Imagine a product category that needs no concept-sell. Every citizen of the world needs it in fact, cannot live without it. The worlds best brands have been propagating its advantages, since time immemorial. It is one of the categories with the highest ad spends and still, its penetration levels are abysmally low. Welcome to the world of money.
Lets take the example of the life insurance industry. After more than 50 years, with 22 leading brands from across the world, we have a penetration of less than 15% of household savings. Similarly, in the case of mutual funds with nearly 50 years of existence we today have 38 leading brands and yet the penetration is less than 5%.
If we contextualise the current size of this industry against the 1.2 billion India opportunities, it is important to acknowledge that so far collectively, only a few spoonfuls are being harvested, with an ocean out there waiting to be tapped.
Why has the penetration-meter not moved as fast as it should have It is time we invest adequate time to better understand our prospective customer and work around him/ her buying behaviour and then decide how to connect with him/her. Most Indians prefer to park their hard earned monies in traditional instruments. Consequently it depreciates by the day, thanks to inflation and taxation.
I believe that todays Indian the global aspiring Indian is brimming with confidence and optimism. He is ready to take on the world. But when he wears the hat of a financial consumer the same person is financially uninformed or ignorant. A financial simpleton, why else would he let his savings get depleted How would you explain a phenomena where consumers buy insurance policies to merely save taxes and not adequately protect themselves or invest for key milestones Why does he invest in the stock market at its peak Just as he gets excited by a sale, why does he not invest when the market is low and the shares are going relatively cheap The examples are many, but the take-home remains he needs to be enlightened. He needs someone to hold his hand and guide him.
With so many financial services categories, brands and products all promising to meet all the financial needs of our customer he is confused and afraid. Rather than take a step towards the unknown, he is quite comfortable with disproportionately high amounts of his earnings lying in instruments that may not even help him meet his todays needs forget tomorrows. As an industry and customer observer, I believe the magic formula that will help us open the doors to this land of gold rests on a few very basic tenets that have possibly eluded this particular category.
We need to keep the customer at the centre of all that we plan and do. The customer is seeking solutions to his felt and unfelt needs. Not mere (complex) products. Recognising that our customer is unaware, we need to keep it simple the products, the communication, et al. It is necessary to tell him how it can play a critical role in his life. With financial services, customers are willing to invest with someone they trust and know. Thus it would pay off to not only retain your customer but also grow and nurture the relationship.
It is critical that we step into the shoes of the consumer, to better understand his perception barriers to this category. And to address them in his language. This will automatically help us challenge past practices, while discovering newer ways to attract, and grow our customer base.
The chosen strategy is to provoke mass India, in an empathetic manner, into realising the importance and relevance of financial solutions in their lives. It is near impossible for one company or brand to singularly take on this humongous challenge and convert it into an opportunity for themselves. We can only hope to beat the trend of the last many decades and expand the market with the help of every brand, working individually and collectively, towards our chosen destination of a financially knowledgeable nation.
The writer is chief marketing officer, financial services, Aditya Birla Group