With the vast amount of motor finance introducer-based, Motor Finance investigated what strategies companies employ to reach the consumer in a B2B and B2C world
While the idea that there is a typical motor finance deal is being increasingly challenged, it remains true that, even today, the vast majority of finance sold to UK consumers will have either a dealer, a broker, or both, between the lender and the end-consumer. Although the customer should have been made aware of who the finance is with, the customer will not necessarily have heard of the finance provider before being informed of them.
Nonetheless, anyone can easily use the internet to research companies and form opinions relatively quickly and easily. What’s more, the internet has allowed companies to increase the amount of contact they have with existing customers, in order to ensure there are no problems and increase retention rates. Therefore the argument could be made that, for lenders, keeping a positive public image is becoming increasingly important.
This is certainly true at Moneybarn, where marketing manager Stacey Ball says: "We operate in a market which has higher risks than the prime market and this applies to both lenders as well as customers. The nature of the market means that customers want to understand Moneybarn’s approach to lending before signing the agreement through a broker, so our communications play a vital role in providing this insight for customers. Our marketing and press communications play a key role in this."
As a result, the company’s marketing team spends around 70% of its time focused on customer projects, such as the evolution of its current-customer communications, and those which focus on the information delivered to customers via intermediary partners.
The ratio is similar at The Car Finance Company (TCFC), according to marketing executive Hayley O’Connor. She says the marketing team currently spends around 60% of its time dedicated to end-users, with the remainder related to dealer and broker marketing material.
A big part of this is speaking to customers throughout the duration of their contract. O’Connor says: "Because our customers are usually with us for around 36 months, depending on their finance agreement term, it means that regular communication is required in order to educate our customers on our processes and ensure customer satisfaction.
One method lenders can use to reach out to customers is social media, however O’Connor warns that companies need to avoid pure advertising as social consumers generally react poorly to this.
Ball adds there are other considerations which need to be considered when using social media. One is that anything published on the main platforms is accessible to all audiences, including potential customers, existing customer, and even regulators, and therefore needs to be considered from all angles before publishing.
She adds: "Social media is great for tracking advertising campaigns, but it become harder to measure success when the content does not have a strong call to action. As a responsible lender we believe that it’s important for Moneybarn to be a source of information about the motor finance industry and this often means that the content has no measure of impact beyond the number of views."
TCFC takes a similar stance on this, and O’Connor says: "We look to use social media for engagement rather than a sales channel. We promote ourselves as subject matter experts with the industry to build a relationship with a potential customer."
This educational element is something Graham Filmer, director of Rocket Marketing Associates, recognises as being important in crafting a company’s image.
He says: "A promotional approach that focuses upon a sales force, a website and advertising, may mean that dealer audiences know a business; but a well-executed PR strategy can create additional credibility gained from considered insight, news and views. Over time, this can help develop a highly desired ‘thought leadership’ position for a company, which in turn can help to build respect and trust, again differentiating a business."
Building up to the position of a thought leader takes time, and Filmer says one of the mistakes companies make is to appear to view PR and marketing as little more than putting out the occasional press release, as a press release in isolation is unlikely to create long-term traction.
"The copy to support a thought leadership stance needs to be relevant, appropriate, distinctive (or you risk being a follower) and substantiated. Importantly, the copy and the message have to be ‘real’. Journalists will not publish what is simply a veiled advert. Nor should organisations make excessive or unsupportable claims. This presents the risk of breaking the very trust that PR is aiming to achieve. Good PR should always support the brand and ensure that copy is real and not hyperbole," he adds.
As an external PR, one of the challenges Filmer has encountered in this regard is that ‘thought leadership’ content needs to be aimed at the business’ ideal customer, addressing their needs, instead of pitching a product or service. However, Filmer says: "This can often be a challenge, quite simply because organisations are quite naturally so focused upon their business and its customers that they may not immediately have distinctive views about wider trading environment issues, or perhaps are unsure of how to articulate them."
In terms of how to engage with consumers, Ball warns that tone is important, and that using a tone which is too formal or language that has too much jargon results in poor engagement.
As motor finance can be seen as daunting to consumers, which in the case of Moneybarn are customers who are often focused on improving their credit score, she recommends: "Talking to them in a way that is conversational and accessible removes some of these barriers and helps us get across important and useful information. It’s important for the whole Moneybarn team to be approachable so that our customers are encouraged to talk to us.
One way of achieving this O’Connor recommends is through the use of video. This works in both B2B and B2C environments, she adds. She also suggests infographics as a digestible way to communicate with audiences. "A lot of the information regarding our finance products is very comprehensive and we want to ensure that this information is easy to read and clear so we utilise infographics where possible within our marketing," she says.
According to Nigel Unwin, head of marketing at BMW Group Financial Services (BMW FS), both B2B and B2C marketing is important for finance houses. However he adds: "The marketing for Alphera, our independent finance brand, is much more focused towards traditional B2B. This involves providing our dealer partners and brokers with the tools, service levels and campaigns they need from us to sell our finance products."
This is a key difference he finds between promoting a captive and an independent finance company. Another, he adds, is that captives will have a better brand awareness generally, and therefore marketing can focus on the USP of the brand. With independents, marketing will vary depending on the business strategy, but he says Alphera’s marketing focuses on communicating with its partners and being a trusted resource. Therefore, he says, sales of its products are presented in the best possible manner where it is the most suitable option for the consumer.
While Alphera is currently focused on B2B, Unwin admits that B2C will become more important. He says: "As the consumer purchasing journey is evolving, particularly with the advent of technology, peer-to-peer lending and comparison sites, there will be a requirement for independent lenders to have a greater consumer presence. This will ensure they stay visible and competitive, as consumers potentially decide on finance before they enter a retailer."
Filmer agrees that traditional B2B services are increasingly in the B2C domain thanks to digitalisation. Explaining this, he says: "It may still be reasonable to reflect that car finance customers may not be aware of their finance supplier until they sign their agreement. However, through digitalisation not only are financial services providers more public and accessible, something that ‘self-serve websites’ will only increase, but today consumers can and are sharing their experiences and views, notably through reviews."
While social media platforms such as Twitter and Facebook may be the most obvious example of this, Filmer also notes that some businesses may be unaware their services are being rated on review sites and potentially forums. As a result, he suggests businesses should now be looking to manage their online reputation. For lenders this could have the added benefit in today’s environment, where being seen to treat customers fairly is paramount. Filmer says: "In today’s TCF operating environment it’s certainly conceivable that dealers will want to say ‘I work with a lender with a really high trust pilot score.’ If the customer can go online and see 1,000 reviews of which the majority are good, that’s credible information."
Monitoring negative feedback is important for companies, however it’s clear there’s no one-size-fits-all approach to responding to negative feedback. At Moneybarn, Ball notes: "When a customer expresses dissatisfaction via an open platform it’s usually because the situation is causing them particular concern and usually has a strong emotional element to it. With this in mind, any response should avoid being defensive. Instead, it should acknowledge the issue, making sure the customer understands how seriously we take it, and offer them a clear path to resolve the problem."
However in open forums, where there can be multiple consumer opinions, a direct response might not always be appropriate. Instead Moneybarn monitors these forums and feedback sites, and contacts customers directly if they can be identified. "Replying to a customer via social media or a review site provides a great forum for opening up communication channels with customers and provides a more controlled environment, allowing constructive dialogue," she adds.
At BMW FS, Unwin says the company will engage with customers directly via its website, social media account, telephone or through its retailer partners. While he says the company takes all complaints seriously, he adds: "It’s our policy not to engage with indirect comments made online, but we do keep a watching brief on online discussions."
While a lot of media attention is focused on trade press, social media and direct contact with consumers, Filmer recommends lenders also look at the consumer press when considering strategies. The audience in this field is wider and more diverse, and there is also a wider array of publications. Filmer says that success in this market is often a longer game, and may require some lobbying to educate publications which will have a more limited knowledge and appreciation of product features and the benefits of dealer-based finance.
In his experience, the ‘key criteria’ with B2C media is to focus less on what an organisation does and more on what that means for the consumer.
He adds: "One storyline option might be to say ‘we’ve got the cheapest or best PCP in the marketplace’, but arguably it would be so much better explaining through a publication like Which? or WhatCar? why dealer finance is different to a personal loan, and why dealer finance gives better consumer protection and improves affordability when compared to an unsecured personal loan. There is a lobbying job to be done to promote dealer F&I."
Last year BMW and Alphera changed its business model. According to Unwin, this included a direct communication campaign with retailers and partners, including newsletters, roadshows, webinars and a microsite. While the focus was on B2B, Unwin notes: "We also ran a consumer campaign to raise the profile of financial services for the brand. This involved a research project and PR campaign to consumer media titles which proved successful."
As consumers and businesses become increasingly diverse, it makes sense that the routes to communicating the message to them follows suit. It’s clear there’s no one ‘right’ way to go about communicating a brands message that will work for each company. Instead, people Motor Finance spoke to promote a range of campaigns and methods to reach partners and end-customers, including B2B media, B2C media, the use of social media and direct PR and marketing campaigns.<