UK Research: Internet and direct mail remain key to financial services
UK Research: Internet and direct mail remain key to financial services
Internet and direct mail are the most popular source of information to UK consumers to find out about financial products. Over 50% claim to use the internet while a quarter say that they respond to personally addressed direct mail
Mortgages are the only financial product where an IFA is the dominant source of information. The top reason for purchasing a product directly, as opposed to using an IFA or buying through a bank or building society, was due to price – a perception that it was cheaper to go direct – across a number of products.
The findings are all part of a new research project undertaken by the DMA UK Financial Services Council in conjunction with NMG, to gain an in-depth understanding of the role of associated offers in the financial services sector.
The research also demonstrated that unsurprisingly price and the way information was made available prior to the application were key purchase decision influencers when buying life protection and income protection insurance whereas the brand of the provider is a significant influencer when buying private health insurance and personal accident insurance.
The tendency to switch products is very low with the majority of respondents not having taken out or switched providers for any financial products in the last 12 months. Of those that had switched, the most common product to be changed is motor insurance followed by home contents. With the exception of mortgages, the majority tend to purchase or switch providers by telephone or by applying online or in the case of home contents, direct mail appears to be very effective. However, nearly three quarters of respondents claim that they were not considering taking out or switching providers for any financial services in the next 12 months.
According to the research, respondents held an average of three financial products, with motor insurance being the most widely held (61%), followed by home contents (43%) and building insurance (36%), life protection insurance (34%) and a mortgage (32%).
The main reasons stated for purchasing life protection, income protection, private health insurance and personal accident insurance are house purchases or increased awareness of the need due to bereavement or illness.
Eric Austin, chair of the DMA Financial Services Council, comments: “It is encouraging to see that integrated marketing is prevalent – usage of the internet as a tool for both researching and buying products is predictably high but so are telephone and mail. While there is little evidence of email being used to purchase products, I am confident that this area will grow rapidly. Irrespective of which medium is preferred, it is important to remember that consumers have a choice in how they buy and how they are communicated with. On the down side, it is a concern that ‘price’ is a key trigger in the purchase pattern. Although understandable, it is clearly important that consumers are also aware of their cover included and any exclusions. Overall, this research provides great insight into consumer behaviour and I suspect that targeting and relevance of offer will continue to be key drivers.” (Source: the DMA UK)
