What will financial services marketing look like after the crisis?
Key takeaways from our expert panel event
In the first of a new series of events, ‘A conversation with The Economist Group’, we invited a panel of experts from around the world for a fascinating discussion about financial services marketing in the current crisis.
“This is not a time to be quiet”
— Frank Cooper III, Global Chief Marketing Officer, BlackRock
Led by economist John Ferguson, we explored covid-19’s impact on the financial industry, where we currently stand and what it means for the future of marketing in the sector.
Our panel featured:
- John Ferguson, Director of Country Analysis, The Economist Intelligence Unit
- Frank Cooper III, Global Chief Marketing Officer, BlackRock
- Alison Harbert, Head of Client Marketing, Investec
- Dr. Winfried Daun, Group Head Advertising, Brand Strategy and Media, UBS
The current economic outlook
John Ferguson led the discussion in laying out where we currently stand economically.
“We are living in unprecedented times…As an economist for 10 years I’ve never seen numbers like this.”
The EIU forecasts 200 countries to ensure they understand the impact on a global scale and have been working hand-in-hand with their healthcare experts during the pandemic. It’s their informed opinion that a vaccine will not be available for at least 12 months, possibly not until the end of 2021. Covid-19 and its fallout is something the global economy, global businesses, multinationals etc will need to be dealing with and managing, for the next 12–18 months.
John and the EIU are predicting a global contraction of 3% possibly up to 4%, with this year:
- US economy contracting by 4% (a severe recession)
- German economy contracting by 6%
- France and UK economies contracting by 9%
- Global trade contracting by 15%
This has ramifications, in particular in the labour market and unemployment levels. John predicts the US unemployment rate to rise to 20% in Q2 and only slowly recover to 10% by the end of 2020. “That’s really pessimistic but it also tells you the severity of this crisis”.
What an economic recovery looks like
This is something The EIU has been talking to clients about a lot — what does a recovery look like? John confirmed to our audience that they are not expecting a V-shaped recovery which a lot of people have been referring to. The concept that ‘revenge consumption’ will fuel a V-shaped recovery is a good point, but John explained it really only applies to the people that have kept their jobs. Due to the expected high unemployment levels, revenge consumption won’t be enough and the EIU predicts recovery will take more of a U shape. In other words, it will be a slow recovery out of this crisis.
In terms of economic recovery, we should also keep our eye on the possibility of second and third waves. For global businesses, that’s the challenge they will need to manage over the next 12–18 months.
The broad impact on multinationals and non-financial corporates
Multinationals need to be prepared for the fact that global trade and supply chains are going to change. With the US and China trade war, combined with covid-19, part of the response from global companies will be to shorten and regionalise their supply chains. This is not ideal for costs but it will help global companies shield against risk and allow flexibility between regions.
Meanwhile bigger global companies in the non-financial sector will undertake strategic stockpiling. Companies used to utilise ‘just-in-time-processing’ to minimise costs but in this world of increasing risk and uncertainty, we’ll see stockpiling of parts and final goods to help companies deal with the complexities and the ups-and-downs of supply and demand.
With that global economic outlook set out, our panelists dove into the specifics of what this means for financial services marketing in the era of covid-19.
The concept of purpose
Frank Cooper III from Blackrock, responded to John’s outlook with a positive take: “The doom and gloom projection is something we should embrace…We have to embrace the pragmatism of pessimism…But we have to have the courage of optimism too.”
He detailed how a crisis reveals a company’s true authentic self. All the data and research he’s seen is that customers are expecting companies to step up and deal with this humanitarian crisis. That could be achieved through philanthropy or CSR but the power is if companies focus on their core reason for being and apply that to the crisis. “Now is the time to double down on purpose”.
The role of content
Dr. Winfried Daun of UBS explained that as we try to send out the right messages to communicate in this crisis, content becomes all the more important in engaging, entertaining and helping people. Relevance is now even more key than what it was.
The nature of content has not changed but it’s about delivering it in a way that suits the current way people consume and helps people address the concerns at the top of their minds.
Alison Harbert of Investec spoke to the audience about how a greater spotlight is now being shone on how timely you can be. Timelines have traditionally been longer but scenarios are now changing so rapidly that there isn’t the luxury of time. “Long-term opportunity is being superseded by the short-term necessity” she said, detailing how they’ve moved into a hyper-agile environment where they are so closely aligned to the business they are responding to on-the-day needs, rather than planning months ahead.
What brands should be thinking about in this current crisis
Brands should be thinking about how to communicate and express the company’s purpose first and foremost explained Frank. Start with your employees — every brand “needs to demonstrate they are protecting their employees — both the health but also the financial health of employees”. It is a signal of how people think about the brand overall.
“This is first a humanitarian crisis and second, an economic crisis”
This crisis is a chance for a brand to say ‘this is what we do and how we help people in the world’ and brands should communicate consistently and frequently. “This is not a time to be quiet” said Frank.
As marketers we can also add extraordinary value internally — we can help shape a company’s culture, using our unique insight to create a learning organisation.
Should brands be releasing specific covid-19 campaigns?
Yes, up to a point, Dr Winfried told the audience. Almost all companies are well-advised to say something otherwise they’ll appear tone deaf. The communication should be helpful to people in giving them answers to questions they may have, it should provide value and empathise.
It’s also acceptable for a brand to tell the market what it is doing within this crisis to help local communities and social causes, if that is in tune with the company’s purpose. “There’s value in telling your audience you are taking this crisis seriously.”
But, Dr. Winfried explained, these communications have to stop when it becomes “chest-beating”. It has to be done skilfully. Clients want to hear you’re taking your role in society seriously but he drew the line at brands sending out inspirational messages like ‘together we’ll come out stronger’ because it’s not helpful. If people need that, they can speak to friends or colleagues who they know, value and appreciate.
Essential skill sets marketers need
Dr. Winfried detailed two key skills marketers need at this time:
- The ability to let go of projects that they hold close to their heart. If they’re no longer relevant, we must be willing to be nimble and flexible in responding to a change in topics and priorities rapidly.
- Empathy. It can be easy to craft messages but we need to think hard how they are going to resonate with audiences in this particular situation which is characterised by uncertainty, fear, anger and frustration. “How are you going to craft messaging for a brand that will resonate and will demonstrate to the audience that this brand truly understands the situation if you don’t have empathy?”
This was added to by Alison sharing how she’s seen younger people coming through the organisation are displaying a different approach to work which is much more collaborative in style. It’s crucial going forward to match those technical skill sets people have,, with the softer skill sets such as EQ, empathy and collaboration — the things they don’t teach you in marketing degrees.
On that note, we’ll leave you with this quote from one of our panellists:
“This is the moment to marry heart and science in marketing: storytelling and data, empathy and strategy.”
‘A Conversation with The Economist Group’ is a virtual event series bringing the in-depth analysis that The Economist is known for to life, combined with viewpoints from world-class experts across industries.
Join us for our next webinar, ‘How can you predict the future in uncertain times?’ on Wednesday 27 May at 10am ET / 3pm UK when our illustrious speakers will be:
- Tom Standage, Deputy editor, The Economist and editorial director, The World Ahead
- Anne McElvoy, Senior editor and head of Economist Radio.
Register here to secure your attendance
