Banks: Consumers Fearing Job Loss May Be Great Prospects
Counterintuitive for financial services marketers, sure. But banks could really benefit from targeting consumers who are afraid of losing their jobs and never recovering from the Great Recession, because that’s 33 percent of Americans right now, research shows.
Many FinServ marketers target consumers who are on solid financial ground and tend to avoid the more at-risk ones, especially after subprime lending got much of the credit for causing the Great Recession. But in this case, the financial risk for institutions may not be so dire — because those consumers are still employed, according to a survey conducted by EMC Research for Country Financial, a group of U.S. insurance and financial services companies. CNBC detailed the research in an article published on Thursday.
About 33 percent of Americans say they haven’t yet recovered from the Great Recession and fear that they never will. About 39 percent believe there'll be another recession within the next three years (Opens as a PDF). Plus, “one-third of Americans in the survey said the job market is the top concern affecting their financial security,” reads the article.
Target Marketing believes the research reveals some opportunities for financial services professionals:
Create Messaging Around Saving
Many Americans told researchers they have no safety net.
“Women, African-Americans and low-income people have taken the hardest hit, with 25 percent of women, 26 percent of African-Americans and 37 percent of those earning less than $30,000 per year saying they would not be able to pay their bills within one month of being unemployed,” CNBC summarizes.
To create more financial security for themselves, they can save. And 66 percent of those surveyed told researchers they did believe their fates were in their own hands.
FinServ marketers could start with this comment from certified financial planner Victoria Fillet, founder of Blueprint Financial Planning in Hoboken, N.J.
"If you're not saving, start to save even if it's a dollar a day," she said to CNBC. "It'll give you a sense of accomplishment and encouragement that'll get you started on the right road.”
Then if this large group of Americans does encounter unemployment, there’ll be a safety net that financial services marketers helped them build. So at the next job, they’ll remember their banking friends.
Create Content About How to Pay Down Debt
Fillet tells CNBC that paying down debt a dollar at a time can also boost confidence for this apprehensive population.
But sometimes, the debt payoffs need to be more than $1.
In those instances, this consumer segment may need to chop up credit cards and go on payment plans facilitated by credit counseling services.
The CNBC article continues:
One of the best ways to improve financial stability is to reduce dependency on credit, said Bruce McClary, spokesman for the National Foundation for Credit Counseling.
"Getting debt under control allows people to turn attention on growing savings for emergencies, short-term goals and a secure retirement," McClary said.
Offer Advice on Maintaining a Budget
This is probably where financial services marketers can gain the most — when these consumers-turned-customers are back on firm economic footing.
As McClary points out, these consumers will then open bank accounts for rainy days and short-term goals, as well as 401Ks.
Plus, there are opportunities here to target the other 66 percent, because many of those Americans aren’t planning for retirement, either.
“EBRI's survey finds that 47 percent of American workers have less than $25,000 set aside for retirement,” reports the Motley Fool in April. “And while a separate PricewaterhouseCoopers survey shows that older workers have more money set aside, their savings are likely to come up short in retirement, too. According to PWC, about half of all Baby Boomers have less than $100,000 in retirement savings and nearly one-third of them have less than $50,000.”
FinServ marketers can tell consumers more about how withdrawals, forgone employer matches and costly fees can whittle down some of those retirement funds, Nasdaq reports on Thursday.
What do you think, marketers?
Please respond in the comments section below.
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