That Was Then, This Is Now

Whether they sold insurance, asset and investment management, or retirement accounts, most companies in the financial services industry seemed to have been in a deep freeze when it came to energetic promotion. They often didn’t even know who their customers were, so selling products to them was handled through telemarketing or toll-free hot lines.

That was then, this is now. Once-reluctant financial services firms are using a wide arsenal of new tools and channels to get the job done, relying primarily on customized, personal targeting.

For Stephen Cone, president of retail and corporation marketing at Boston-based Fidelity Investments Inc., the first step in bringing the company up to promo speed was personalization. When Cone first came to Fidelity in February 1998 after a stint as chief marketing officer for KeyCorp, one of the first things he did was to put coffee bars in all Fidelity branches. His next measure was a little more sophisticated: He sent Fidelity diving directly into database marketing, switching the company’s focus from products to customers, and imparting a personal tone to all direct-mail pitches.

In Cone’s view, dialogue between customers and sellers is key. He believes there should always be an explicit understanding in the buyer-seller exchange. At Fidelity, that translated into paying customers a reward for sharing their investment preferences.

Scudder Kidder, Boston, which historically never actively used customer dialogue or datebase marketing, has come to the same conclusion. It also has decided that its promotional future lay on the Web, and thus set up its first Internet site in January to provide a framework for building the company’s brand, according to Greg Titus, vp and director of Scudder’s Electronic Commerce Group. To do so, Scudder needed to develop promotions that reinforced what was good about the brand image, in order to activate people “to do what they needed to do” – buy more Scudder products.

The site Scudder built was user-friendly, but allowed the company to extract data to immediately create consumer profiles. “We see the types of things you own, whether you’re interested in stocks or bonds or funds, and if you have external holdings like real estate,” Titus says. That information lets the company sharply target offers, Titus says.

Scudder’s first Web promo was conducted for its Preferred Investment Account program, which is aimed at customers who already own $50,000 in products. Consumers who purchased the account were offered an exemption from annual fees and transaction fees on certain mutual funds, a free checking account, and a 10-percent discount on broker fees. They also were offered 10-percent discounts on any stock trades placed through Scudder’s automated telephone service, and free bill-payment expense-tracking services.

Back at Fidelity, Cone broke up customers into groups dissected by age and asset-level. Products were offered at various discounts to appeal to each group’s preferences. “I am interested in anything that makes marketing personal,” says Cone.