenheimer, 2007). These chosen customers are given priority on the basis of a recognized set of standards and contained in the lists that are dispatched to various channels, such as branches, ATMs, call centers, and so on, for an update (Harrison, 2000). With regard to the function of customer representatives, for instance, they then update with the customer at the needed time. Ultimately, in order to constantly enhance the success of event marketing in promoting these intangible products/services, there is a ring for the channel to give comment about the efficacy and success of the processes (Harrison, 2000). Programs, in response to events, frequently may lead to multi-level communication schemes and may be implemented across different channels (Ennew & Waite, 2006). The communication with a customer has to occur once the customer is prepared for it; and it could be extended over quite a few interactions and through different sources (Mayar & Uffenheimer, 2007). For instance, take into account the scenario when a trend of constant inadequate funds agreements arises with a certain end user at the ATM. Afterward, information may be showed at the ATM to determine if the customer requires a customer representative to communicate with him/her (Mayar & Uffenheimer, 2007). If the customer did not react or respond to that proposal and further inadequate funds agreements arise, the bank may make a decision to dispatch an electronic mail to that customer to determine if s/he plans to go to a branch near him/her to talk about how the bank can more appropriately cater to his/her financial requirements. This information, depending on the response and demand of the customer, may lead to a constant communication with the customer face to face or over the phone. In the contemporary period of vast marketing campaigns, companies are looking for more needs-based, effective strategies of keeping in touch with customers. Concurrently, customers, confronted with time-pressured lifestyles, are hampering communications that are not pertinent to their pressing needs (Hoyle, 2002). Such an explosion of marketing information has deadened the customer to these messages for intangible products/services, making them disappointed with organizations that constantly market those intangible products/services to them. Due to this overwhelming information, it is not unexpected that a research reveals that 54 percent of customers admit they shun intangible products/services that engulf them with promotion and marketing (Mayar & Uffenheimer, 2007). Customers are showing their irritability with the unwanted marketing messages by demanding for a legal action to regulated direct marketing. What is required is a campaign to keep in touch with customers when they have to know the message (Hoyler, 2002). Appropriateness will not just enhance success but will save the time and effort of customers, their most important asset. Conventional direct marketing campaigns for intangible products/services nowadays are generating ineffective outcomes. That negative rate of response is compelling the banking sector to seek for more improvement and ingenuity, toward marketing campaigns that provide the relevant intangible product/service at the appropriate time and in the appropriate place (Ennew & Waite, 2006). They are seeking for those campaigns that alter the response of customers from negative to positive. For example, imagine that a customer gets hold of a big sum of cash that has been deposited in this bank account. She makes a decision to put aside the money for the education of her young children and decides to apply for a brokerage account within the next two days and make a fund transfer to that bank account. In this scenario, the financial organization with the bank account should gather two important details: this is bigger than average deposit, and the customer is a parent. Equipped with those details, the financial organization knows that the big sum of cash will perhaps not remain in the bank account for so long (Mayar & Uffenheimer, 2007). As a result, these pieces of information are transferred to a customer representative to communicate with the customer as soon as possible. The customer representative communicates with the customer to confirm the big deposit and afterward suggest assisting with any important financial requirements. Afterwards, if the customer representative discovers that the bank user wants to put aside for college and supposing that the financial organization has a viable proposal, he informs the user about the college saving plan of the bank (Mayar & Uffenheimer, 2007). The capability of identifying important events, such as big deposits, evaluate their value in the perspective of a particular customer, and through a prompt response discover and cater to customer requirements is the significance of event marketing (Hoyle, 2002). A current study of the American Bankers Association showed that the supposed ranking given to the success of present-day direct marketing campaign is quite low (Mayar & Uffenheimer, 2007). In the current setting, where high return on investment in marketing is crucial, this is turning into a challenge within numerous companies. It is relevant to mention that in spite of the weak outcomes of direct marketing campaigns for intangible products/services, the banking sector keeps on allocating resources to them (Pezzullo, 1998). A McKinsey and Company study reports a considerable boost in direct marketing expenditure by banks of 31 percent compound annual growth rate (CAGR) (Mayar & Uffenheimer, 2007). Nevertheless, with this boost in spending, the intangible products-per-customer did not vary, remaining at roughly two intangible products per customer. In a line of business where cross selling to end users is a main goal to stimulate natural progress, this is a revealing figure on the declining return of an enlarged investment (Rogers, 2001). Analyzing these patterns, it is safe to assume that these campaigns may not be catering to the actual service and financial requirements of customers. This was additionally supported by a study conducted in 2003 by The Economist Intelligence which assumed that companies do not categorize customers in accordance to their demands and needs (Mayar & Uffenheimer, 2007). This limitation leads to incapacity to promote intangible products/services to customers on the basis of their particular needs. Merely 12 percent of the companies in the study of The Economist (Mayar & Uffenheimer, 2007) suggested that they can categorize customers in accordance to their life stage and requirements. The Success of Event Marketing in Promoting Bank Products/Services As mentioned several times in the preceding sections, the needs of the customer, if satisfied at the appropriate time, would result in continuous gainful customer relationships. Aside from being eventful or active, customers struggle with major financial problems at various stages of their lives (Soares, 1991). A number of these more important issues may involve choosing the appropriate financial products/services or reaching the appropriate decisions in a domain of intangible products/services and significant cost and benefit trade-offs (Pezzullo, 1998). The objective of event marketing is to uncover or identify when these customer needs and demands emerge, and afterward to attempt to relevantly address them. When go-betweens are involved to communicate with end users, such as stockbrokers in the capital market and representatives of insurance, their requirements for open and relevant communication with customers is important, particularly around prompt communications with important customers (Ennew & Waite, 2006). These requirements, if dealt with appropriately, make the intermediary more satisfied and successful. Several of the major information a banking sector may take into account (Mayar & Huffenheimer, 2007, 8): (1) information around partial or imprecise application; (2) customer inquiries, feedback, or complaints; (3) rare amount of transaction; and (4) details around non-renewals. Furthermore, event marketing can be employed to enhance the communication between the agents and the banking sector. Building Customer Loyalty through Event Marketing Event marketing can be employed to cater to large numbers of service opportunities to enhance the loyalty and satisfaction of customers. There are numerous intangible service opportunities that event marketing can identify for programs. Some cases in point involve the following circumstances (Mayar & Uffenheimer, 2007, 8): (1) substantial alteration in account balances; (2) different customers open up communications for complains, inquiries, and so on; (3) delayed renewal of insurance plan; (4) customer is given a late charge; (5) customer encounters a substantial drop in the stock market; (6) customer is recompensed for a house damage; and (7) substantial recovery or deposit. All these sources are opportunities for the banking sector to communicate with their customers in a prompt and appropriate way, assuring those customers are contented with the products/services and possibly examining requirements for similar offerings. These intangible service opportunities provide vast opportunities to build customer loyalty. Triggers are grouped into three: simple, medium, and complex (Hoyle, 2002). Research carried out by Teradata Corporation and the foremost source of event marketing processes demonstrate that the most important triggers are usually complex ones that show particular customer requirements which frequently are identified by some kind of change (Mayar & Uffenheimer, 2007). It is vital to evaluate the importance of the triggers in relation to the customer demands and needs: more needs implies greater rate of success and, hence, value of the business (Mayar & Uffenheimer, 2007). The key triggers are those that show great customer requirement. Identifying important trends in customer behavior and analyzing them to understand the relevant events that took place usually necessitates a reasonable level of processing complexity (Pezzullo, 1998). For instance, analyzing an uncommon large sum of deposit should consider the relative level of wealth of the customer, complexity, duration of the bank account, past pattern of transactions, life stage, demographics, earlier responses to offerings, and other household factors (Wright, 1991). A particular amount of deposit may be uncommon for one person and usual for another. Another case in point is linked to the recurrence of inputting a wrong PIN at an ATM. It may identify a new customer who requires help, or to the requirement for an urgent fraud intervention process. Furthermore, when an event is interpreted, the preferred response to it may rely on different relevant factors: one bank user may want phone call, another electronic mail; at particular times a comeback would be postponed because the bank user has already been kept in touch with a lot of times over the past month (Mayar & Uffenheimer, 2007). This is the reason why it is important that companies respond to, analyze, and identify the portfolio of the complex, valuable triggers for effective event marketing programs. It is vital to make sure that event marketing campaigns can sustain complex triggers to identify the most valuable events and give precedence to the campaigns appropriately (Soares, 1991). It is important as well for event marketing campaigns to promptly determine these complex and valuable events to capitalize on the return on the investment in event marketing. The banking sector has become more and more interested in targeting their markets employing various forms of analysis, modeling, and segmentation strategies (Hoyle, 2002). These strategies present the framework for analyzing the identified customer triggers and identifying the possible value proposition connected to these triggers (Soares, 1991). To explain this argument, suppose life stage segmentation paradigms. Life stage paradigms present an effective procedure for matching propositions with those life events when customers are most probable to purchase financial products/services. Life stage segmentation modeling alongside event marketing offers an efficient means to provide wide-ranging proposals or alternatives when customers most need them (Mayar & Uffenheimer, 2007). For instance, when a person is on the verge of retirement and deposits a quite sizeable sum of funds. The life stage modeling should take into account the stage of retirement and the event marketing program should determine any uncommonly sizeable deposits. This provides an expanded banking firm the chance to give suggestion on the most favorable way to handle payouts from retirement sources, and the chance to build and reinforce loyalty by enhancing customer value. Customers, throughout their lifetimes, are predisposed to focus most of their financial purchase transactions on a quite small group of life episodes. This is due to the fact that at these events, such as retirement, people are more expected to assess their financial activities to know whether or not they have the correct weight of insurance, investment, or borrowing (Harrison, 2000). Hence, the integration of event marketing, and its analysis in accordance to the life stage of the customer, is quite effective (Hoyle, 2002). When merged with forceful market segmentation, life stage modeling, and other analytic procedures, event marketing can cultivate loyalty by expanding profound customer awareness to provide prompt and memorable intangible services and promotions (Gummesson, 2002). For instance, there are companies that employ the computerized event marketing program to dispatch a letter or phone customers who are near retirement to inform them of their alternatives when they retire and educate them of the pertinent available products/services (Gummesson, 2002). Majority of financial organizations have a rich repertoire of profitability information, purchase history, and demographic records that are employed to enhance customer value and paradigms of intangible product propensity will enable organizations to gain from most lucrative service prospects. Discussions and Conclusions The definitive high-quality event marketing program is to develop a campaign source able to formulate, generate, and implement a range of new programs, a source that can constantly provide, enhance, and monitor numerous existing programs in competition (Hoyle, 2002). A number of major financial organizations are by now operating from only such a source. These sources function in a mechanized manner enabling the marketing group to focus on new intangible products and services to further set apart from competitors (Pezzullo, 1998). Scholars and researchers have demonstrated that event marketing surpasses conventional types of direct marketing when it comes to promoting intangible products and services. At a time when customers are being barraged by marketing offers, event marketing embodies a vastly productive means to communicate with customers, precisely at the time when they need the intangible product/service the most. A powerful event marketing program regularly examines customer behavior all over the industry for transactions that confirm customers have needs for financial product/service. The banking sector are putting into effect event marketing programs to cater to their major problems related to customers, like attrition and balance reduction issues (Mayar & Uffenheimer, 2007). A number of financial companies have by now established event marketing sources and attained substantial business outcomes. And certainly, event marketing is becoming a viable need within an enlarging population of local markets. The designs behind event marketing are old. The banking sector should pay attention to their customers and be responsive before their competitors ruin their business operations. Similar to any strategic program, event marketing is effective because of its implementation. Beginning with the point of strategy, marketing managers have to be absolutely dedication to the vision of event marketing and afterwards initiate a large-scale change management attempt all over their financial organizations. The transition toward customer-oriented marketing through event marketing competencies is crucial, even though highly commensurate of the effort. References Ennew, C. & Waite, N. (2006). Financial Services Marketing: An international guide to principles and practice. Burlington, MA: Butterworth-Heinemann. Gummesson, E. (2002). Total Relationship Marketing: Marketing Strategy Moving from the 4ps—Product, Price, Promotion, Place—of Traditional Marketing Management to the 30rs—the Thirty Relationships—of a New Marketing Paradigm. Boston: Butterworth-Heinemann. Harrison, T. (2000). Financial services marketing. New York: Pearson Education. Hoyle, L. (2002). Event Marketing: How to Successfully Promote Events, Festivals, Conventions and Expositions. New York: Wiley. Kitchen, P. & De Pelsmacker, P. (2004). Integrated Marketing Communications: A Primer. London: Routledge. Mayar, V. & Uffenheimer, N. (2007). “Event-Based Marketing for Financial Services Optimizing Value from Customer Relationships,” Teradata Raising Intelligence, pp. 1-11. Pezzullo, M. (1998). Marketing Financial Services. New York: American Bankers Association. Rogers, S. (2001). Marketing Strategies, Tactics, and Techniques: A Handbook for Practitioners. Westport, CT: Quorum Books. Soares, E.J. (1991). Promotional Feats: The Role of Planned Events in the Marketing Communications Mix. New York: Quorum Books. Wright, D. (1991). Bank Marketing for the 90’s: New Ideas from 55 of the Best Marketers in Banking. New York: Wiley. Read More