Every now and then an opportunity comes to change that, and some early adopter reap extraordinary rewards by adopting models that are already widely used elsewhere but not yet present in our industry. Online distribution was such an opportunity, and companies that adopted it first like the UK’s Swiftcover exploded into a significant market share in record time. Another such opportunity is upon us, who will be the next big beneficiary this time around?

Facebook has been around for quite a few years now. Its popularity grew quickly and the value it adds to its member did as well, following a well known network value effect that states that the value of the network doubles each time a new node is added to it. Each time a new member joins Facebook its value to its users doubles! With more than 500 million actives users, that value has finally reached a tipping point where Marketers have started to pay attention to the strengths of Facebook and invent ways in which to extract some of that enormous value as brand interactions, engagement and sales.

Facebook is at that magic moment in which the value is there and the marketplace hasn’t yet become crowded. Going back to the example of online distribution, once Swiftcover had its big success everyone else jumped in the bandwagon. But it was too late – online had become an expectation, a hygiene factor, no more a differentiator. Nobody else would be able to make a business success on that theme alone. Time only moves forward.

So it is now time to look seriously at Facebook’s strengths as a marketing platform, and that time is limited as the first Financial Services organization to be really successful on Facebook will also be the last one to do so. The race is on, so where do we start?

In typical Financial Services fashion we can rely on those that have gone before us to show us the way. Marketing success stories on Facebook are not as scarce as some may think. Facebook Marketing patterns are starting to emerge and criteria for success documented. We can take existing practices and apply them to our own products and services. We have the advantage of the late mover, but we can’t afford not to be early adopters in our own world.

We sell complex products that are difficult to understand or by time-poor, disengaged customers. Our customer service has retreated behind phone lines in faraway countries, making it very difficult for customers to relate and engage at the point of sale. Years of price-led advertising have turned our products into commodities in the mind of a consumer we’ve educated not to look beyond the price: points about technicalities over a creaky phone line are disregarded by prospects immersed in all that advertising noise.

Content Marketing gives us an opportunity to change all that. Blogs and guest Articles, eBooks, videos featuring our experts or customers, etc can all help us remind the public (and ourselves) that financial products can indeed be very different and that there can be a smarter choice than the cheaper choice.

Our organizations are full of experts that can talk all day about the elements of our customer proposition, the value of a certain additional service, the benefits of loyalty. Those messages are seldom heard beyond the walls of our offices, stifled by pressures we impose on ourselves: there’s no space for education on a 30-second TV ad.

eBooks are a great example of the opportunities open to us in the new world of Content Marketing. A good eBook is easy to produce and distribute. eBooks are full of information people are actually willing to pay for. It can provide much more engagement than any TV campaign will ever do, and can take on a life of its own through email and social networks as new brand advocates spread the word on our behalf. You can track who gets it, where does it go and how many people come to you after using it.

Content Marketing must become the next big line in your Marketing plan. It will require test and learn and if you’re serious about getting results you will need to resource appropriately, as the quality of your content is the key to its success. Done well, investing in it could be the best the decision you ever took. What are you waiting for?

My own view is: not much. Social Media sites are fantastic resources and having a presence in them is no longer optional for most businesses, regardless of their distribution model. But Social Media sites are primarily about engaging in dialogue with prospects and customers, about providing added value by being accessible and extracting value from allowing your customers to contribute to your products’ development. Social media sites are great at helping people decide whether they want to buy a product of a certain category (say a new camera), and whether they should consider any particular brand; as well as to get support from their contacts when their purchase goes wrong.

Search sites, on the other hand, are best are directing people to the best place to fulfill their concrete intention, as declared by themselves in the search bar. Once you know you want a new camera, Google takes over and shows you what cameras are out there, how much do they cost and where to buy them. As a source for new business Search will remain your most important source of business for years to come.

There is a final comment to be made about the measure used to somehow imply Social Media’s supremacy: visits. If a higher number of visits were a measure of value, we’d all be creating sites that were difficult to use or full of distractions. Visits are relevant for media sites, both social and of the traditional sort, as they provide engaging content for the user. Search and eCommerce on the other hand must provide efficient services that reach the visitor’s desired outcome every time. Google receiving more visits could be a sign of a great problem indeed, if those visits were a symptom of poor search results forcing the user to try again over time. The fact that Google gets it right most of the time, and customers reach your eCommerce site to buy your products is another sign of the healthy position of Search as a key channel for your acquisition efforts, one that you should keep investing in and developing your capability for.

It’s great to see Social Media visits go up. More and more people are finding more and more reasons to go online, and that will in the end benefit us all who run online businesses. But you would be ill-advised to blind yourself with these figures and do too much of your Marketing on Social Media sites. That’s not what they are for.

However, all is not well for eBusiness in financial services. Traditional companies with long established structures and operating models often struggle to adapt to a fundamentally new way of conducting their business. Management of Web presence is often bolted onto an existing structure and immediately outsourced to a mixture of external suppliers (IT development, Digital Agencies, Hosting). As a result, online presences struggle to become part of the company’s DNA through a stagnating combination of cost, rigidity and lack of differentiation. Opportunities are not taken advantage of, results fail to materialise and organizations slowly turn their focus away from what could be the best channel in their distribution mix.

Companies that understand that eBusiness is a core competency know that in order to succeed online you have to embrace the medium. Investing in in-house skills and capability is of paramount importance. Modern eBusiness is made of a very broad set of components: sales effectiveness, usability, accessibility, design and build, application development, testing, customer service, operations, IT… the list goes on. Each and every one of these capabilities requires resources and dedication and can rarely be taken outside of the core of any organisation without seriously impacting the totality of an eBusiness channel.

Financial services organisations that are serious about eBusiness need to evolve to afford their digital channels the same care and attention they dispense their traditional core capabilities: Underwriting, Product, Pricing, Finance, Operations, Sales, etc. Adapting an organisational model to embrace a whole new function is never an easy process for long established organisations. The risk and short term pain is well worth it: markets and people have already moved to the Internet and many traditional companies are being left behind. The price of not embracing digital channels seriously and decidedly is just too high.

Do you have any examples of financial institutions that have embraced eBusiness? Any experience where a digital channel has let you down? Please let me know in the comments!

Like every other industry, insurance has suffered through the recession. Price comparison sites, on the other side, kept growing as people sought ways to save money including changing insurance provider before their policies run out. However, it seems recession-proofing was quite short lived and now Confused, the leading price comparison site in the UK, has started to go backwards.

Part of this particular recession will be due to competitive pressure: CompareTheMarket keeps creaming the success of Aleksandr Orlov the Meerkat. But I believe deeper forces are at work here and the whole category of insurance price comparison may be about to enter a very difficult time indeed. A perfect storm of price efficiency, quality, consumer sophistication and external competition could hit them hard.

Partly due to the success of these price comparison sites, insurance prices in the UK have tended to equilibrate, removing one of the key reasons for consumers to use these sites: the ability to make real savings on their insurance. As aggregators created total price transparency, insurance providers were forced to compete for every customer, losing profitable pricing advantage but gaining insight on huge numbers of applications that better informed their prices, accelerating a tendency to perfect pricing for every case and removing the very price differences that aggregators used to exploit. Cheaper products still exist, but again consumer experience and a culture of online reviews have helped identify the reasons for that lower price as dangerous cutting of corners in many levels. While many drivers still see car insurance as little more than a tax on driving, nobody wants to pay for a service that won’t be delivered at a time of need. As prices from reputable suppliers evolve to better reflect customer needs, low quality cheaper brands are squeezed out, once again impacting the aggregator’s main consumer benefit.

Consumers are also getting more savvy. Aggregators’ initial claims of big savings benefitted from a culture of loyalty that insurers took advantage of to increase prices year after year in a dated business model that is now all but gone. The current trend for switching providers on a yearly basis again eliminates most of the potential savings as customers haven’t accumulated years of stealth premium hikes. In this scenario, the very high commission demanded by aggregators in the event of a sale mediated by them plays against them – in a world with little profit and very low loyalty it is too expensive to pay an intermediary for business so insurers have started to turn away from price comparison -some like Direct Line were never present- denying the price comparison sites their most necessary asset: prices and brands to show on their results pages. Finally, the current weakness may be seized by much more sophisticated external players with deeper pockets and lots more ability to innovate. I wouldn’t be surprised if Google, Bing and brands like that would launch their own insurance comparison very soon. They’ll be forced to if aggregators’ growth is halted. Aggregators spend millions of pounds in PPC advertising. If they lose the ability to generate revenue for the gatekeepers of the Internet they’ll be tossed to the side and replaced by better offers from the global powerhouses.

Simples.