In the days of COVID-19, branding could be the thing that helps FinTech companies survive.
The world could be entering a potential financial market meltdown. As insurance companies, incumbents and InsurTechs, look to survive, branding could be key to survival and social media might be the holy grail.
COVID-19 (coronavirus) has shocked the world and governments are racing to implement measures to curb the spread and its impact. The stability of the financial market has been a top priority aside from ensuring people’s safety and access to healthcare. The European Securities Market Authority (ESMA) has made a number of moves to curb the impact on the financial market including a temporary requirement on net short positions in traded shares.
The UK government announced this week that it has prepared a £330bn package to support businesses and workers during the course of the pandemic. The government has said that the size of the package could increase if demand calls for it. Other countries are implementing similar measures – France and Germany both have packages of over €500bn ready, the US is looking to approve a $860bn safety net and Japan is preparing a $193bn parcel.
Governments understand the severity of the situation, but just because there are measures being put in place it does not mean all businesses will be fine. Even if they make it out of the coronavirus pandemic, they could fail in the following months due to not being able to get back on track or secure enough business. So what can an InsurTech do to ensure they survive? The answer is branding through social media, according to Robin Kiera, founder of the consulting and marketing company Digital Scouting.
He argues that it is not just the coronavirus which could be damaging the business world, but other issues are at play like low interest rates. “We are not in a buying market anymore,” Kiera told FinTech Global. “I think this will be a global company meltdown.” He went on to explain that InsurTechs which have already secured funding for the next two years will probably be fine, but those which have not may struggle. Incumbents, on the other hand, will be looking to restructure and make cost reductions, all of which will result in “a lot of slowdown down of innovation.”
With the market in turbulent times, companies need to work out what the best ways to stay relevant are. “Now is a magic moment where you should invest a lot of your results in branding,” he added. “If you’re a beloved brand, either an incumbent or as an InsurTech, you have a chance, but if your brand is vanilla, and everybody likes it but nobody knows it, then you have a problem.”
There is no official guidebook to how to leverage social media effectively, but the more you post, the more likely people will come across your content. This is something many insurance businesses, both new and traditional ones, fail to see.Lots of them only post sporadically on social media. This strategy achieves nothing and makes their presence on social media pretty redundant.
Kiera explained how he has seen numerous InsurTechs which have a great product and idea, but have no online presence, which means no one knows about them and so they fail. They may post a press release once every six months or push out a tweet every blue moon, but this is just lost in the wave of other companies putting out their content.
As a rule of thumb, the more you put out, the more chance a customer sees it. “You need to share your story,” Kiera said. “You need to build up a following and provide a lot of value to them.” Those which have done this will be in a better position for survival.
One of the key problems both InsurTechs and incumbents have in their strategies is that they are going for the wrong kind of branding, Kieras argued.
He went on to state that now is the time to be efficient with branding. Companies need to look at what they are doing and see where the true value is going.
Are television adverts still giving them enough exposure, are paper ads still relevant, and so on.
“I know InsurTechs which are sponsoring soccer clubs,” he said. “I’m sorry, that’s a waste of money. Yet they don’t do any, reliable online marketing.” This problem is largely accentuated by the fact a lot of decision makers in a lot of companies do not understand the significant impact social media can have. Kiera even stated this is the biggest pitfall they fall into. They are not posting enough content on different channels to get their name out there and they risk being edged out of the market by a similar company that does leverage online marketing efficiently.
Going back a decade and social media was largely considered a thing for teenagers. The likes of Bebo and Myspace was just a way of socialising with friends while you were at your homes. But nowadays, social media has a place for everyone and can do wonders for marketing efforts. While LinkedIn is the obvious shout for businesses wanting to access social media, it is not the only one. Twitter, YouTube, Facebook and even TikTok are great ways to engage with the community and boost brand awareness.
The ways to do business has changed and social media branding is one of the hot topics at the moment. “You would not be surprised how many decision makers from the insurance and finance world watch my WhatsApp status and it is not because I’m a model, I know that for sure, but it’s shows an underling trend that decision makers in a very conservative field have changed the communication behaviour.” Despite this, players in a lot of markets are still not up-to-date and are still seeing the world as if it was ten or twenty years ago, leaving an opening for startups which are more social media savvy. “As an InsurTech you want to be innovative and top notch in your core products, then be it also in your marketing,” he added.
If an InsurTech wants to be successful online, they need to identify who their target group is that will buy the product and then where they spend most of their time. Whether that is Twitter, TikTok, LinkedIn or Instagram. After that they need to hit them with regular, original content. “I don’t say a company should publish a selfie every second,” but they should be releasing something daily or at least weekly. The goal is to be “constantly on their mind so that the moment of need, that they call calling you this idea.” If a business only posts one blog post a month, no one is going to read it and most people will forget about and never return to the blog.
“We have a situation in which people that talked about buying something have stopped buying. Only the people that really want something are continuing to buy. The problem is, you might miss these people because they are not in your customer list. Maybe you miss this people because you’re not on their mind. So you need to be on the mind of the whole market to get the few customers that are still wants to buy.”
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